AR & VR - GCC

In the GCC, revenue in the AR & VR market market is projected to reach US$290.7m in 2024.
Revenue is expected to show an annual growth rate (CAGR 2024-2029) of 9.58%, resulting in a projected market volume of US$459.3m by 2029.
The largest market within this market in the GCC is AR Software, with a market volume of US$96.6m in 2024.
Most revenue is generated the United States, which has a projected market volume of US$10,900.0m in 2024.
In the AR & VR market market, the number of users in the GCC is expected to amount to 31.4m users by 2029.
User penetration in the GCC will be 59.7% in 2024 and is expected to hit 59.6% by 2029.
The average revenue per user (ARPU) in the GCC is expected to amount to US$9.8.
The GCC region is witnessing a surge in AR and VR adoption, driven by increased investments in digital infrastructure and a growing demand for 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 GCC has been experiencing significant growth in recent years, driven by customer preferences for immersive and interactive experiences, as well as the increasing adoption of these technologies across various industries.

Customer preferences: Customers in the GCC region are increasingly seeking immersive and interactive experiences, which has led to a growing demand for AR & VR technologies. These technologies allow users to engage with content in a more immersive way, whether it's through virtual reality headsets or augmented reality applications on their smartphones. The ability to explore virtual environments, interact with virtual objects, and even try out products virtually has become highly appealing to customers in the region.

Trends in the market: One of the key trends in the AR & VR market in GCC is the adoption of these technologies in the gaming and entertainment industry. Virtual reality gaming experiences have gained popularity among consumers, with a growing number of gaming arcades and entertainment centers offering VR gaming experiences. Additionally, the use of AR technology in live events, such as concerts and exhibitions, has enhanced the overall experience for attendees. Another significant trend is the integration of AR & VR technologies in the education and training sector. Virtual reality simulations and augmented reality applications are being used to create immersive learning experiences, allowing students and professionals to visualize complex concepts and scenarios. This trend is driven by the recognition of the potential of these technologies to enhance learning outcomes and improve engagement.

Local special circumstances: The GCC region is known for its focus on innovation and technology adoption. Countries like the United Arab Emirates and Saudi Arabia have invested heavily in building smart cities and fostering technological advancements. This focus on innovation has created a conducive environment for the growth of the AR & VR market in the region. Furthermore, the presence of a young and tech-savvy population in the GCC has contributed to the increasing demand for AR & VR technologies.

Underlying macroeconomic factors: The strong economic growth in the GCC region has played a significant role in the development of the AR & VR market. As economies diversify and move away from oil-dependent industries, there is a greater emphasis on technology and innovation. This has led to increased investments in the AR & VR sector, both from government initiatives and private sector players. Additionally, the region's high disposable income levels and willingness to adopt new technologies have further fueled the growth of the market. In conclusion, the AR & VR market in the GCC region is experiencing rapid growth due to customer preferences for immersive experiences, the adoption of these technologies across various industries, and the region's focus on innovation and technological advancements. With the continued support from governments and increasing investments in the sector, the AR & VR market in GCC is expected to further expand in the coming years.

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).