AR & VR - Africa

Africa

Revenue in Africa's AR & VR market market is projected to reach US$398.5m in 2024.
Revenue in this market is expected to show an annual growth rate (CAGR 2024-2029) of 9.62%, resulting in a projected market volume of US$630.8m by 2029.
The largest market within Africa's market is AR Software, which is anticipated to have a market volume of US$127.8m in 2024.
While most revenue is generated the United States with a projected market volume of US$10,900.0m in 2024, in Africa is also poised for growth.
In the AR & VR market market, the number of users in Africa is expected to amount to 208.4m users by 2029.
User penetration in Africa will be 28.9% in 2024 and is expected to increase to 35.0% by 2029.
The average revenue per user (ARPU) in Africa is expected to amount to US$2.5.
In Africa, the AR & VR market is witnessing significant growth as innovative startups leverage local cultural narratives to enhance immersive experiences.

Definition:

Augmented reality (AR) and virtual reality (VR) make it possible to combine the real and virtual worlds. AR is generally accessed via mobile phones and primarily relies on lenses. AR effects can be created by using lenses in social media apps, for example. AR is also used for displaying digital 3D objects in our surroundings, e.g., in gaming or eCommerce apps. Meanwhile, VR technology allows users to dive into the virtual world, and, unlike AR technology, it requires a headset device which enables the creation of virtual worlds.

Structure:

The AR & VR market consists of six different markets: AR Advertising, AR Hardware, AR Software, VR Advertising, VR Hardware, and VR Software. AR Advertising covers mobile advertising that is displayed in the most prominent social media apps. AR Hardware comprises AR headsets and glasses. AR Software is divided into three different application types, namely social media, gaming, and eCommerce applications, which can be accessed via the most prominent app stores. VR Advertising covers in-game advertising as well as advertising in VR videos. VR Hardware comprises both tethered head-mounted displays (HMDs) and stand-alone HMD headsets. Lastly, VR Software covers VR games and VR videos, which require headsets.

Additional information:

The market comprises revenues, users, average revenue per user, and penetration rates. Revenues are generated through in-app purchases, advertising spending, and consumer spending on apps, games, and hardware such as headsets or glasses. Sales channel data shows both online and offline revenues, which include VAT. The market only displays B2C revenues and users for the above-mentioned markets and markets; B2B and B2G revenues are not included. Additional definitions for each market can be found on the respective market pages.
Market numbers for VR headsets are also featured in the Consumer Market Insights, namely in the Gaming Equipment market of the Consumer Electronics market. Unlike the VR Hardware market in the Advertising & Media Outlook, the Gaming Equipment market also covers smartphone VR devices.
Key players in the market include companies such as Meta (Oculus VR), Microsoft (HoloLens), Snap Inc. with different lenses, and Nvidia, which offers computing hardware components.
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Analyst Opinion

The AR & VR market in Africa has been experiencing significant growth in recent years. Customer preferences for immersive and interactive experiences, coupled with advancements in technology, have contributed to the increasing adoption of AR & VR technologies across the continent.

Customer preferences: African consumers are increasingly seeking immersive and interactive experiences, which has fueled the demand for AR & VR technologies. These technologies offer a unique way to engage with content, whether it be in the gaming, entertainment, or education sectors. With a growing middle class and increasing disposable income, African consumers are more willing to invest in these technologies to enhance their entertainment and educational experiences.

Trends in the market: One of the key trends in the AR & VR market in Africa is the growth of the gaming industry. Gaming has become a popular form of entertainment across the continent, and AR & VR technologies are being integrated into gaming experiences to provide users with a more immersive and realistic gameplay. This trend is expected to continue as gaming becomes more mainstream in Africa. Another trend in the market is the adoption of AR & VR technologies in the education sector. African countries are increasingly recognizing the potential of these technologies to enhance learning experiences and bridge the gap in access to quality education. AR & VR can provide students with virtual field trips, interactive simulations, and personalized learning experiences, making education more engaging and accessible.

Local special circumstances: One of the challenges faced by the AR & VR market in Africa is the lack of infrastructure, particularly in rural areas. Limited access to high-speed internet and electricity can hinder the widespread adoption of these technologies. However, efforts are being made to improve infrastructure and expand connectivity across the continent, which will contribute to the growth of the AR & VR market.

Underlying macroeconomic factors: The growth of the AR & VR market in Africa is also influenced by underlying macroeconomic factors. Economic growth and stability in many African countries have created a conducive environment for businesses to invest in emerging technologies. Additionally, government initiatives and policies aimed at promoting innovation and technology adoption have further supported the growth of the AR & VR market. In conclusion, the AR & VR market in Africa is experiencing significant growth due to customer preferences for immersive experiences, the adoption of these technologies in gaming and education, and supportive macroeconomic factors. While challenges such as limited infrastructure exist, efforts to improve connectivity and expand access to technology are expected to drive the continued growth of the AR & VR market in Africa.

Methodology

Data coverage:

The data encompasses B2C enterprises. Figures are based on the AR & VR market. AR and VR enable consumers to experience a new dimension, using either a headset or installed units, as they combine the real and virtual worlds. Consumer revenue figures refer to revenues relating to AR hardware, AR software, VR hardware, VR software, and spending on AR and VR advertising. Both digital and non-digital revenues are included.

Modeling approach / Market size:

Market sizes are determined through a top-down approach, building on specific predefined factors for each market market. As a basis for evaluating markets, we use annual financial reports of the market-leading companies and industry associations, as well as third-party studies and reports. In addition, we use relevant key market indicators and data from country-specific associations, such as consumer spending, internet penetration, 4G coverage, and historical developments. This data helps us estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the relevant market. For example, the S-curve function and exponential trend smoothing are well suited for forecasting digital products and services due to the non-linear growth of technology adoption. The main drivers are level of digitalization, adoption of technology, GDP per capita, and internet penetration.

Additional notes:

The market is updated twice a year in case market dynamics change. The data is modeled using current exchange rates. The impact of the COVID-19 pandemic and the Russia-Ukraine war are considered at a country-specific level. In some cases, the data is updated on an ad hoc basis (e.g., when new, relevant data has been released or significant changes within the market have an impact on the projected development).