Things are starting to heat up in the VR space following GDC (graphics developer conference). The companies that offer the most exposure are Sony, Facebook and HTC. The PlayStation VR offers the cheapest entry level experience and has enough developer support to drive meaningful gaming experiences over the short-term. The PS4 costs $300 depending on promotional activity, and the VR headset will cost $400. Therefore, when combined the two cost $700 for a decent enough VR experience. However, I find that the Oculus Rift has the most superior positioning as many game developers were demoing various game titles at GDC on VR technologies for the PC space. Of course, there’s no denying that the pricing of a gaming PC and Oculus Rift headset when combined (roughly $1,500 to $1,600) creates barriers to adoption. However, GPU growth in the PC market especially among high-end SKUs also indicates that the addressable market among PC enthusiasts could be roughly comparable to PS4. Source: Deutsche Bank The most recent estimate from Deutsche Bank implies 4.5 million total shipments. I think these figures are somewhat conservative given the initial demand among pre-orders. However, there are constraints on the supply side, which implies that shipments could be limited due to the limited supply of components as opposed to a lack of adoption among early adopters. Investors gain the most exposure to this via Sony, as an incremental 2 million units could be a needle mover. However, Facebook is also decently positioned with its Oculus VR headset, as $600 million in incremental revenue at 1 million shipments could drive revenue beats, as analysts anticipate FB to report $25.5 billion in revenue. An incremental $600 million is enough to swing the figure by 2.3%. Since Facebook has the best fundamentals among the VR peer group, investors should buy Facebook as opposed to Sony or HTC.