AR & VR - Worldwide

Worldwide

Revenue in the AR & VR market market worldwide is projected to reach €37.4bn in 2024.
Revenue is expected to exhibit an annual growth rate (CAGR 2024-2029) of 9.20%, leading to a projected market volume of €58.1bn by 2029.
The largest market within this market is AR Software, which will have a market volume of €12.0bn in 2024.
The United States is anticipated to generate the most revenue, with a projected market volume of €10,110.0m in 2024.
By 2029, the number of users in the AR & VR market market worldwide is expected to reach 3,728.0m users.
User penetration is projected to be 52.8% in 2024, increasing to 56.5% by 2029.
The average revenue per user (ARPU) is expected to be €11.0.
The revenue figures presented here account solely for B2C revenues, indicating that 55.0% of the total market (B2C & B2B) is covered by the displayed market share of B2C.
Worldwide, the AR & VR market is experiencing a surge in demand, driven by advancements in immersive technology and increased investment in digital experiences across various 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 Worldwide is experiencing significant growth and development, driven by customer preferences for immersive and interactive experiences, as well as advancements in technology.

Customer preferences: Customers are increasingly seeking immersive and interactive experiences, and AR & VR technologies offer a unique way to fulfill these preferences. AR allows users to overlay digital content onto the real world, enhancing their environment and providing interactive experiences. VR, on the other hand, creates a completely virtual environment that users can explore and interact with. These technologies are particularly popular in the gaming and entertainment industries, where customers are looking for new and exciting ways to engage with content. Additionally, AR & VR are being adopted in industries such as healthcare, education, and retail, where they offer innovative solutions and enhance customer experiences.

Trends in the market: The AR & VR market in Worldwide is witnessing several key trends. Firstly, there is a growing demand for standalone devices that do not require a connection to a PC or console. Standalone headsets offer greater mobility and convenience, allowing users to experience AR & VR anywhere, anytime. Secondly, there is a focus on improving the visual and audio quality of AR & VR experiences. Higher resolution displays, improved graphics processing, and spatial audio technologies are being developed to provide more realistic and immersive experiences. Finally, there is an increasing emphasis on social and collaborative AR & VR experiences. Multiplayer games and shared virtual spaces are becoming more popular, enabling users to interact with others in virtual environments.

Local special circumstances: In Worldwide, the AR & VR market is influenced by local special circumstances. For example, the market is driven by the presence of major technology companies that are investing heavily in AR & VR research and development. These companies are driving innovation and pushing the boundaries of what is possible with these technologies. Additionally, the market is also shaped by cultural factors and consumer behavior. In some countries, there may be a greater acceptance and adoption of AR & VR technologies, while in others, there may be more resistance or skepticism.

Underlying macroeconomic factors: The growth of the AR & VR market in Worldwide is also influenced by underlying macroeconomic factors. Technological advancements and declining costs of hardware are making AR & VR more accessible to a wider range of customers. Additionally, the increasing availability of high-speed internet and the proliferation of smartphones are creating a conducive environment for the adoption of AR & VR. Furthermore, the COVID-19 pandemic has accelerated the adoption of AR & VR technologies, as they offer remote collaboration and virtual experiences that can replace in-person interactions. As a result, businesses and individuals are increasingly turning to these technologies to stay connected and engaged.

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).