AR & VR - United Arab Emirates

United Arab Emirates

In the United Arab Emirates, revenue in the AR & VR market market is projected to reach US$128.7m in 2024.
Revenue in this sector is expected to demonstrate an annual growth rate (CAGR 2024-2029) of 9.67%, culminating in a projected market volume of US$204.2m by 2029.
The dominant market within this market is AR Software, which is anticipated to have a market volume of US$47.1m in 2024.
Although most revenue is generated the United States, it is noteworthy that the UAE is also developing its AR & VR market market.
In the AR & VR market market, the number of users in the United Arab Emirates is expected to reach 6,914.0k users by 2029.
User penetration will stand at 70.0% in 2024 and is projected to decline to 69.6% by 2029.
Additionally, the average revenue per user (ARPU) in the UAE is expected to amount to US$19.2.
The United Arab Emirates is increasingly positioning itself as a hub for AR and VR innovation, attracting global investment and fostering local talent in immersive 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 United Arab Emirates is experiencing significant growth and development, driven by customer preferences, market trends, local special circumstances, and underlying macroeconomic factors.

Customer preferences: Customers in United Arab Emirates are increasingly adopting AR & VR technologies due to their immersive and interactive nature. These technologies provide a unique and engaging experience, allowing users to explore virtual worlds and interact with digital content in real-time. Additionally, customers are attracted to the potential applications of AR & VR in various industries such as gaming, entertainment, healthcare, and education. The demand for AR & VR devices and content is also driven by the growing popularity of social media platforms, where users can share their virtual experiences with others.

Trends in the market: The AR & VR market in United Arab Emirates is witnessing several trends that are shaping its growth. Firstly, there is a rising demand for AR & VR headsets, both tethered and standalone, as they offer a more immersive experience compared to mobile-based AR & VR applications. This trend is driven by advancements in hardware technology, such as higher display resolutions and improved motion tracking capabilities. Secondly, there is a growing focus on developing AR & VR content and applications that cater to the local market. This includes creating content in Arabic language and incorporating local cultural elements to enhance the user experience. Thirdly, there is an increasing collaboration between AR & VR developers and industry-specific companies, such as healthcare providers and educational institutions, to create customized solutions that address specific needs and challenges.

Local special circumstances: United Arab Emirates has a strong focus on technological innovation and digital transformation, which creates a favorable environment for the growth of the AR & VR market. The government has launched initiatives such as the Dubai 3D Printing Strategy and the UAE Artificial Intelligence Strategy, which aim to promote the adoption of emerging technologies, including AR & VR. Additionally, the country has a high smartphone penetration rate and a tech-savvy population, which provides a solid foundation for the adoption of AR & VR technologies. Furthermore, United Arab Emirates is a popular tourist destination, and AR & VR can be used to enhance the visitor experience by providing virtual tours, interactive guides, and immersive entertainment options.

Underlying macroeconomic factors: The growth of the AR & VR market in United Arab Emirates is also influenced by underlying macroeconomic factors. The country has a strong economy with a high per capita income, which enables consumers to invest in AR & VR devices and content. Additionally, the government's focus on diversifying the economy and reducing reliance on oil has led to increased investments in sectors such as technology and innovation. This has created opportunities for AR & VR companies to expand their operations and cater to the growing demand in the market. Furthermore, United Arab Emirates has a favorable business environment with supportive regulations and incentives for technology companies, which encourages both local and international players to invest in the AR & VR market. In conclusion, the AR & VR market in United Arab Emirates is experiencing significant growth and development due to customer preferences, market trends, local special circumstances, and underlying macroeconomic factors. The adoption of AR & VR technologies is driven by their immersive and interactive nature, as well as their potential applications in various industries. The market is witnessing trends such as the demand for advanced headsets, the development of localized content, and collaboration between developers and industry-specific companies. United Arab Emirates' focus on technological innovation, high smartphone penetration rate, and favorable business environment further contribute to the growth of the AR & VR market.

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).