Sony and Samsung Lead the Nascent Virtual Reality Market – Fortune

Team USA athlete Laura Zeng attends Samsungs Virtual Reality Experience Powered by Gear VR during the 2016 Road to Rio Tour in Times Square on April 27, 2016 in New York City. Neilson Barnard Getty Images for Samsung

Virtual reality's hype hasn't become reality yet.

But the nascent market for VR headsets is showing some signs of life, at least for the relatively inexpensive versions.

Samsungs Gear VR headset, one of the cheaper VR headsets, is the most popular, according to an International Data Corporation report published on Thursday. Samsung shipped 490,000 of those headsets in the first quarter, giving the company a 21.5% market share.

This is the first time that IDC is releasing data about VR headset shipments, so it did not provide detailed information about first quarter shipments compared to previous quarters. But it did give a vague idea about whether Samsung's VR business is growing.

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In fact, Samsung saw an annual decline in shipments, according to IDC. But IDC believes the decline is merely a temporary consequence of Samsungs recent debacle involving the recall of its much-anticipated Note 7 smartphone due to exploding batteries.

With the updated Samsung Galaxy S8 smartphones approaching release, IDC believes that Gear VR headset shipments will likely pick up steam. A Samsung marketing gimmick that gave customers who pre-ordered Galaxy S8 phones a free Gear VR headset almost guarantees some increase in shipments. That deal has since expired.

Sony is the second on IDC's list with 429,000 PlayStation VR headsets shipped in the first quarter. The PlayStation VR requires a PlayStation 4 or PlayStation 4 Pro video game console to operate. Although the PlayStation VR is not as powerful as competing headsets like the HTC Vive or Facebooks Oculus Rift, the fact that millions of people already own a compatible Sony gaming console is one reason IDC believes Sony will likely remain a leader in the near term.

Additionally, several big video game publishers like Capcom said they would make some of their big-name titles compatible with the PlayStation VR. For example, Capcom's latest Resident Evil horror game, which debuted in January, works with the PlayStation VR. IDC believes that Sony will benefit from the availability of blockbuster games.

HTC is the third biggest VR headset supplier with 191,000 of its Vive headsets shipped in the first quarter. Although the Vive is the most expensive VR headset on the market at $800, IDC said that the Taiwanese smartphone maker enjoyed success in the commercial space as VR cafes have been popping up around the world, particularly in Asia. Imax ( imax ) , for example, is using the HTC Vive in its handful of VR arcades that it is opening this year.

Facebooks ( fb ) Oculus Rift headset and the Alcatel VR headset are in bottom 5 of IDCs headset tracker report. IDC said that Oculus shipped 100,000 Rifts while Alcatel shipped 91,000 in the first quarter.

The Oculus Rift had a rocky debut last spring as it dealt with shipping delays , legal battles , and management problems involving the Rifts controversial co-founder Palmer Luckey , who has since left Facebook.

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However, Facebook ( fb ) recently dropped the price of the Oculus Rift to presumably get more customers and has released new accessories like motion controllers, which IDC said would help the company provide a compelling alternative for VR enthusiasts.

IDC did not include shipments of Google's ( goog ) Daydream View headset, which must be tethered to a compatible smartphone to operate, in its research.

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Sony and Samsung Lead the Nascent Virtual Reality Market - Fortune