Augmented Reality Virtual Reality Market Analysis

Augmented Reality and Virtual Reality Market Research 

The augmented reality and virtual reality market size is projected to reach approximately USD 369.765 Billion by 2032, at a CAGR of 30.9% from 2024 to 2032. The augmented reality and virtual reality market (AR/VR market) significantly widen the range of everyday tasks connected devices can assist with, including information search, shopping, and other activities. In contrast, virtual reality enables users to travel the world from the ease of their homes. Virtual reality gaming creates a 3D environment for its consumers, allowing them to feel the physical presence of a game. Virtual reality (VR) technology creates experiences that are nearly real and/or believable in an artificial or virtual environment, whereas augmented reality (AR) augments the real world by overlaying computer-generated information on top of it.

Figure 1: Augmented Reality and Virtual Reality Market Size, 2023-2032 (USD Billion)

Source: Secondary Research, Primary Research, MRFR Database and Analyst Review

COVID-19 Impact Analysis

COVID-19 has accelerated digitization and given technology adoption a much-needed boost. These technologies have applications in various industries, including healthcare, education, tourism, and retail. The pandemic's behavioral changes will last longer, if not forever, even after the lockdown restrictions are lifted. People will remain socially distant while being virtually close thanks to augmented reality, virtual reality, and extended reality market technologies. If AR/VR platforms are available, businesses can run and grow despite the challenges posed by social distancing. Furthermore, as internet connectivity improves, more people can work from remote locations and smartphones, making it possible for the masses to work online.

Augmented Reality and Virtual Reality Market Dynamics

Virtual reality is widely used for a variety of other applications aside from education and training. For example, in the automobile industry, technology allows the engineers to experiment with a vehicle's design and construction at the perception stage before embarking on costly prototypes. VR exposure therapy is also used to treat people suffering from mental illnesses. Furthermore, tourism businesses use virtual reality technology to allow potential clients or customers to take virtual tours of monuments, iconic destinations, restaurants, and hotels. Another factor likely to drive market growth is the surging use of VR applications in the architecture and planning sectors. The use of virtual reality technology in architecture helps with decision-making and visualizing the effects of proposed urban designs and architectural plans. It also allows for the early detection and correction of flaws, saving time and money. Furthermore, several real-estate firms have begun to use virtual reality to provide virtual tours of properties, increasing the chances of a sale.

For example, in February 2021, Zillow, an online real-estate marketplace company, launched the Zillow 3D Home tour, an interactive media for real estate buyers to remotely inspect houses using VR technology. The company uses AI to help break down barriers between listing media like virtual tours and photos and listing data like room dimensions and square footage.

Market Drivers

• The rise in the adoption of augmented reality and virtual reality in the infotainment industry

An increase in demand for head-mounted displays (HMDs) in the entertainment and gaming industry, adoption of the augmented reality and virtual reality market for marketing strategies, and rising demand for AR/VR in the e-commerce and retail industries are key factors driving AR/VR market growth. Furthermore, rising demand for AR and VR devices in the manufacturing and healthcare industry and increased investments and funding by key market players are propelling market growth. For instance, in May 2019, Microsoft released the HoloLens 2, the second-generation HoloLens. Free trials of Azure Credits, Unity Pro, and the Unity PiXYZ CAD data plugin are included in the HoloLens 2 complete set. In addition, Unreal Engine 4 support for HoloLens 2 was announced, providing customers with a more realistic experience.

• Significance of augmented reality in the healthcare sector

Market Restraints:

• High investment required for AR/VR development

The high cost of AR/VR development and SoC integration is a significant impediment to the deveeelopment of the augmented and virtual reality markets. Furthermore, security compliance issues and increasing cyber-attacks due to the absence of security standards are significant factors challenging market dynamics. Moreover, lacking technical expertise will challenge market growth, resulting in data manipulation, sniffing, spoofing, cyber-attacks, and man-in-the-middle attacks.

• Lack of technical expertise

Market Opportunities

• Industrial automation is expected to boost the augmented and virtual reality markets.

The industrial automation industry is expected to promote augmented reality and virtual reality market size to better communication between self-monitoring devices, production machines, the internet of things (IoT), and machine-to-machine communication (M2M). The high demand for AR/VR in the manufacturing industry is expected to provide market participants with numerous opportunities in the future.

