Augmented and Virtual Reality Market by Enterprise, Technology (Augmented Reality, Virtual Reality), Offering (Hardware, Software), Device Type (HMDs, HUDs, Gesture Tracking Devices), Application and Region - Global Forecast to 2029
[307 Pages Report] The Augmented Reality and Virtual Reality Market was valued at USD 22.12 billion in 2024 and is expected to reach USD $96.32 billion by 2029, at a CAGR of 34.2% during the 2024-2029 period.
Rapid growth of AR and VR applications in the gaming and entertainment industry are the major drivers of the augmented and virtual reality market. This is attributed to AR delivering uncommon combination that refashions how people relate with the digital content and VR enhancing the performance, compactness, and comfort such as Apple Vision Pro, Meta Quest 3. Furthermore, the growing implementation of government initiatives and investments towards AR and VR technologies provides growth opportunities in the augmented and virtual reality market. For instance, In September 2023, a UK-based holographic company Envisics, that manufactures in-car technology that projects navigation and safety alerts on the windscreen rose to USD 100 million in its Series C round is expected to help AR head-up displays reach commercialization over the forecast period.
Impact of AI/Gen AI on augmented and virtual reality market
The major use cases of AI/Gen AI in the augmented and virtual reality market includes content creation, object recognition and tracking, user interaction, intelligent virtual assistants and spatial mapping. AI-enhanced content creation empowers the fast and easy generation of quality assets, environments, and interactions that provide more immersive and dynamic AR and VR experiences. AI-driven object recognition and tracking boost interactivity and realism several-fold by ensuring that virtual elements fit well into the real world—key to gaming, training, and industrial applications. Besides, AI enhances user interaction with intuitive and responsive interaction through natural language processing, gesture recognition, and adaptive interfaces that give better user engagement. Other benefits are AI-powered virtual assistants that can provide personalized aid and learn; however, their full potential is again limited because of technological and integrational challenges. Finally, spatial mapping enhanced by AI is required in the development of most immersive AR and VR experiences, since it accurately perceives and reconstructs physical environments; in this regard, spatial awareness drives applications like navigation, gaming, and training.
Attractive Opportunities in Augmented Reality Market
Augmented and Virtual Reality Market Forecast to 2029
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Market Dynamics
Driver: Rapid growth of AR and VR applications in the gaming and entertainment industry
Demand for AR has been ever-increasing within the gaming and entertainment market simply because of its ability to alter a user's experience in extraordinary ways. AR puts together the uncommon combination of immersion and interactivity that refashions how people relate with digital content. On the gaming front, AR is creating worlds that merge the real and the virtual, urging players to explore their surroundings and collaborate with others in becoming part of the game. It physicalizes gameplay and encourages an active physical lifestyle and fosters the solving of problems.
VR technology has been gaining momentum lately in the gaming industry. By several key factors such as hardware improvements. In the hardware for VR gaming today, people have witnessed improved performance, compactness, and comfort in products like Apple Vision Pro and the ensuing Meta Quest 3. Improvements in display technology, increased resolution, better visuals, and spatial stability add up to enhance the overall immersive experience for gamers. Hence, their rapid growth in AR and VR applications in the gaming and entertainment industry drives market growth for augmented and virtual reality technologies.
Restraint: Presence of privacy infringement and technological constraints
The rapid evolution of AR technology has launched a wave of creative applications and experiences. These result in enhanced interactions between the digital and physical worlds in exciting ways, which give rise to critical concerns about potential security and privacy issues. AR technology often lays digital information over the top real world, mingling new routes of data collection and sharing. As digital elements become gradually aware of, and augment physical environments, there is an increased likelihood of collecting personal data such as location information, images, as well as behavioral patterns. This information is applied in creating elaborate profiles for each person, hence raising concerns about its gathering, retention, and exploitation, thereby limiting the expansion of the AR technology market being bounded.
Viewers generally experience a 90-degree viewing angle when using VR devices which is significantly narrower as compared to the natural FOV of a human being, which is approximately 190 degrees horizontal and 120 degrees, oriented perpendicular to one another. Such misalignment reduced the level of immersion that VR experiences can bring about, as users are left with a feeling of limited peripheral vision compared to the actual perception existing in the real world. Hence, technological constraints are limitation factors to the growth of VR.
