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The global virtual reality (VR) in gaming market size is estimated to grow by USD 36.15 billion, at a CAGR of 38.19% between 2023 and 2028. Market expansion hinges on various factors, including the rising embrace of VR in interactive home entertainment, the advent of digital downloading on gaming consoles, and the surge in the adoption of AR games. This market is experiencing exponential growth, driven by the increasing integration of immersive technology into home entertainment. Key drivers include the widespread use of VR headsets and associated accessories like motion controllers, which enhance user engagement and immersion. As these trends continue to gain momentum, they fuel the evolution of the market, catering to the growing demand for immersive and interactive experiences in entertainment.
The market forecast report forecasts includes detailed analyses of the competitive landscape of the market and information about 15 market companies, including:
Advanced Micro Devices Inc., Alphabet Inc., bHaptics Inc., Carl Zeiss AG, Electronic Arts Inc., Fallen Planet Studios Ltd, Magic Leap Inc., Meta Platforms Inc., Microsoft Corp., Nintendo Co. Ltd., NVIDIA Corp., Qualcomm Inc., Razer Inc., Samsung Electronics Co. Ltd., Sony Group Corp., Ubisoft Entertainment SA, Unity Technologies Inc., Virtuix Inc., and Wookey Technologies Inc.
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Despite setbacks due to the pandemic, the market is poised to rebound to pre-pandemic levels, driven by advancements in VR hardware and accessories and the rollout of 5G technology. With innovations like the upcoming PlayStation VR2 and HTC Vive, both established players and small and start-up companies are capitalizing on the growing demand for immersive gaming experiences. As the worldwide economy recovers, investors are showing renewed interest in the gaming industry, fueling growth in VR accessories such as bodysuits and gloves. AR and VR games are gaining traction, offering players a 3D environment with interactive graphics and motion tracking. Platforms like HTC Viveport and Plink cater to game designers and mobile virtual reality gaming, expanding the market's reach. Collaborations with tech giants and innovative startups like NewGenApps and 3Dinsider are driving the evolution of VR gaming, promising exciting possibilities for gamers worldwide. Our researchers analyzed the data with 2023 as the base year, along with the market trends and analysis, drivers and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
The market is experiencing exponential growth, fueled by the increasing adoption of immersive technology in home entertainment. Key drivers include the widespread use of VR headsets and accessories like motion controllers, which enhance user engagement and immersion. Major players like Facebook are focusing on producing advanced VR head-mounted displays (HMDs) such as Oculus Rift, while consoles like Sony PlayStation VR integrate seamlessly with these devices.
Further, innovations like Oculus Touch controllers offer precise hand tracking and gesture control, enhancing the VR gaming experience alongside advancements in gaming headsets. This surge in VR adoption is not only attracting investors and entrepreneurs but also spurring development in content creation tools and competitive edge within the industry. Events such as UTSA's Accessibility VR Game Jam underscore the commitment to inclusive gaming experiences, promoting accessibility and diversity in VR gaming. As consumer spending capacity expands, novel sources of entertainment emerge, ensuring a dynamic and promising future for VR gaming. The integration of advanced gaming headsets plays a crucial role in delivering immersive audio and communication capabilities, essential for creating fully engaging virtual worlds and enhancing the overall user experience in VR environments.
The growing popularity of 360-degree content is a key trend boosting the growth of the market. The progress of technology in the global VR content market has resulted in the emergence of VR and 360-degree videos, following the advancements in 3D, 4D, and 5D content. VR, a recent innovation in the entertainment industry, is gradually expanding into various digital domains. By 2020, the VR content market had become a prominent platform for gaming, leading to a transformation of the digital landscape.
Moreover, major companies like Facebook, Sony, and HTC have introduced their VR devices, with Facebook Inc. launching the Oculus Quest 2, a next-generation virtual reality headset, in September 2020. The market is expected to witness the introduction of more VR devices from these companies and others in the future. Combining VR games with 360-degree content can provide gamers with the ultimate gaming experience. By wearing a VR headset, players can change their viewing angles by moving their necks, enhancing immersion. The market is expected to grow significantly as there is a growing demand for immersive environments in gaming during the forecast period.
