AR & VR - Malaysia

Malaysia

In Malaysia, revenue in the AR & VR market market is projected to reach US$107.7m in 2024.
Revenue is expected to demonstrate an annual growth rate (CAGR 2024-2029) of 9.14%, leading to a projected market volume of US$166.8m by 2029.
The largest market within this market in Malaysia is VR Hardware, which is anticipated to have a market volume of US$30.4m in 2024.
While most revenue in the AR & VR market market is generated the United States, in Malaysia is also witnessing significant growth, with a projected market volume of US$10,900.0m in 2024.
In Malaysia, the number of users in the AR & VR market market is expected to reach 18.9m users by 2029.
User penetration in Malaysia will be 52.8% in 2024 and is anticipated to decrease slightly to 52.0% by 2029.
Furthermore, the average revenue per user (ARPU) in the Malaysian market is expected to amount to US$5.9.
Malaysia is witnessing a surge in AR and VR adoption within the educational sector, enhancing immersive learning experiences for students across the nation.

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 Malaysia is experiencing significant growth and development, driven by customer preferences for immersive and interactive experiences, as well as advancements in technology.

Customer preferences: Customers in Malaysia are increasingly seeking immersive and interactive experiences, which has fueled the demand for AR & VR technology. The younger generation, in particular, is drawn to the novelty and excitement of virtual reality, while businesses are recognizing the potential of augmented reality for enhancing customer engagement and improving productivity.

Trends in the market: One of the key trends in the AR & VR market in Malaysia is the adoption of virtual reality in the gaming and entertainment industry. Virtual reality gaming has gained popularity among Malaysian consumers, with the availability of VR headsets and gaming consoles. The demand for VR gaming experiences has led to the establishment of VR arcades and gaming centers across the country. Another trend in the market is the integration of augmented reality in retail and e-commerce. Malaysian consumers are increasingly using augmented reality apps to visualize products before making a purchase. This technology allows customers to try on virtual clothing or place virtual furniture in their homes, enhancing the online shopping experience.

Local special circumstances: Malaysia's diverse cultural heritage and tourism industry have contributed to the growth of the AR & VR market. AR technology is being used to enhance cultural and historical sites, providing visitors with interactive and educational experiences. Additionally, the tourism industry is leveraging VR technology to promote destinations and attract international travelers.

Underlying macroeconomic factors: The Malaysian government has recognized the potential of AR & VR technology and has implemented initiatives to support its growth. The Digital Malaysia initiative, for example, aims to transform Malaysia into a digital economy and has allocated funds for the development of AR & VR technologies. Additionally, the government has provided tax incentives for companies investing in AR & VR, encouraging innovation and investment in the sector. Overall, the AR & VR market in Malaysia is experiencing rapid growth due to customer preferences for immersive experiences, the adoption of VR in gaming and entertainment, the integration of AR in retail and e-commerce, and the support of the government. As technology continues to advance and consumer demand increases, the AR & VR market in Malaysia 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).