Opportunity: Growing implementation of government initiatives and investments
Governments across the world are inducing the development of the AR market with their support in terms of AR funding, R&D support, startup grants, and partnership with academic institutes. For instance, In September 2023, a UK-based holographic company Envisics, that manufactures in-car technology that projects navigation, safety alerts onto the windscreen rose USD 100 million in its Series C round is projected to commercialize AR head-up displays during the forecast period. Furthermore, in August 2023, companies like Snapchat launched the reward lens creator program with AR creators and developers in order to monetize their top-performing lenses. If an AR lens creator's invention achieves high engagement in countries such as the United States, India, or Mexico, they could potentially earn up to USD 7,200 per month. Such developments fuels the awareness of AR market which thereby drives the market growth of AR in the future.
The current period witnesses huge investment in the VR market for the reason that the endowment in this technology which is potentially leading in introducing transformation in several industries. The investment infusion indicates the increasing acceptance of the capability of VR to redesign digital interacting, learning, communicating, and experiential landscapes. Evidently, the numerous applications under VR attract investors to from billing games, entertainment, to healthcare, education and finance.
Challenge: Lack of flexibility and technical issues in various AR VR products
The lack of flexibility within the different AR platforms rises deep concern over the development of such AR technology. Compatibility issues arise as the key problem because most AR platforms often have their proprietary hardware and software; hence, they make it hard to create content for an all-in-one system with interchangeable parts. In addition, development of cross-platform AR applications is complicated and time-consuming; again, it often necessitates that several versions are made or that specialized tools be used, which will multiply development costs and delay time-to-market, which will in turn hinder the growth of the AR technology market.
Key technical limitations with the VR market are related to display resolution and haptic feedback and optimal user engagement. Attaining a very high level of visual fidelity that is comparable to the complexity of human vision is very important, and the role played by visual resolution is critical. While improvements are made, and fine details are still difficult to reproduce accurately, giving rise relatively frequently to artifacts such as "screen door effect" where a visible pixel grid detracts from immersion and blurs the distinction along the line, between the digital and the physical. Therefore, the presence of technical problems dampens the market appeal of the VR technology
Augmented and Virtual Reality Market Ecosystem
The prominent players in the augmented and virtual reality market are Meta. (US), Sony Group Corporation (Japan), Apple, Inc. (US), ByteDance (China), and DPVR (China). These companies perform organic and inorganic growth strategies to expand themselves globally by providing advanced augmented and virtual reality products.
AR head-mounted displays (HMDs) and VR gesture tracking devices are expected to witness the highest CAGR in the augmented and virtual reality market during the forecast period
AR head-mounted displays (HMDs) are expected to witness the highest CAGR in the augmented reality market during the forecast period. This is attributed to the accelerating adoption of AR HMDs in consumer, and aerospace and defense applications. In consumer applications AR HMDs are highly used in gaming, sports, and entertainment sector. They help rogue pilots in the air force and navy personnel to clearly view and aim at enemy operations more accurately. The other segment involved in this category is the AR smart eyewear segment. It is gaining the interest of enterprises and healthcare, retail, automotive and consumer segments. Major industry players, which include Osterhout Design Group (UK), Epson, Google, Magic Leap, Vuzix, and Solos (UK) are committed to the hype of augmented reality smart whereas in the case of the virtual reality hardware consumer ones, the crucial hardware device in the virtual reality domain is the VR gesture tracking device. The VR gesture tracking device will render the user immersed. So naturally, the demand for the gesture tracking devices will soar in the virtual reality industry.
Enterprise and consumer applications is expected to have the largest market size in augmented and virtual reality market, respectively, during the forecast period
The enterprise application segment was predicted to lead the market for AR during the forecasting period in terms of market size. Factors driving growth in these segments include an increasing need to improve training methodologies by a reduction in human errors and by optimizing efficiency. Further, the addition of AR has revolutionized training methodologies by giving trainers increased visibility and hence conforms to the industry 4.0 trend. Additionally, there is high demand in the entertainment sector for developing VR applications to enhance user experiences in sports broadcasting and gather information through social networking sites. Therefore, the demand for VR technology in consumer applications is expected to have the largest market size during the forecast period.
