The study, by telecoms research firm Telsyte, has also found that sales of virtual reality headsets are off to a strong start in Australia, with more than 200,000 sold in 2016; mobile VR has about 70% share of the units sold.

And, according to Telsyte, nearly half of all device revenues were generated by the Sony PlayStation VR, which the firm says is experiencing strong initial demand from video gamers.

The survey of Australian consumers (16+ years of age) shows almost half of those looking to purchase a VR headset are interested in using it for games, movies or entertainment purposes, and nearly half of all Australian households currently have a game console “making it fertile ground for early adopters”.

The firm says, however, that many production houses are waiting for broader adoption and a clear winner to emerge before making large-scale investments.

“We are entering a chicken and egg scenario with VR adoption,” Telsyte managing director Foad Fadaghi says.

“Developers are looking for a growing base of users before making large investments, at the same time mainstream technology buyers are waiting for killer VR content or applications.”

According to Telsyte, the wide range of VR products available is also having an impact on consumer and developer uptake.

Telsyte says it believes that the choice of three main platforms (mobile, console, PC) and four main ecosystems (Oculus, PlayStation VR, HTC Vive/Stream VR, Google Daydream) is impacting consumer purchase decisions.

“This will be further exasperated with more options in H2 2017,” Telsyte notes.

Telsyte research also shows early adopters are looking for a “distraction from reality”, although VR is typically used in small doses.

The research firm says that nearly half indicated “they enjoy playing online games with friends”, 58% indicated “they often feel stressed” and 49% indicated they have “very little free time” (24%, 18% and 11% higher than the average Australian responses respectively).

Telsyte says its assessment of VR hardware and software shows most early devices on the market need advancement to help the overall market grow.

“Notwithstanding the health and safety concerns, VR hardware needs to become less visible, lighter and untethered, while software and content developers need to harness the technology better with less 'demo' oriented releases,” Fadaghi concludes.