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The virtual reality market size is projected to increase by USD 64.72 billion at a CAGR of 28.3% between 2023 and 2028. Market growth is driven by the increased affordability of VR gear, technological advancements related to VR in gaming, and economies of scale. VR encompasses immersive environments for applications in sectors like real estate, entertainment, and sports. The rise of the metaverse is expected to further enhance VR applications, providing interconnected virtual spaces for diverse uses. However, potential learning quality dilution in virtual isolation is a concern, prompting companies to develop collaborative learning platforms.
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The proliferation of VR technology and artificial intelligence, including devices like gesture-tracking devices (GTD) and head mounted display (HMD), across semi & fully immersive, non-immersive, and commercial segments underscores the transformative potential of this technology. In this landscape, platforms like PropVR, Quest 2, Unity Virtual Reality Development Software, and REAL Immersive System are pivotal, reshaping industries and organizational strategies alike.
The VR market research report provides comprehensive data (region wise segment analysis), with forecasts and estimates in "USD Billion" for the period 2024-2028, as well as historical data from 2018 - 2022 for the following segments.
The enterprise segment is estimated to witness significant growth during the forecast period. This can be referred to as an artificial environment created with software and presented to users in such a way that they perceive it as a natural environment. In addition, it does not interact with the real world. It creates a whole new virtual experience that mimics real-life experiences, usually via a headset.
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The enterprise segment was the largest segment and was valued at USD 5.07 billion in 2018. Moreover, technological advances in the hardware of this segment are likely to increase the adoption of the products among users. For example, in May 2021, HTC Vive launched two VR headsets and pro tools for enterprises. Therefore, such new product launches in this hardware segment are likely to fuel the growth of this segment. Furthermore, the number of users for the content is increasing, owing to the high adoption of this technology in the gaming, entertainment, retail, sports, and travel industries. Hence, such factors are fuelling the segment, which in turn will drive the market during the forecast period.
The increasing product launches will fuel the hardware segment, which in turn will increase the market. The hardware comprises tethered head-mounted displays (HMDs), standalone HMDs, and screenless viewers. In addition, these are used in various industries, such as gaming, healthcare, entertainment, education, and others. Moreover, educators are increasingly utilizing technology to deliver a higher quality of teaching in several educational fields. Furthermore, technology offers students a more visually appealing and interesting lesson that can be provided at a lower cost. In addition, high visual fidelity and improved trackers are added in VR. Hence, these factors are fuelling the growth of this segment, which in turn will drive the market growth during the forecast period.
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North America is estimated to contribute 35% 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. The market in North America is fueled by factors including the presence of key companies, growing investments in this technology from key companies, the rising adoption of technologically advanced applications among consumers, and substantial research activities to increase the application of technologies are driving the market in the region.
In addition, the US and Canada are the leading contributors to the regional market. Moreover, the presence of key players in the region is likely to drive the growth of the market in North America. For instance, several companies have established a strong presence in the US and are heavily investing in this technology. Hence, these factors are driving the market in North America during the forecast period.
The VR market is driven by the increased affordability of VR gear, previously a substantial barrier to market expansion, now mitigated by technological advancements and economies of scale. Premium-priced VR headsets have seen reductions, complemented by cardboard and VR-compatible smartphones, contributing to price declines. Social VR spaces are on the rise, although concerns persist regarding learning quality in virtual isolation. Companies are innovating collaborative learning platforms to address this challenge. However, standardized hardware and software frameworks remain lacking, hindering seamless technology integration and widespread adoption across industries, exacerbated by hardware fragmentation and interoperability issues.
Overcoming these challenges is imperative for unlocking the market's full potential and ensuring sustained growth. Within this landscape, VR technology is reshaping industries such as healthcare, gaming, automotive, and entertainment, with VR simulators and virtual theme parks offering immersive experiences. AI applications are increasingly integrated into VR environments, shaping a three-dimensional world poised for the metaverse.
One of the key factors driving the market is the increased affordability of VR gear. Earlier, these hardware products were extremely expensive to purchase, which was a major barrier to the expansion of the market. However, due to the recent developments in technology and the economies of scale possessed by major companies, the cost of this gear has been reduced by a significant figure.
Moreover, many companies providing VR headgear at premium prices have cut their prices and developed commercial versions of the headset. In addition, the advent of this cardboard and VR gear compatible with smartphones is the major factor contributing to the decline in prices. Hence, these factors are positively impacting the market which in turn drives VR market growth during the forecast period.
A key factor shaping the market is the increasing number of social VR spaces. In a virtual environment, users are isolated from the real physical world which has the possibility of bringing down the quality of learning, as collaborative learning plays an effective role in effective and efficient learning. Therefore, to overcome this challenge, many companies are providing platforms that enable collaborative learning in this environment. Hence, these factors are positively impacting VR market growth during the forecast period.
