Demand for extended reality VR and AR devices is weakening, admits a new report from CCS Insight.

The analyst has previously been pretty bullish about the so-called XR market. Last year, it predicted worldwide unit sales of headsets would reach 71 million by 2025.

Now, it is revising down its forecasts. In a new report it says sales were just short of 10 million in 2022 and will reach 11.4 million in 2023. It adds that sales will hit 67 million units in 2026.

The company says macroeconomic weakness and inflation is hindering all consumer device markets. But it also cites specific issues with the XR sector. CCS says the $100 retail price increase of the most popular VR headset, the Meta Quest 2, is weakening sales. It claims this is above the sweet spot at which tech enthusiasts will consider buying one.

Another obstacle is the continuing absence of attractive and lightweight AR smart glasses. The report says: “Weve been expecting smart glasses to come to market for a while now, but the techs proving tricky to master…large technology players are being cautious.”

On a more positive note, CCS Insight expects the 2023 arrival of the new Sony PlayStation VR2 headset to spur some consumer demand.