AR & VR - MENA

MENA

Revenue in the AR & VR market market in the MENA region is projected to reach US$816.3m in 2024.
Revenue in this region is expected to show an annual growth rate (CAGR 2024-2029) of 9.60%, resulting in a projected market volume of US$1,291.0m by 2029.
The largest market within the AR & VR market market in MENA is AR Software, which is anticipated to have a market volume of US$277.3m in 2024.
With a projected market volume of US$10,900.0m in 2024, the majority of revenue is generated the United States, highlighting the significant difference in market dynamics compared to in the Middle East and North Africa.
In the AR & VR market market, the number of users in MENA is expected to amount to 179.4m users by 2029.
User penetration in the MENA region will be 47.4% in 2024 and is expected to rise to 49.3% by 2029.
The average revenue per user (ARPU) in MENA is expected to amount to US$5.0.
The MENA region is experiencing a surge in AR and VR adoption, driven by increased investments in entertainment and education technologies.

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 MENA 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 in various industries.

Customer preferences: Customers in the MENA region have shown a strong interest in AR & VR technologies, as they provide a unique and captivating way to experience digital content. The ability to explore virtual worlds, interact with virtual objects, and engage in immersive storytelling has resonated with consumers, particularly in the entertainment, gaming, and tourism sectors. Additionally, the younger population in the region, who are more tech-savvy and open to new experiences, has been a key driver of the AR & VR market.

Trends in the market: One of the notable trends in the AR & VR market in MENA is the increasing adoption of these technologies in the healthcare sector. Virtual reality has been used for medical training, allowing healthcare professionals to practice complex procedures in a safe and controlled environment. Augmented reality, on the other hand, has been utilized for surgical navigation, enabling surgeons to overlay digital information onto the patient's body during operations. These applications have not only improved the quality of healthcare delivery but also enhanced patient outcomes. Another trend in the market is the integration of AR & VR technologies in the education sector. Virtual reality has been used to create immersive learning experiences, allowing students to explore historical sites, visit museums, and even travel to different countries without leaving the classroom. Augmented reality, on the other hand, has been utilized to enhance textbooks and educational materials, providing interactive and engaging content for students. These applications have transformed the way education is delivered in the region, making it more interactive and experiential.

Local special circumstances: The MENA region is known for its rich cultural heritage and historical landmarks. This has created a unique opportunity for the AR & VR market, as these technologies can be used to preserve and showcase the region's heritage in a digital format. Virtual reality has been used to recreate ancient sites and monuments, allowing visitors to experience them as they were in the past. Augmented reality, on the other hand, has been utilized to provide interactive tours and information about historical landmarks. These applications have not only promoted tourism in the region but also contributed to the preservation of cultural heritage.

Underlying macroeconomic factors: The growing AR & VR market in MENA can be attributed to several underlying macroeconomic factors. The region has been witnessing rapid urbanization and technological advancements, which have created a conducive environment for the adoption of AR & VR technologies. Additionally, governments in the region have been actively promoting innovation and digital transformation, providing support and incentives for companies operating in the AR & VR space. Furthermore, the increasing disposable income and changing consumer preferences have fueled the demand for immersive and interactive experiences, driving the growth of the AR & VR market in MENA.

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).