Virtual Reality Software Market Analysis

Virtual Reality Software Market overview

The Virtual Reality Software market industry is projected to reach USD 74.6 Billion by 2030, exhibiting a compound yearly growth rate (CAGR) of 44.00% during the forecast period (2024 - 2032). You are interacting with a virtual reality environment whenever you play Forge of Empires or any other computer game. Virtual reality is essentially an artificial environment that’s created by digital devices (AI.) It looks so real that you may forget that you are immersed in a made-up environment and think that it’s real.

Figure 1: Virtual Reality Software Market Size, 2023-2030 (USD Billion)

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

COVID-19 analysis

COVID-19 made its first grand appearance last spring. It seemed to be nothing more than a nuisance virus. However, public health and government officials soon saw that this was far from true. The fact that some people had to be hospitalized and even died because of the virus lead governments around the world to take action by imposing stay-at-home orders and lockdowns/quarantines.

Many industries and markets were adversely affected, but the virtual reality software market was not one of them. In fact, this market saw phenomenal growth as people began to do more activities online. Many more people were motivated to play computer games as a means of passing the time.

Market dynamics

Drivers

There are many factors that are driving growth in this virtual reality software market. One of these is the fact that the world is becoming more and more digital, and more people are working and being entertained remotely. This was a trend that was starting before last year, but COVID-19 served to accelerate this trend. 

Another factor that is driving growth in the virtual reality software market is the fact that more and more people are investing in research and development in terms of virtual reality. This means that newer and more advanced technologies are constantly being developed and marketed. The constant advances in technologies are also another factor that is driving growth in this market.

The last factor that is a growth driver is the fact that there is exploding demand for head-mounted displays that people sometimes need to play virtual reality games.

Opportunities

Many companies in the virtual reality software market are taking advantage of the opportunity that the market is experiencing tremendous demand. They are investing heavily in research and development to develop those technologies that will be real revenue generators in the short and long-term future.

Restraints

One restraint that companies in this market face are the fact that sales are not as high as they could be because virtual reality technologies are very expensive. 

Challenges

A key challenge that companies in this market face lie in continually doing the expensive research and development that will result in newer and more technologically advanced virtual technologies and accessories while keeping the prices of these technologies reasonable for the end consumer.

Cumulative growth analysis

The CAGR for the virtual reality software market is expected to be 44.00%% from the years between 2022-2030.

Technology analysis

Qualcomm is a major American player in the virtual reality software market. In many ways, it can be considered to be one of the most important leaders in the virtual reality software market. What put it in this enviable position was the fact that it invested heavily in research and development. This allowed it to come up with a new generation of virtual reality technologies with mind-blowing features and capabilities.

One of these technologies is the Snapdragon XR platform. It can playback videos at up to 360-degree angles. This, along with other features, makes it one of the most desirable virtual reality technologies. 

Segment overview

By type

The virtual reality software market is segmented into the following types:

• 3D modeling software


• 360 Degree custom virtual reality software


• Real-time simulation

When an object is shown in 3D, all three of its dimensions are shown at the same time in virtual reality space. Any object can be modeled. 3D images of objects are created when the software changes the shape and nature of polygons, edges, and vertices in virtual reality space. It’s possible to use specialized and advanced software programs to create virtual reality 3D objects.

These objects are created when people scan certain objects like books or car keys into the program. The program then collects data points that can be manipulated according to certain shapes like polygons. A result is a 3D object in virtual reality.

People who create virtual reality situations can use a myriad of software programs to do so. Some of these software programs include AutoCAD, ZBrush, 3DS Max, Sketchup, Blender, and Pixologic.

By Deployment

The virtual reality software market can be grouped into two categories by deployment:

• On-premise


• Cloud

By application

The following industries use virtual reality software technologies:

• Aerospace and defense


• Gaming and entertainment


• Diagnostics and surgeries


• Tourism


• Others

By region

The virtual reality software market can be divided into the following regions:

• North America


• European Union


• Asia-Pacific region

Regional analysis

The North American region has the largest regional market share for the virtual reality software market. One key reason for this is the fact that most of the major virtual reality software companies are located in the United States.

These companies are constantly engaging in research and development. This is part of the reason why companies in the North American region are leading - they are capable of creating a sustainable competitive advantage in the virtual reality software market.

The European Union has the second largest global, regional market share.

The Asia-Pacific region may have the smallest global, regional market share, but the regional CAGR is high. This is in part because of the fact that the two Asian giants of India and China are experiencing rapid economic growth. The reason why is because these two nations have a sophisticated and rapidly growing middle class that is hungry for virtual reality software and other related technologies.

Competitive landscape

The virtual reality software market remains highly competitive. One key reason for this is that there are many companies in this market. Many of these companies are large and therefore have access to almost unlimited monetary reserves. This gives them the opportunity to invest millions, if not billions, in the processes that lead to the development of the latest and most efficient virtual reality technologies that lead to the best gaming and other experiences. 

Added to this is the fact that there are many companies that are entering the market. They are largely driven by the fact that this market is very lucrative. 

Companies are resorting to a variety of measures to survive in this hyper-competitive market. One such measure is investing more intensively in research and development. The intention is to create a new generation of virtual reality software that can’t be copied easily by the competition. These companies make sure that this new generation of virtual reality software is what the public wants. This ensures that there is always strong and growing market demand for these software packages. The result is strong sales and a constant stream of revenue.

Other companies are finding strategic partnerships or joint ventures to be beneficial. The participating companies are able to pool their collective human, monetary, and other resources together to have a stronger profile. These groups of companies are in a strong position to do lots of quality research and development, which will lead to a new generation of more efficient software programs and packages that the end customer wants and needs.  

But joint ventures give the participating companies more advantages. The ability to tap into more resources at any one time means that these companies can invest much more in all types of marketing, especially digital marketing. This creates more awareness about their new product launches in different markets. This allows them to enter into new markets. It also allows them to solidify their positions in existing markets.

When companies merge with/acquire one another, they end up restructuring. It’s this ‘shuffling around’ of resources that leaves the resulting larger company with more resources. This allows it to invest in the research and development needed to come up with new products that it can roll out in product launches. These companies are also in a good position to enter into new markets and do very well. They can also solidify their positions in existing markets when they are in this beneficial position. 

One company that has done well is Qualcomm. This company is in a good position to enter into new markets largely because it has invested millions in the research and development that’s capable of creating new products that are popular and will sell well because they’re ‘just what the doctor ordered!’

List of companies

Recent developments

February 2023: 

Big names like Samsung, Google, and Qualcomm joined forces to build an even better mixed-reality platform for future VR experiences. Think cooler games and more immersive entertainment!

October 2023: 

Sony announced a brand new PSVR headset to level up your PlayStation VR experience, connecting directly to the PS5 for smoother gameplay.

March 2022: 

HTC partnered with Holoride to bring VR entertainment to your car! Imagine exploring virtual worlds while you're on the road (as a passenger, of course).