Asia Pacific region is expected to witness the highest CAGR in the augmented and virtual reality market during forecast period
Asia Pacific is expected to witness the highest CAGR in the augmented and virtual reality market during the forecast period, primarily due to the factors such as widespread use of smartphones, increased adoption of smart electronic devices, rising demand for AR technology in healthcare applications, presence of numerous key players in the region such as Sony Group Corporation, ByteDance, DPVR among others, and availability of cost-effective VR products from local manufacturers, especially in China. Therefore, Asia Pacific is expected to witness the highest CAGR during the forecast period.
Augmented and Virtual Reality Market by Region
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Key Market Players
The major players in the augmented and virtual reality companies include Meta. (US), Sony Group Corporation (Japan), Apple, Inc. (US), ByteDance (China), and DPVR (China). These companies have used both organic and inorganic growth strategies such as product launches, product development, partnerships, collaborations, contracts, joint investments, strategic supplier relationships, and expansions to strengthen their position in the market.
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Report Metric |
Details |
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Market size available for years |
2020–2029 |
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Base year considered |
2023 |
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Forecast period |
2024–2029 |
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Forecast units |
Value (USD Million/Billion), Volume (Million Units) |
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Segments covered |
By Technology, Offering, Device Type, Application, and Region |
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Geographies covered |
North America, Europe, Asia Pacific, and Rest of the World (RoW) |
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Companies covered |
The major players in the augmented and virtual reality market are Meta. (US), Sony Group Corporation (Japan), Apple Inc. (US), ByteDance (China), DPVR (China), Intel Corporation (US), Magic Leap, Inc. (US), Ultraleap (US), Vuzix (US), Xiaomi (China), HTC Corporation (Taiwan), Google (US), SAMSUNG (South Korea), Microsoft (US), EON Reality (US), Maxst Co., Ltd. (South Korea), Blippar Group Limited (UK), Atheer, Inc. (US), Nintendo (Japan), Ultraleap (US), Penumbra Inc. (US), Psico Smart S.L. (Spain), Panasonic Corporation (Japan), Scope AR (US), Continental AG (Germany), Virtually Live (Switzerland), Intel Corporation (US), Craftars (Romania), BidOn Games Studio (Ukraine), Appentus Technologies (India), 3D Cloud (US), and WayRay AG (US) |
Augmented and Virtual Reality Market Highlights
The study segments the augmented and virtual reality market based on technology, offering, device type, application, and region at the regional and global level.
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Segment |
Subsegment |
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By Technology |
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By Offering |
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By Device Type |
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By Application |
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By Region |
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Recent Developments
- In June, 2024, Apple Inc. launched vision OS 2 which provided new spatial computing experiences to Vision Pro. Through this the user can turn their photos into spatial photos, gestures for navigating visionOS and many more ways to take advantage of spatial computing.
- In June 2024, Google formed a collaboration with the artist Grand Palais Immersif’s recent exhibition “Loading: Urban Art in the Digital Age Exhibition” which is an immersive exhibition that portrays the history of urban art and sheds light on the impact of digital technologies.
- In May 2024, Alo Moves and Meta formed a partnership that will features 3D classes for a new level of immersion. Under this partnership, Alo Moves will utilize Meta Quest 3 in the same rooms as the instructors for classes spanning yoga, Pilates and meditation.
- In April 2024, Meta. And EssilorLuxottica formed a partnership to produce second-generation smart glasses which expands the Ray-Ban Meta smart glasses collection. It includes additional features such as updates to Meta AI that will make the glasses more useful.
- In January 2024, Sony Group Corporation developed an immersive spatial content creation system which includes XR HMD which delivers high quality 4K OLED microdisplays, video see through functions and a pair of controllers that are used for intuitive interaction with 3D objects and precise pointing.
Frequently Asked Questions:
What is the current size of the global augmented and virtual reality market?
The augmented reality market is estimated to be worth USD 10.9 billion in 2024 and is projected to reach USD 60.3 billion by 2029, at a CAGR of 40.7% during the forecast period. The virtual reality market is estimated to be worth USD 11.2 billion in 2024 and is projected to reach USD 36.0 billion by 2029, at a CAGR of 26.3% during the forecast period.
Who are the winners in the global augmented and virtual reality market?
Companies such as Meta. (US), Sony Group Corporation (Japan), Apple, Inc. (US), ByteDance (China), and DPVR (China), fall under the winner’s category.
Which region is expected to witness the highest CAGR?
Asia Pacific is expected to witness the highest CAGR during forecast period which is attributed to presence of numerous key players in the region such as Sony Group Corporation, ByteDance, DPVR among others, and availability of cost-effective VR products from local manufacturers, especially in China.
