Gaming and Healthcare Sectors Propel AR and VR Industry Growth to USD 210.4 Billion

 In 2023, the augmented reality (AR) and virtual reality (VR) industry generated a substantial revenue of USD 47.6 billion. This market is expected to grow at a remarkable compound annual growth rate (CAGR) of 23.7% over the forecast period, reaching USD 210.4 billion by the decade's end. The rapid adoption of AR and VR technologies across sectors such as gaming, entertainment, education, tourism, retail, and healthcare is driving this growth.


Wearable AR and VR devices, such as smart glasses, head-up displays (HUDs), and head-mounted displays (HMDs), offer users the convenience of mobility, allowing them to carry out daily activities seamlessly. For instance, AR displays can be used anywhere without obstructing real-world views, while mobile VR headsets can enhance experiences by limiting movement within virtual environments (VEs).

The designs of these devices continue to evolve, making them compatible with smartphones and tablets. This has led to the widespread integration of AR and VR applications across various industries, as companies explore the possibilities of these technologies. Additionally, extended reality (XR) systems are on the brink of becoming widely accessible, thanks to the growing popularity of smartphones and tablets. As global smartphone sales surge, these devices are becoming a promising platform for the AR and VR industry.

Key Insights:

  • AR technology is anticipated to grow at a 23.9% CAGR, holding the largest market share during the forecast period.
  • In 2023, the hardware segment accounted for 70% of the market share, driven by declining device costs and strong demand from the gaming industry.
  • HMDs dominated the AR device market in 2023 with a 75% revenue share, propelled by lightweight displays and technological advancements.
  • HMDs also led the VR devices market with a 70% share in 2023, particularly in the gaming and tourism sectors.
  • Gesture-tracking devices are expected to witness the fastest growth at a 23.8% CAGR, expanding VR adoption in enterprises and education.
  • The hardware segment is projected to generate higher revenue due to increased demand for quality entertainment and advancements in display technology for enterprises.
  • AR device adoption is soaring in the tourism, automotive, gaming, and education sectors.
  • The gaming category is the largest and fastest-growing segment in the VR devices market.
  • Leading companies in this space include Oculus VR, Samsung, Sony, HTC, FOVE, Nintendo, and Electronic Arts.
  • The Asia-Pacific (APAC) region is expected to be the fastest-growing market, with a 24.2% CAGR, driven by investments in the commercial, defense, healthcare, and automotive sectors.
  • North America held the largest market share in 2023, at 50%, supported by significant government investments and the presence of major tech companies like Google, Microsoft, and Apple.

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