AR & VR - Philippines

Philippines

In the Philippines, revenue in the AR & VR market market is projected to reach US$181.6m in 2024.
Revenue is expected to show an annual growth rate (CAGR 2024-2029) of 9.85%, resulting in a projected market volume of US$290.5m by 2029.
The largest market in the Philippines is AR Software, with a market volume of US$57.4m in 2024.
Although most revenue is generated the United States, in the Philippines is anticipated to contribute to the market with a projected market volume of US$10,900.0m in 2024.
In the AR & VR market market, the number of users in the Philippines is expected to amount to 48.4m users by 2029.
User penetration will be 39.2% in 2024 and is expected to hit 37.9% by 2029.
The average revenue per user (ARPU) in the Philippines is expected to amount to US$3.9.
The Philippines is witnessing a surge in AR and VR adoption, driven by the growing interest in immersive gaming 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 the Philippines is experiencing significant growth and development, driven by customer preferences, market trends, local special circumstances, and underlying macroeconomic factors. Customer preferences in the Philippines are shifting towards immersive and interactive experiences, which is fueling the demand for AR & VR technologies.

Consumers are increasingly seeking unique and engaging experiences that go beyond traditional forms of entertainment. AR & VR technologies provide a way for individuals to escape reality and enter virtual worlds, offering a new level of excitement and interactivity. This shift in customer preferences is driving the adoption of AR & VR technologies across various industries, including gaming, entertainment, education, and tourism.

In terms of market trends, the AR & VR market in the Philippines is witnessing a surge in investments and partnerships. Both local and international companies are recognizing the potential of the market and are actively investing in AR & VR startups and technologies. This influx of investments is driving innovation and technological advancements in the industry, leading to the development of more sophisticated and immersive AR & VR experiences.

Additionally, collaborations between content creators, hardware manufacturers, and software developers are resulting in the creation of high-quality AR & VR content and applications. The Philippines also has some unique local special circumstances that are contributing to the growth of the AR & VR market. The country has a young and tech-savvy population, with a high smartphone penetration rate.

This tech-savvy population is eager to embrace new technologies and is driving the demand for AR & VR experiences. Furthermore, the Philippines has a vibrant gaming and entertainment industry, which provides a strong foundation for the adoption of AR & VR technologies. The country's growing middle class is also contributing to the market growth, as they have more disposable income to spend on entertainment and leisure activities.

Underlying macroeconomic factors are also playing a role in the development of the AR & VR market in the Philippines. The country's strong economic growth and increasing disposable income levels are driving consumer spending on entertainment and leisure activities. This, coupled with the government's support for the development of the technology sector, is creating a favorable environment for the growth of the AR & VR market.

Additionally, the Philippines' strategic location and English-speaking population make it an attractive destination for international companies looking to expand their presence in the Southeast Asian market. In conclusion, the AR & VR market in the Philippines is experiencing significant growth and development, driven by customer preferences, market trends, local special circumstances, and underlying macroeconomic factors. The shift towards immersive and interactive experiences, the surge in investments and partnerships, the country's young and tech-savvy population, and the favorable macroeconomic conditions are all contributing to the growth of the market.

As the market continues to evolve, we can expect to see further advancements in AR & VR technologies and a wider adoption of these technologies across various industries in the Philippines.

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).