What are the major drivers and opportunities related to the augmented and virtual reality market?
Rapid growth of AR and VR applications in gaming and entertainment industry isthe major driver of the augmented and virtual reality market. Furthermore, the growing implementation of government initiatives and investments towards AR and VR technologies provides growth opportunities in the augmented and virtual reality market.
What are the major strategies adopted by market players?
The key players have adopted product launches, product development, partnerships, collaborations, contracts, joint investments, strategic supplier relationships, and expansions to strengthen their position for the augmented and virtual reality market.
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The research study involved 4 major activities in estimating the size of the augmented and virtual reality market. Exhaustive secondary research has been done to collect important information about the market and peer markets. The validation of these findings, assumptions, and sizing with the help of primary research with industry experts across the supply chain has been the next step. Both top-down and bottom-up approaches have been used to estimate the market size. Post which the market breakdown and data triangulation have been adopted to estimate the market sizes of segments and sub-segments.
Secondary Research
In the secondary research process, various secondary sources have been referred to for identifying and collecting information required for this study. The secondary sources include annual reports, press releases, and investor presentations of companies, white papers, and articles from recognized authors. Secondary research has been mainly done to obtain key information about the market’s value chain, the pool of key market players, market segmentation according to industry trends, regional outlook and developments from both market and technology perspectives.
Primary Research
In primary research, various primary sources from both supply and demand sides have been interviewed to obtain qualitative and quantitative insights required for this report. Primary sources from supply side include experts such as CEOs, vice presidents, marketing directors, manufacturers, technology and innovation directors, end users and related executives from multiple key companies and organizations operating in the augmented and virtual reality market ecosystem.
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Market Size Estimation
Top-down and bottom-up approaches have been used to estimate and validate the size of the augmented and virtual reality market. The key players in the market have been identified through secondary research, and their market shares in respective regions have been determined through primary and secondary research. This entire research methodology includes the study of key insights by top players, as well as interviews with experts (such as CXOs, vice presidents, directors, and marketing executives) for quantitative and qualitative key insights. All percentage shares, splits, and breakdowns have been determined using secondary sources and verified through primary sources. All parameters that affect markets covered in this research study were accounted for, viewed in detail, verified through primary research, and analyzed to obtain the final quantitative and qualitative data. This data has been competitive and supplemented with detailed inputs and analysis from the MarketsandMarkets data repository and presented in this report.
In the market engineering process, both top-down and bottom-up approaches have been used along with data triangulation methods to estimate and validate the size of the augmented and virtual reality market and other dependent submarkets. The research methodology used to estimate the market sizes includes the following:
- Analyzing the size of the global augmented and virtual reality market by identifying segment and subsegment revenue related to the market
- Identifying the total number of augmented and virtual reality HMDs shipped globally
- Estimating the ASP of augmented and virtual reality HMDs
- Estimating the size of the augmented and virtual reality HMDs market (augmented and virtual reality HMDs shipment * ASP of augmented and virtual reality HMDs)
- Estimating the market size of other augmented and virtual reality display types
- Estimating the market size of augmented and virtual reality hardware market size (summation of augmented and virtual reality HMDs market and market of other augmented and virtual reality display types)
- Estimating the market size of augmented and virtual reality’s new software by determining its percentage increase with respect to augmented and virtual reality hardware market size
- Estimating the market size of augmented and virtual reality’s retrofitted software by determining its percentage increase with respect to augmented and virtual reality new software market size
- Estimating the augmented and virtual reality software market size (summation of augmented and virtual reality’s new software market and market of augmented and virtual reality’s retrofitted software)
- Estimating the global augmented and virtual reality market size (summation of augmented and virtual reality software market size and augmented and virtual reality hardware market size)
- Identifying the upcoming projects related to augmented and virtual reality by various companies in different regions and forecasting the market size based on these developments and other important parameters.
Market Size Estimation Methodology-Bottom-up Approach
Market Size Estimation Methodology-Top-Down Approach
Data Triangulation
After arriving at the overall market size by the market size estimation process explained in the earlier section, the overall augmented and virtual reality market has been divided into several segments and subsegments. To complete the overall market engineering process and arrive at the exact statistics for all segments, the data triangulation and market breakdown procedures have been used, wherever applicable. The data has been triangulated by studying various factors and trends from both the demand and supply side perspectives. Along with data triangulation and market breakdown, the market has been validated by top-down and bottom-up approaches.