The lack of standardized hardware and software frameworks is one of the key challenges hindering the market. The absence of standardized hardware and software frameworks has harmed the global market, hampering the seamless development, integration, and widespread adoption of technologies across various industries. In addition, this lack of standardization has resulted in challenges related to interoperability, compatibility, and development complexity, stifling the potential and expansion of the market.
Moreover, in the domain of hardware, the absence of standardized specifications of devices has led to fragmentation and interoperability issues. Furthermore, manufacturers of VR headsets and peripherals often utilize disparate specifications and technologies, leading to a lack of uniformity and compatibility between devices. For instance, different VR headset models may incorporate diverse move motion controller or display resolutions, thereby complicating the creation of content that can seamlessly cater to a wide array of devices, which are hindering VR market growth during the forecast period.
The VR market forecast includes the adoption lifecycle of the market research and growth, covering from the innovator's stage to the laggard's stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the VR market analysis and report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth and trends strategies.
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VR Market Customer Landscape
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.
Baidu Inc: The company offers virtual reality VR headset called QIYU 3, under its subsidiary called iQIYI Inc.
DPVR: The company offers DPVR E4 PC virtual reality gaming headset.
Lenovo Group Ltd: The company offers HTC Vive headset.
The VR market growth and forecasting report also includes detailed analyses of the competitive landscape of the market and information about 20 market companies, including:
The virtual reality market forecast report of 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.
The VR market is experiencing rapid growth across various sectors. The three-dimensional environment created by VR glasses, VR gloves, and VR bodysuits are revolutionizing industries such as gaming, entertainment, and instructional training. From training pilots and defense personnel to educating technicians in the automotive industry, it is reshaping how skills are acquired. In the healthcare industry, VR is being used for VR exposure therapy to address mental health issues. Virtual platforms facilitate meetings and enable policies & strategies to be discussed remotely. Event organizers utilize VR for immersive experiences, while the architecture and planning sectors employ it for visualization.
Real-estate agencies utilize VR for virtual property tours, while the entertainment and sports industries leverage it for live virtual entertainment experiences. Major players incorporate head-mounted display (HMD) devices and gesture-tracking devices (GTD) for semi and fully immersive experiences. Amidst the coronavirus outbreak, VR provides a safe alternative for live events. In the 3D virtual world, the use of VR is expanding across organizations and sectors, promising a dynamic future. Multiexperience development platforms are increasingly integrating VR to create immersive, interactive applications that enhance user experiences across various digital environments and devices.
The VR market is expanding rapidly, with significant advancements across various sectors and segments. In the architecture sector, it offers immersive virtual tours that revolutionize the planning sector, allowing for better visualization and design processes. The market includes semi & fully immersive segment as well as a non-immersive segment, catering to diverse user preferences and requirements. The commercial segment is particularly vibrant, encompassing VR arcades, VR fitness, and VR therapy, which provide engaging and therapeutic experiences. Moreover, the software segment is crucial, driving innovations in VR content creation and simulation training. Augmented reality (AR) is also gaining traction, enhancing virtual classrooms and VR storytelling. Businesses benefit from VR collaboration tools, enabling remote teams to work together seamlessly. As VR technology continues to evolve, its applications across the architecture sector, planning sector, and various commercial uses highlight its transformative impact on industries worldwide.
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Market Scope |
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Report Coverage |
Details |
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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 28.3% |
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Market Growth 2024-2028 |
USD 64.72 billion |
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Market structure |
Fragmented |
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YoY growth 2023-2024(%) |
27.45 |
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Regional analysis |
North America, APAC, Europe, Middle East and Africa, and South America |
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Performing market contribution |
North America at 35% |
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Key countries |
US, China, Japan, Germany, and UK |
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Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks, Virtual Reality Market Industry Report |
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Key companies profiled |
3D Systems Corp., Advanced Micro Devices Inc., Alphabet Inc., Apple Inc., Baidu Inc., DPVR, HTC Corp., Lenovo Group Ltd., Meta Platforms Inc., Microsoft Corp., Osso-VR Inc., Pico Technology Ltd., Samsung Electronics Co. Ltd., Sony Group Corp., StarVR Corp., Unity Software Inc., Valve Corp., Varjo Technologies Oy, Virtuix Inc., and FOVE Inc. |
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Market dynamics |
Parent market analysis, Market forecasting, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and Market condition analysis for the forecast period, Virtual Reality Market Growth Analysis. |
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Customization purview |
If our VR market report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
We can help! Our analysts can customize this VR market forecast report to meet your requirements.
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by End-user
7 Market Segmentation by Component
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
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