AR & VR - Italy

Italy

In Italy, revenue in the AR & VR market market is projected to reach US$1,001.0m in 2024.
Revenue in this sector is expected to exhibit an annual growth rate (CAGR 2024-2029) of 9.35%, leading to a projected market volume of US$1,565.0m by 2029.
The largest market within this market in Italy is VR Hardware, which is anticipated to have a market volume of US$339.6m in 2024.
While most revenue is generated the United States, the AR & VR market market in Italy is also significant.
By 2029, the number of users in Italy is expected to reach 40.5m users.
User penetration in Italy will be 66.4% in 2024 and is projected to increase to 70.2% by 2029.
Furthermore, the average revenue per user (ARPU) in Italy is expected to amount to US$25.7.
Italy is experiencing a burgeoning interest in AR and VR technologies, particularly in the fashion and design sectors, enhancing immersive consumer 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 Italy has been experiencing significant growth in recent years, driven by customer preferences for immersive and interactive experiences, as well as advancements in technology.

Customer preferences: Italian consumers have shown a strong interest in AR & VR technologies, seeking out innovative and engaging experiences. This demand is fueled by the desire for interactive entertainment, virtual travel experiences, and immersive gaming. Additionally, the adoption of AR & VR in industries such as healthcare, education, and retail has also contributed to the growing interest among customers.

Trends in the market: One of the key trends in the AR & VR market in Italy is the increasing use of these technologies in the tourism industry. Virtual reality tours and experiences allow travelers to explore destinations and attractions before making a booking, enhancing their decision-making process. This trend is particularly relevant in a country like Italy, known for its rich cultural heritage and popular tourist destinations. Another trend in the market is the integration of AR & VR in the retail sector. Italian consumers are increasingly using augmented reality to try on products virtually, such as clothing and accessories, before making a purchase. This technology not only enhances the shopping experience but also reduces the need for physical try-ons, making it more convenient for customers.

Local special circumstances: Italy's strong cultural heritage and tourism industry provide a unique opportunity for the AR & VR market. The country's historical sites, museums, and art galleries can be brought to life through augmented and virtual reality, offering visitors a more immersive and educational experience. This integration of technology with cultural heritage has the potential to attract both domestic and international tourists.

Underlying macroeconomic factors: Italy's growing AR & VR market can also be attributed to favorable macroeconomic factors. The country has witnessed an increase in disposable income, which has led to higher consumer spending on entertainment and leisure activities. Additionally, advancements in technology and the availability of affordable AR & VR devices have made these experiences more accessible to a wider audience. In conclusion, the AR & VR market in Italy is experiencing growth due to customer preferences for immersive experiences, particularly in the tourism and retail sectors. The integration of AR & VR technologies in these industries has the potential to enhance customer engagement and drive sales. Furthermore, Italy's cultural heritage and favorable macroeconomic factors contribute to the market's growth potential.

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).