Market Definition
AR improves the natural environment by overlaying potential digital information which includes images, text, or 3D objects. This augmentation can be actualized in many devices such as AR head-mounted displays (HMDs), smartphones, tablets, AR smart glasses, and heads-up displays (HUDs). On top of a user's view of the actual world, the technology lays computer-generated elements—thus making it interactive and enriched. One of the common examples of AR is the Pokémon GO game, whereby digital creatures seem to exist within an actual world when viewed through the camera of a smartphone.
On the other hand, VR blacks out users into a completely computer-created environment and replace the real world with a simulated one physically. Users usually put on and wear VR head-mounted displays, which, covering the field of vision, often incorporate motion tracking sensors. This sort of head mounted displays, that give users a feeling of existing in a virtual world, is called a feeling of presence in frontier interact in and navigate this digital space as if it were real. Common uses of VR include gaming, training simulations, virtual tours, and immersive storytelling experiences.
Stakeholders
- Raw material and manufacturing equipment suppliers
- Semiconductor foundries
- Original Equipment Manufacturers (OEMs)
- Augmented and virtual reality device manufacturers
- Original design manufacturers (ODMs) and OEM technology solution providers
- Software, and Technology Providers
- Standardization and Testing Firms
- Government Bodies such as Regulatory Authorities and Policymakers
- Research Institutes and Organizations
- Market Research and Consulting Firms
- Technology investors
The main objectives of this study are as follows:
- To define, analyze and forecast the augmented and virtual reality market size, by virtual reality technology, offering, device type, and application in terms of value
- To define, analyze and forecast the augmented and virtual reality market size, by device type, in terms of volume.
- To forecast the market size for various segments with respect to four main regions, namely, North America, Europe, Asia Pacific and Rest of the World (RoW)
- To provide detailed information regarding the major drivers, restraints, opportunities, and challenges influencing the growth of the augmented and virtual reality market
- To study the complete supply chain and related industry segments for the augmented and virtual reality market
- To strategically analyze the micromarkets1 with respect to individual growth trends, prospects, and contributions to the total market
- To analyze the supply chain, market ecosystem; trends/disruptions impacting customer’s business; technology analysis; pricing analysis; Porter’s five forces model; key stakeholders & buying criteria; case study analysis; trade analysis; patent analysis; key conferences & events, 2024–2025; regulations related to the augmented and virtual reality market; and investment and funding scenario.
- To analyze opportunities in the market for various stakeholders by identifying the high-growth segments of the market.
- To strategically profile the key players and comprehensively analyze their market position in terms of ranking, core competencies2, company valuation and financial metrics and product/brand comparison; along with detailing the competitive landscape for the market leaders.
- To analyze competitive developments such as product launches, product developments, partnerships, collaborations, acquisitions, joint investments, strategic supplier relations, contracts, acquisitions, expansions and research and development (R&D) activities carried out by players in the augmented and virtual reality market.
Customizations Options:
With the given market data, MarketsandMarkets offers customizations according to the company’s specific needs. The following customization options are available for the report:
Company Information
- Detailed analysis and profiling of additional market players (up to 5)
Geographic Information
- Detailed analysis of additional countries (up to 5)
Generating Response ...
Growth opportunities and latent adjacency in Augmented and Virtual Reality Market
We have developed a system to aid doctors with the patients analysis prior to surgery with the Oculus Rift VR-Device and now want to explore the potentials of the VR software for studying. To continue our research in the area of our interest, your report would be of great interest for us in order to gain more financing. I would therefore like to know if the report covers comprehensively the aspect of VR software and its use-cases mapped against the applications.
I am interested in your market forecast for Augmented/Virtual Reality. However, being an IT services company (particularly a system integration), I am more interested in finding out the market forecast for IT Services related to Augmented/Virtual Reality. Do you have this information in your report? Also, i would like to know if the report covers AR usage on mobile - market size, market potential/growth both in terms of current apps and consumer usage.
I am interested to understand the global trends and projects in the AR/VR market over the next 5-10 years and the major players in this space. I would also like to know the product offerings of the major industry players, their growth areas in all industries, their expertise of the technology, and reception from consumers. Does your report cover the aspect of competitive landscape in detail?
Hello, I would like to cite this report, but I cannot find the names of the authors. Who are they ?