As per MRFR analysis, the AR VR software market size was estimated at 23.43 (USD Billion) in 2022. The AR VR software market industry is expected to grow from 30.42 (USD Billion) in 2023 to 319.2 (USD Billion) by 2032. The AR VR software market CAGR (growth rate) is expected to be around 29.85% during the forecast period (2024-2032).
The augmented reality (AR) and virtual reality (VR) software market is driven by advancements in computer vision, real-time rendering, and haptic feedback technologies. Key market drivers include increasing demand for immersive experiences in gaming, entertainment, and e-commerce, as well as growing adoption of AR/VR in healthcare, education, and manufacturing.
Opportunities for market growth lie in the development of cross-platform AR/VR software, cloud-based rendering solutions, and the integration of artificial intelligence (AI) and machine learning (ML) for enhanced user experiences. Recent trends in the market include the rise of mixed reality (MR), which combines AR and VR for seamless interactions between the real and virtual worlds.
Additionally, the development of haptic gloves and suits is enhancing the realism of VR experiences, while the integration of eye-tracking technology is improving user interfaces. The growing popularity of mobile AR/VR devices and the expansion of VR arcades is also expected to drive market growth in the coming years.
Figure1: AR VR Software Market, 2018 - 2032 (USD Billion)
Source: Primary Research, Secondary Research, MRFR Database and Analyst Review
The AR VR Software market is being driven by the advancing technologies in hardware Industry. Several AR/VR devices like smartphones, tablets, and head-mounted displays are becoming increasingly popular, as the major market for AR/VR software. The processing abilities, graphics, and display of devices have increased substantially which also makes these devices more compatible to use for AR/VR software.
Moreover, various devices integrated with sensors and cameras to improve the quality of AR/VR experience, which in return generates higher usage of AR/VR software. In conclusion, as the techonogly gets more advanced and the hardware Industry grows, it contributes to the development of the market.
The increasing need for immersive experiences is another force that drives the AR VR Software Market. AR/VR software provides users with experiences that no traditional media or application can provide. It is possible for AR/VR applications to interact with the virtual environment, explore immersion content, and experiment with simulation that was not possible before.
Thus, immersion applications are mainly used in the entertainment, game, education, and training industries. As AR/VR software is required for increasing the immersive experience, therefore its market will grow.
The development of the AR VR software market has greatly benefited from government initiatives and the funding in the market. Authorities around the world acknowledge the potential that AR/VR technology holds, and as a result they have channeled resources towards research and development to further this technology.
Government agencies and other organizations have injected funds to help in-depth development of AR/VR software solutions and applications. Government-led programs to deploy this technology in various sections of the economy have also contributed to this market’s growth.
The device type segment of the AR VR software market is divided into head-mounted displays, handheld devices, and projection systems.
Head-Mounted Displays: HMDs are wearable and offer visual experiences of AR and VR. They are preferred over other devices as they offer better visuals. As a head-wearable device, it is portable compared to other projected devices or hand-held devices like tablets or smartphones. HMD is expected to see growth in the future owing to its high demand in gaming, entertainment, and enterprise applications. The HMD segment accounted for around 60% of the market revenue in 2023.
Handheld Devices: Handheld devices like smartphones and tablets will offer AR applications in the coming years. The same will be enjoyed by customers in the consumer and retail sectors, leading to high growth in future years.
Projection Systems: The technology is used to project the AR content through a projector to a surface or big screen to offer VR experiences. This technology is considered to have a less share compared to other devices and will be adopted only in limited AR applications in future years. The same will be suggested for big AR applications like in museums and exhibitions.
Overall, the device type segment is expected to see significant growth in future years with the growth of AR and VR technologies. The increasing demand for immersive experiences along with the development of software and supporting devices will see high growth in the coming years.
Figure2: AR VR Software Market, By Device Type, 2023 & 2032 (USD billion)
Source: Primary Research, Secondary Research, MRFR Database and Analyst Review
The market is divided by application into gaming, entertainment, education, healthcare, and retail. Gaming is expected to be the leading application, and US$ 3,757 million, or 45.2%, of the market will be taken up by this application. The segment is already dominant today due to the popularity of AR and VR games. However, it is likely to grow further in the future and remain the largest application thanks to the increasing number of gaming consoles and VR headsets released.
The entertainment industry is expected to have the highest CAGR in the period under consideration. The application will benefit from rising use of AR and VR technologies in movies, TV shows, and streaming.
Education is likely to leverage AR VR software significantly over the assessed period. This market is expected to benefit from the increasing use of AR and VR in schools and other educational institutions to create immersive learning experiences.
The healthcare segment is expected to grow at a moderate pace. The sector will benefit from the increasing use of AR and VR technologies for creating new medical applications and their potential to be used in treatment.
The retail segment is seen as the slowest growing in the period. The use of AR and VR in offline and online stores is seen as a potential growth area primarily in creating personalized and interactive buying experience.
The AR VR software market is segmented by technology into virtual reality, augmented reality, and mixed reality. Virtual reality (VR) held the largest market share in 2023 and is projected to maintain its dominance throughout the forecast period. This is due to the increasing adoption of VR technology in gaming, entertainment, and other industries.
Augmented reality (AR) is expected to witness the highest growth rate during the forecast period, owing to its increasing use in retail, healthcare, and manufacturing. The growth of the market is attributed to the increasing adoption of AR and VR technology in various industries, such as gaming, entertainment, retail, healthcare, and manufacturing.
