Augmented and Virtual Reality Market Trends - 2025

Augmented reality is a technology, which uses the existing user’s environment and overlays
the digital or virtual content or information over it to offer immersive digital experience in
real-time environment. Virtual reality is a computer-generated 3D environment, which
completely immerses end users in an artificial world without seeing the real-world.
Augmented reality applications are developed on special 3D programs, which enable
developers to integrate contextual or digital content with the real world in real time. Virtual
reality offers realistic user experience of artificial world in interactive simulated environment.

Increase in penetration of smart phones & connected devices in various application sectors
and development of the gaming industry boosts the augmented and virtual reality market
growth. The global augmented and virtual reality market size was $11.35 billion in 2017,
and the augmented and virtual reality market forecast is projected to reach $571.42 billion
by 2025, growing at a CAGR of 63.3% from 2018 to 2025.

The consumer segment dominated the overall augmented and virtual reality market share in
2017, due to increase in adoption of augmented and virtual reality solutions among
individual users. However, enterprise segment is anticipated to showcase highest growth
rate during the forecast period.
North America dominated the overall market in 2017, due to rapid adoption of new
technology by the masses and presence of several augmented & virtual reality companies.
U.S. is a major contributor to the growth of the augmented and virtual reality market in
North America. However, Asia-Pacific is expected to witness the highest growth rate during
the forecast period, owing to rise in adoption of technologically advanced solutions,
increase in application areas among end-use industries, and surge in penetration of
smartphones in the emerging economies such as China and India.
Segment review

The global augmented and virtual reality market is segmented based on application,
organization size, industry vertical, and region. In terms of application, the market is
bifurcated into consumer and enterprise. On the basis of organization size, it is categorized
into large enterprises and small & medium sized enterprises. By industry vertical, it is
divided into gaming, entertainment & media, aerospace & defense, healthcare, education,
manufacturing, retail, and others. The regions expected to observe major growth in the
augmented and virtual reality market are North America, Europe, Asia-Pacific, and LAMEA.

The key players operating in the global augmented and virtual reality market analysis
include Google Inc., Sony, Magic Leap, Inc., HTC, Microsoft Corporation, Osterhout Design
Group, Facebook, DAQRI, Samsung Electronics Co., Ltd., and Wikitude.

Top impacting factors

Rise in penetration of smartphones & mobile gaming and increase in adoption of

augmented & virtual reality solutions in education are expected to drive the market growth.
However, lack of effective user experience design and slow growth among underdeveloped
economies are expected to hamper the market growth during the forecast period. On the
contrary, increase in investments in the market is expected to be an augmented and virtual
reality market opportunity.

Cost-efficient benefits of augmented and virtual reality-based solutions

Augmented and virtual reality offers a cost-effective and efficient solution in training and skill
development, as it replicates the real scenarios by using augmented and virtual reality
enabled solutions. For instance, in civil aviation or military application, it is costlier to utilize
an actual aircraft to train a pilot. Furthermore, it could harm humans. Conversely,
augmented and virtual reality solutions create a virtual environment similar to the real world,
where a trainee can understand and tackle challenges with strategic mapping. Moreover, in
healthcare, participation of humans for training of students or nurses or other medical
professionals is unethical and could be harmful. Thus, augmented and virtual reality-based
solutions provide valid tools to train medical professionals without compromising and
harming one’s life.

Expansion of gaming industry

Video game is one of the major applications of augmented and virtual reality technology. In
the past, the number of gamers worldwide has increased at a rapid pace. This is attributed
to increased demand for augmented and virtual reality-based games, thus driving the
market growth.

Advancement of AR/VR technology

Augmented and virtual reality technologies can be used for collaborative seminars,
meetings, public lectures, flight training, military training, training for nurses & medical
professionals, and self-learning process. Furthermore, to introduce enhanced products or
solutions, key players are anticipated to emphasize on product innovation through
continuous investment in product development, which further results in advancement of
AR/VR technology.

Lack of effective user experience design

3D interface design is a complicated and expensive procedure. Moreover, only a few people
are available with the necessary design skills to overcome these issues. Furthermore,
customers are fascinated by the new entertainment possibilities, but do not want to invest in
head-mounted displays (HMDs). Although VR is already available to consumers through
devices such as HTC Vive and Oculus Rift, it is not being recognized globally, as AR/VR
hardware still needs to improvise convenience and control.

Key Benefits for Augmented and Virtual Reality Market:

• This study includes the analytical depiction of the global augmented and virtual
reality market trends and future estimations to determine the imminent investment
pockets.
• The report presents information related to key drivers, restraints, and augmented
and virtual reality market opportunities.
• The current market is quantitatively analyzed from 2017 to 2025 to highlight the
financial competency of the industry.
• Porter’s five forces analysis illustrates the potency of buyers & suppliers in the global
augmented and virtual reality industry.

Key Market Segments

• BY ORGANIZATION SIZE
o Large Enterprises
o Small- & Medium-sized Enterprises
• BY APPLICATION
o Consumer
o Enterprise
• BY INDUSTRY VERTICAL
o Gaming
o Entertainment & Media
o Aerospace & Defense
o Healthcare
o Education
o Manufacturing
o Retail
o Others
• BY REGION
o North America
▪ U.S
▪ Canada
o Europe
 ▪ UK
▪ France
▪ Germany
▪ Russia
▪ Rest of Europe
o Asia-Pacific
▪ China
▪ India
▪ Japan
▪ South Korea
▪ Rest of Asia-Pacific
o LAMEA
▪ Latin America
▪ Middle East
▪ Africa

Key Market Players

• Alphabet (Google Inc.)

• DAQRI
• Facebook
• HTC
• Magic Leap, Inc
• Microsoft Corporation
• OSTERHOUT DESIGN GROUP
• Samsung Electronics Co., Ltd
• Sony
• Wikitude