Augmented Reality and Virtual Reality Market Segmentation

Technology Insights

The augmented reality and virtual reality market segmentation, based on technology, is marker-based (passive marker, active marker), marker-less (model-based, image processing-based), anchor-based, virtual reality, non-immersive, and semi and fully immersive. In 2021, the semi and fully immersive segment accounted for the highest revenue share in the augmented reality and virtual reality market. It is also expected to have the highest CAGR during the forecast period. The segment's growth can be attributed to the ongoing surge in demand for VR HMDs. In a digital platform, semi and fully immersive technology replicate real-world surroundings' architecture. It necessitates using complex simulators, high-resolution displays, and powerful PCs. Students can use VR technology to practice cognitive and motor skills that they will not be able to do in an educational setting.

Offering Insights

The augmented reality and virtual reality market segmentation, based on offering, is hardware, sensors, semiconductor components, displays and projectors, position trackers, cameras, and others (computer/video generator and combiner). The hardware segment had the highest revenue share in 2021 and is expected to rise at the highest CAGR in the market during the forecast period. The increasing use of smartphones, tablets, and other technologically advanced electronic devices is fuelling segment growth. Input devices, output devices, and consoles are all part of the hardware segment. The rapid adoption of virtual reality headsets in commercial applications, amusement and theme parks, and other locations are expected to provide growth opportunities for Original Equipment Manufacturers (OEMs). Furthermore, advances in lightweight wearable technologies are expected to fuel demand for VR head-mounted displays.

Vertical Insights

The augmented reality and virtual reality market segmentation, based on vertical, is consumer electronics, media & entertainment, automotive, healthcare, retail, aerospace & defense, BFSI, IT & telecommunication, manufacturing, education, travel & tourism, and real estate. The healthcare segment is expected to increase at the fastest rate during the forecast period due to the wide range of opportunities for VR in the healthcare sector, including medical marketing, disease awareness, and medical learning and training. ImmersiveTouch, Inc. and Osso VR, Inc. provide virtual reality (VR) solutions to train medical students and surgeons. Furthermore, virtual surgeries, emergency training, and VR anatomy apps are in high demand to help medical professionals learn more precisely. Because of the increasing demand for VR technology in the gaming and entertainment industries, the consumer segment is expected to grow significantly over the forecast period. However, the use of VR headsets in the commercial sector, such as real estate, vehicle showrooms, and retail stores, resulted in the retail segment having the highest market share in 2021.

Device Type Insights

The augmented reality and virtual reality market research segmentation, based on device type, is augmented reality, head-mounted displays, head-up displays, virtual reality, gesture-tracking devices, and projectors and display walls. Head-up displays held the largest share of the AR/VR market in 2021 and are anticipated to grow at the fastest CAGR in the forecast period. Head-up displays (HUDs) are primarily used for image augmentation and are currently used for training in the aerospace and defense industries and the automotive industry. The market for augmented reality HUDs is still in its infancy, but it is expected to become commercially viable soon. The primary function of augmented reality head-up displays in automobiles and airplanes is navigation. Displaying information on the windscreens, such as a route and speed, as well as any other vital details in the driver's line of sight, would assist drivers in driving safely. The market would expand further.

Figure 2: Global Augmented Reality and Virtual Reality Market Share by Region, 2021 (%)

Augmented Reality and Virtual Reality Market Overview, by Region

By region, the augmented reality and virtual reality market report have been divided into North America, Europe, Asia-Pacific, and the Rest of the World. Asia-Pacific region accounted for the most extensive market share. The North American Region is projected to exhibit the highest CAGR during the review period.

Asia-Pacific

In 2021, Asia-Pacific reported the largest revenue share in AR/VR market, owing to ongoing advancements in VR technology. China's VR market grew significantly, as the country is a significant distributor of HMDs and other VR-related hardware. Technological advances are also assisting in the market growth in Southeast Asian countries. Japan launched commercial 5G services in 2019, prompting telecom companies to use strategic ingenuity to provide augmented reality and virtual reality viewing platforms that leverage 5G connectivity. Programs by the government and other related bodies, such as funds and investments to assist VR businesses, are also encouraging the region's adoption of VR technology.

North America

North America is expected to be the fastest-growing regional market during the forecast period. This is due to the widespread use of VR technology in various applications across various industry sectors, particularly in the gaming and automobile industries. Europe's larger gaming population contributes to the region's adoption of cutting-edge VR headsets. The speedy development and sale of powerful VR hardware sets targeted at the gaming community have sped up the regional market's growth.