The AR VR software market is segmented into North America, Europe, APAC, South America, and MEA. Among these regions, North America is expected to hold the largest market share in 2023, owing to the presence of major technology companies and early adoption of AR VR technologies.
Europe is expected to follow North America in terms of market share, due to the growing demand for AR VR solutions in various industries. APAC is expected to witness the highest CAGR during the forecast period, driven by the increasing adoption of AR VR technologies in emerging economies such as China and India.
South America and MEA are expected to have a relatively smaller market share but are expected to grow at a steady pace. Overall, the AR VR Software Market is expected to grow significantly over the next few years, driven by the increasing adoption of AR VR technologies across various industries.
Figure3: AR VR Software Market, By Regional, 2023 & 2032 (USD billion)
Source: Primary Research, Secondary Research, MRFR Database and Analyst Review
Major players in the AR VR software market are constantly striving to gain a competitive edge by investing heavily in research and development to create innovative products and solutions. Leading AR VR Software Market players are focused on expanding their presence through strategic partnerships, acquisitions, and collaborations. The AR VR Software Market is characterized by intense competition, with numerous established players and emerging startups vying for market share.
A leading player in the AR VR software market is Google, which offers a comprehensive suite of AR and VR software solutions, including its popular ARCore and VR180 platforms. Google's strong ecosystem of developers and partners, as well as its focus on user experience, has helped it maintain a dominant position in the market. Additionally, the company's strategic investments in cloud computing and machine learning technologies have enabled it to develop advanced AR and VR solutions that cater to a wide range of industries.
Another important player is Meta Platforms Inc. (formerly Facebook), which has made significant investments in AR and VR technologies. Meta Platforms' Oculus VR headsets are among the most populAR VR devices on the market, and the company's social media platforms provide a large user base for its AR and VR experiences. Meta Platforms is also actively developing new AR and VR software solutions, such as its Project Cambria headset, which is expected to offer advanced mixed reality capabilities.
Sony Corporation
Intel Corporation
Meta Platforms
AxonVR
PTC
Autodesk, Inc.
Varjo Technologies
Adobe Inc
Unity Technologies
SenseTime
Google Dubli
Apple Inc
National Instruments
The AR VR software market is projected to grow from USD 30.42 billion in 2023 to USD 319.2 billion by 2032, at a CAGR of 29.85%. Key factors driving this growth include increasing adoption of AR and VR technologies in various industries such as gaming, healthcare, and retail. Additionally, advancements in hardware and software capabilities are making AR and VR experiences more immersive and engaging.Recent news developments in the market include the launch of new AR and VR headsets by major players such as Meta and HTC. Additionally, several companies are investing in the development of AR and VR software platforms and applications.
For instance, in 2023, Microsoft announced the launch of a new Mixed Reality Toolkit for developers to create cross-platform AR and VR experiences. These developments are expected to further fuel the growth of the AR VR software market in the coming years.
| Report Attribute/Metric | Details |
| Market Size 2022 | 23.43 (USD Billion) |
| Market Size 2023 | 30.42 (USD Billion) |
| Market Size 2032 | 319.2 (USD Billion) |
| Compound Annual Growth Rate (CAGR) | 29.85% (2024-2032) |
| Report Coverage | Revenue Forecast, Competitive Landscape, Growth Factors, and Trends |
| Base Year | 2023 |
| Market Forecast Period | 2024-2032 |
| Historical Data | 2019-2023 |
| Market Forecast Units | USD Billion |
| Key Companies Profiled | Sony Corporation, Microsoft, Qualcomm Technologies, Intel Corporation, Meta Platforms, AxonVR, PTC, Autodesk, Inc., Varjo Technologies, Adobe Inc, Unity Technologies, SenseTime, Google Dubli, Apple Inc, National Instruments |
| Segments Covered | Device Type, Application, Technology, Region |
| Key Market Opportunities | Immersive Healthcare Training Enhanced Remote Collaboration Virtual Tourism Experiences Digital Marketing Innovations Smart City Development |
| Key Market Dynamics | Rising Demand for Immersive Experiences Technological Advancements Growing Adoption in Healthcare and Education Increasing Investment in AR VR Content Development and Strategic Partnerships and Collaborations |
| Countries Covered | North America, Europe, APAC, South America, MEA |
Frequently Asked Questions (FAQ) :
The AR VR software market was valued at USD 30.42 billion in 2023 and is projected to reach USD 319.2 Billion by 2032, exhibiting a CAGR of 29.85%.
North America is expected to account for the largest market share in the AR VR software market during the forecast period.
Rising adoption of AR VR technology in various industries, increasing demand for immersive experiences, and advancements in computer vision and AI are key growth drivers for the market.
Major applications include gaming, healthcare, education and training, retail and e-commerce, and manufacturing.
Key competitors include Google, Meta, Microsoft, Apple, and HTC.
The AR VR software market is projected to reach USD 73.2 billion by 2025.
The Asia Pacific is expected to reach USD 125.6 billion in the AR VR software market by 2032.
The Middle East and Africa region is expected to exhibit a CAGR of 32.5% in the AR VR software market.
Challenges include high hardware costs, privacy concerns, and lack of standardization.
AR VR software has revolutionized the entertainment industry by providing immersive gaming experiences and interactive entertainment options.
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Team Lead - Research she holds an experience of about 6+ years in market research and business consulting, working under the spectrum of information communication technology, telecommunications and semiconductor domains. aarti conceptualizes and implements a scalable business strategy and provides strategic leadership to the clients. her expertise lies in market estimation, competitive intelligence, pipeline analysis, customer assessment, etc.
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