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Immersive Revolution: Unveiling the Growth Trajectory of AR and VR Hardware
In the realm of technological evolution, augmented reality (AR) and virtual reality (VR) stand as transformative forces reshaping our interaction with the digital world. The global market for AR and VR hardware is experiencing a meteoric rise, with projections indicating it will reach a staggering USD 389,066.4 million by 2030, riding the wave of a remarkable compound annual growth rate (CAGR) of 37.8% during the forecast period of 2022–2030, according to market analysis by MRFR (Market Research Future).
This substantial growth is fueled by a confluence of factors, with diverse industries contributing to the burgeoning demand for AR and VR hardware. Sectors such as gaming, entertainment, aerospace and military, retail, and manufacturing are at the forefront of this surge. Key players in the immersive technology landscape, including tech giants such as Google, Facebook, and DAQRI, are not merely riding the wave; they are actively shaping it. Continuous rebranding and reinvention of immersive technologies, particularly through hardware, are pivotal factors propelling market growth.
In particular, the gaming and entertainment sector has emerged as a powerhouse, commanding the highest revenue share in 2021 at 34.58%, with a total revenue of USD 7,723.8 million. This underscores the integral role AR and VR play in enhancing the gaming and entertainment experience, offering users a new dimension of engagement and interaction. As the demand for more immersive and realistic gaming experiences continues to rise, so does the market for AR and VR hardware.
Geographically, Asia Pacific led the market in 2021, accounting for 40.92% of the total share, followed by North America and Europe with shares of 27.53% and 20.99%, respectively. The robust market presence in Asia Pacific is a testament to the region's proclivity for embracing cutting-edge technologies and fostering innovation.
Within the AR and VR hardware market, sensors, processors, controllers, cameras, headphones, display monitors, and other components constitute the hardware types driving innovation. Among these, the sensors segment emerged as a frontrunner, amassing a high market value of USD 6,180.9 million in 2021, demonstrating a commendable CAGR of 28.1% during the forecast period. Sensors play a crucial role in enabling the immersive experiences that AR and VR promise, underlining their significance in the hardware ecosystem.
Application-wise, head-mounted displays, head-up displays, and handheld devices are the key segments shaping the AR and VR landscape. The head-mounted display segment commands the lion's share, holding 73.88% of the market and achieving a market value of USD 16,501.5 million in 2021. This segment is projected to continue its dominance with a robust CAGR of 35.8% during the forecast period of 2022–2030. Head-mounted displays, with their ability to provide an immersive visual experience, find applications across various industries, from gaming to healthcare and beyond.
In the healthcare sector, the global AR and VR hardware market is set to witness a remarkable CAGR of 44.3% during the forecast period. This underscores the increasing adoption of immersive technologies in healthcare applications, ranging from medical training simulations to patient care and treatment planning.
As AR and VR hardware continue to permeate diverse industries, the market is poised for unprecedented growth. The convergence of technological advancements, industry demand, and innovative applications is paving the way for an immersive revolution, redefining the boundaries of human-computer interaction. The journey towards a fully immersive digital experience is underway, with AR and VR hardware at the forefront of this transformative wave.
Covered Aspects:
| Report Attribute/Metric | Details |
|---|---|
| Growth Rate | 30.9% (2022-2032 Base Year 2019 Forecast Period 2022-2032 Historical Data 2018 Forecast Units Value (USD Billion) Report Coverage Revenue Forecast, Competitive Landscape, Growth Factors, and Trends Segments Covered Technology, Offering, Software, Device Type, Vertical Geographies Covered North America, Europe, Asia-Pacific, and the Rest of the World (RoW) Key Vendors Google (US), Sony Corporation (Japan), Apple Inc. (US), Samsung (South Korea), Microsoft (US), HTC Corporation (Taiwan), Oculus (US), PTC (US), Seiko Epson Corporation (Japan), Lenovo (China), Wikitude (Austria), Blippar Group Limited (UK), MAXST CO., Ltd. (South Korea), EON Reality (US), Uil VR Solutions BV (US), CyberGlove Systems Inc. (US), and Nintendo (Japan) Key Market Opportunities The industrial automation industry is expected to boost the augmented and virtual reality markets. Key Market Drivers The surge in the adoption of augmented reality and virtual reality in the infotainment industry |
Augmented Reality Virtual Reality Market Highlights:
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: Augmented Reality and Virtual Reality Market Share by Region, 2021 (%)
Source: Secondary Research, Primary Research, MRFR Database and Analyst Review
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
Augmented Reality and Virtual Reality Industry Developments
The UK-based Eric Wilkins' holographic start-up, Envisics, which specializes in manufacturing in-car set devices such as navigation systems and safety alerts projected on the windscreen, made USD 100 million in its Series C round in September 2023, and it is expected that the company will able to launch augmented reality head-up displays in the review period.
In August 2023, Snap Inc. started a reward lens creator program with Augmented Reality (AR) developers and creators to enable them to monetize their best lenses. For instance, a lens developed by an AR creator can earn around USD 7200 a month when that lens is actively clicked in the US, Mexico or India due to effective marketing. This is against the backdrop of low development expenditure as well, which creates conditions for stronger growth of AR in the future and increases the demand for AR technologies in the present.
In June, 2024, Apple Inc added new features to Vision Pro via the launch of Vision OS 2 watches. With this technology, users can edit their pictures to look three-dimensional, and access several features like finger movements and scroll through vision OS.
In June 2024, Google entered into a contract with the artist who did the recent exhibition “Loading: Urban Art in the Digital Age Exhibition" at Grand Palais Immersion, which is an immersive exhibition depicting urban art history and explaining how urban art has been affected by the digital.
In May 2024, Alo Moves and Meta officially established a partnership that will include 3D classes that feature a whole new level of immersion. According to this partnership, Alo Moves will incorporate the use of Meta Quest 3 within the same rooms as the instructors for classes that include but are not limited to yoga, pilates and meditation.
In January 2024, the equipment manufacturer Sony Group Corporation created a highly engaging spatial content development system, among other things, based on an XR HMD featuring high-definition 4K OLED microdisplays video see-through capabilities.
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
- 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
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