Augmented Reality and Virtual Reality Market Competitive Landscape

The market includes tier-1, tier-2, and local players. The tier-1 and tier-2 players have reach with diverse product portfolios. Companies such as Google (US), Apple Inc. (US), Sony Corporation (Japan), Samsung (South Korea), Microsoft (US), HTC Corporation (Taiwan), Oculus (US), and PTC (US) dominate the augmented reality and virtual reality market due to product differentiation, financial stability, strategic developments, and diversified regional presence. AR/VR developers focus on creating personalized solutions and standard products to cater to a customer base. Curtain wall manufacturers prioritize investment in advanced materials, robust R&D projects, and strategic partnerships. Furthermore, companies are focusing on aggressive marketing, promotion, and participation in trade shows to strengthen their market positioning. Several major players in the augmented reality and virtual reality market are focusing on diversifying and improving their services. This has enabled companies to provide more detailed insights to clients and marketers about product sales, allowing them to make data-driven decisions. For instance, Epson America, Inc., a division of Japan's Seiko Epson Corporation, has partnered with 3D HoloGroup (US), a company specializing in AR software architecture and systems integration, and sold Epson's AR glasses beginning in March 2020.

Prominent players in the augmented reality and virtual reality market include 

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  Google (US), 

  
  


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  Sony Corporation (Japan)

  
  


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  HTC Corporation (Taiwan)

  
  


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  Microsoft (US)

  
  


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  Oculus (US)

  
  


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  PTC (US)

  
  


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  Samsung (South Korea)

  
  


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  Seiko Epson Corporation (Japan)

  
  


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  Lenovo (China)

  
  


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  Apple Inc. (US)

  
  


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  Wikitude (Austria)

  
  


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  Blippar Group Limited (UK)

  
  


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  MAXST CO., Ltd. (South Korea)

  
  


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  EON Reality (US)

  
  


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  Uil VR Solutions BV (US)

  
  


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  CyberGlove Systems Inc. (US)

  
  


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  Nintendo (Japan)

  
  


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  Others

  
  

Scope of the Augmented Reality and Virtual Reality Market Report

Technology outlook

• Augmented Reality


• Marker-based (Passive Marker, Active Marker)


• Markerless (Model-based, Image Processing-based)


• Anchor-based


• Virtual Reality


• Non-immersive


• Semi and Fully Immersive

Offering Outlook

• Hardware


• Sensors


• Semiconductor Components


• Displays and Projectors


• Position Trackers


• Cameras


• Others (Computer/video generator and combiner)

Software Outlook

• Software Development Kits


• Cloud-based Services


• AR Software Functions


• VR Content Creation

Device Type Outlook

• Augmented Reality


• Head-mounted Displays


• Head-up Displays


• Virtual Reality


• Head-mounted Displays


• Gesture-tracking Devices


• Projectors and Display Walls

Vertical Outlook

• Consumer Electronics


• Media & Entertainment


• Healthcare


• Retail


• Aerospace & Defense


• Automotive


• BFSI


• IT & Telecommunication


• Manufacturing


• Education


• Travel & Tourism


• Real Estate

Region Outlook

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  North America
  
  
  
  • US
  
  
  • Canada
  
  
  • Mexico
  
  
  
  


• 
  Europe
  
  
  
  • UK
  
  
  • Germany
  
  
  • France
  
  
  • Italy
  
  
  • Spain
  
  
  • Rest of Europe
  
  
  
  


• 
  Asia-Pacific
  
  
  
  • China
  
  
  • India
  
  
  • Japan
  
  
  • Australia and New Zealand
  
  
  • Rest of Asia-Pacific
  
  
  
  


• 
  Rest of the World
  
  
  
  • South America
  
  
  • Middle East
  
  
  • Africa
  
  
  
  

Objectives of the Study

The objectives of the study are summarized in five stages. They are as mentioned below:

Augmented Reality and Virtual Reality Market Forecast & Size:

To identify and estimate the market size for the augmented reality and virtual reality market segmented by technology, offering, software, device type, and vertical by value (in US dollars). Also, to understand the consumption/demand created by consumers of augmented reality and virtual reality between 2022 and 2030

Market Landscape and Trends:

To identify and infer the drivers, restraints, opportunities, and challenges for the augmented reality and virtual reality market

Market Influencing Factors:

To find out the factors which are affecting the sales of augmented reality and virtual reality among consumers

Impact of COVID-19:

To identify and understand the various factors involved in the augmented reality and virtual reality market affected by the pandemic

Company Profiling:

To provide a detailed insight into the major companies operating in the market. The profiling will include the financial health of the company in the past 2-3 years with segmental and regional revenue breakup, product offering, recent developments, SWOT analysis, and key strategies.

Intended Audience

• Augmented Reality and Virtual Reality Service Providers


• Software Developers


• Augmented Reality and Virtual Reality Key Players