Privacy concerns over gamers information is a key challenge hindering the market growth. Vendors in the global digital game market track cookies to gather information about gamers. Gamers block such activities of gaming vendors or uninstall gaming applications from their mobile devices. This has led to a loss in revenue for vendors and their capability to generate revenue by deploying a freeware model.
Consequently, to overcome such issues, vendors now ask for the prior consent of the gamers before downloading or installing the games on their mobile devices. Nevertheless, gamers would always be conscious about making extensive use of the gaming application because of the fear of allowing vendors to have access to their personal data. Hence, privacy concerns are another challenge that hinders the growth of the global digital game market during the forecast period.
Based on application, the market is segmented into consoles, PCs, and mobile devices. The market share growth of the consoles segment will be significant during the forecast period. The revenue share of the segment is expected to rise with the introduction of different virtual accessories to support console games. In February 2021, Sony announced the next-generation Virtual reality (VR) headset for its best-selling PlayStation 5 home console. The headset will come with an improved field of view and a new controller inspired by the PS5 DualSense. Such type of factors will increase segment growth during the forecast period.
Figure 2: Market by Application
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The consoles segment was valued at USD 2.20 billion in 2018. Game developers are creating content compatible with VR hardware. These games should not be an extension of an existing popular gaming franchise and must have a different storyline to go with the hardware. For instance, Batman: Arkham Knight is being developed for VR, but it will have a completely different storyline compared to the storyline in television consoles. An increasing number of game developers are expected to launch VR-specific gaming content during the forecast period.
Market Share by Region
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APAC is estimated to contribute 46% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period. One of the major factors supporting the growth of the VR gaming market in APAC is the presence of a large number of local and global players that develop VR software and hardware. BaoFeng MoJing, one of the major players in China, is developing advanced VR hardware. The company is partnering with indie VR developers to create and distribute 26 VR games. Tinashe Media, a local vendor in China, is developing a VR multiplayer adventure game for HTC VIVE, Oculus Rift, and Project Morpheus using the UE4 engine. South Korea and Japan experienced an increased adoption of VR technology and VR content during the forecast period.
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
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While facing a temporary sales decline during lockdowns, the market is reinvigorated by advancements in cloud gaming technology and immersive technology investments. Leading players like Huawei Technologies are driving innovation with advanced gaming consoles and optical gaming devices. Concerns regarding adverse health effects, such as locomotion sickness and impacts on mental health, are being addressed through improved technology and awareness campaigns. Market segments, including console/PC, standalone, and smartphone, witness growth, bolstered by releases like the Switch OLED model and Samsung Gear VR. Companies like Sony Corporation and Oculus VR are pioneers in VR hardware and software, while emerging technologies like 5G promise to revolutionize the gaming experience. As the industry evolves, VR in gaming remains at the forefront of entertainment, offering immersive experiences for players worldwide.
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Market Scope |
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Report Coverage |
Details |
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Page number |
173 |
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Base year |
2023 |
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Historic period |
2018-2022 |
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Forecast period |
2024-2028 |
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Growth momentum & CAGR |
Accelerate at a CAGR of 38.19% |
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Market Growth 2024-2028 |
USD 36.15 billion |
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Market structure |
Fragmented |
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YoY growth 2023-2024(%) |
27.8 |
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Regional analysis |
APAC, North America, Europe, Middle East and Africa, and South America |
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Performing market contribution |
APAC at 46% |
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Key countries |
US, China, Germany, Japan, and UK |
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Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
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Key companies profiled |
Advanced Micro Devices Inc., Alphabet Inc., bHaptics Inc., Carl Zeiss AG, Electronic Arts Inc., Fallen Planet Studios Ltd, HTC Corp., Magic Leap Inc., Meta Platforms Inc., Microsoft Corp., Nintendo Co. Ltd., NVIDIA Corp., Qualcomm Inc., Razer Inc., Samsung Electronics Co. Ltd., Sony Group Corp., Ubisoft Entertainment SA, Unity Technologies Inc., Virtuix Inc., and Wookey Technologies Inc. |
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Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for the forecast period. |
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Customization purview |
If our market research and growth report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Application
7 Market Segmentation by Component
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Opportunity/Restraints
11 Competitive Landscape
12 Competitive Analysis
13 Appendix
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