Sony Group Corp. has sharply lowered expectations for the initial release of its PlayStation VR2 headset after disappointing initial pre-orders, signaling little progress for the hyped-but-unproven virtual reality sector.

The company has cut its forecast for shipments of the PSVR2, due for release on February 22, in half to around one million units this quarter, people familiar with its discussions said. Sony used to be aimed to have 2 million headsets are ready for the launch quarter and leverage second-generation headsets to drive user growth and adoption for VR.

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