AR & VR - Latvia

Latvia

In Latvia, revenue in the AR & VR market market is projected to reach US$19.7m in 2024.
This revenue is expected to demonstrate an annual growth rate (CAGR 2024-2029) of 9.50%, leading to a projected market volume of US$31.0m by 2029.
The largest market within this market in Latvia is AR Software, which is anticipated to have a market volume of US$6.5m in 2024.
While most revenue is generated the United States with a projected market volume of US$10,900.0m in 2024, in Latvia is also expected to experience growth.
In the AR & VR market market, the number of users in Latvia is anticipated to amount to 1,137.0k users by 2029.
User penetration in Latvia will be 62.3% in 2024 and is expected to reach 66.2% by 2029.
The average revenue per user (ARPU) in Latvia is expected to amount to US$17.5.
Latvia's burgeoning AR and VR market is increasingly influenced by its tech-savvy youth, driving innovative applications in education and entertainment sectors.

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 Latvia is experiencing significant growth and development, driven by customer preferences, market trends, local special circumstances, and underlying macroeconomic factors. Customer preferences in Latvia are shifting towards immersive and interactive experiences, which has fueled the demand for AR & VR technologies.

Consumers are increasingly seeking innovative and engaging ways to interact with products and services, and AR & VR offer unique opportunities to enhance user experiences. This shift in customer preferences is not unique to Latvia, but is a global trend that is driving the growth of the AR & VR market worldwide. Trends in the AR & VR market in Latvia are closely aligned with global trends.

One major trend is the increasing adoption of AR & VR in various industries, including gaming, entertainment, education, healthcare, and retail. Companies in these industries are leveraging AR & VR technologies to create immersive and interactive experiences for their customers. Additionally, there is a growing focus on the development of AR & VR content and applications, as well as the improvement of hardware and software capabilities.

These trends are driving the growth of the AR & VR market in Latvia, as businesses and consumers recognize the potential of these technologies. Local special circumstances in Latvia also contribute to the development of the AR & VR market. The country has a strong and innovative technology sector, with a number of startups and established companies specializing in AR & VR.

This creates a favorable environment for the growth and adoption of AR & VR technologies. Additionally, Latvia has a highly skilled workforce, with expertise in software development and design, which supports the development and implementation of AR & VR solutions. Underlying macroeconomic factors in Latvia, such as economic stability and government support, also play a role in the development of the AR & VR market.

The country has experienced steady economic growth in recent years, which has created a favorable business environment for companies operating in the AR & VR sector. Additionally, the Latvian government has recognized the potential of AR & VR technologies and has implemented policies to support their development and adoption. This includes providing funding and resources for research and development, as well as promoting collaboration between industry players and educational institutions.

In conclusion, the AR & VR market in Latvia is experiencing growth and development due to customer preferences, market trends, local special circumstances, and underlying macroeconomic factors. The shift towards immersive and interactive experiences, the increasing adoption of AR & VR in various industries, the presence of a strong technology sector, and government support all contribute to the growth of the AR & VR market in Latvia.

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).