Global Extended Reality Market Size, Share & Industry Trends Analysis Report By Component, By Technology (Virtual Reality (VR), Augmented Reality (AR) and Mixed Reality (MR)), By End User, By Regional Outlook and Forecast, 2022 - 2028
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Get in-depth analysis of the COVID-19 impact on the Extended Reality Market
Market Report Description
The Global Extended Reality Market size is expected to reach $161.6 billion by 2028, rising at a market growth of 29.7% CAGR during the forecast period.
Extended reality or XR is a term to refer to Virtual reality (VR) and augmented reality (AR). This technology enables the integration or mirroring of the real world by generating a "digital twin world" with which the user can converse. VR and AR are expanding quickly and are being used in various industries, including entertainment, real estate, training, marketing, and remote work.
Extended reality (XR) that incorporates multiple senses, including touch, taste, smell, and sight, is known as multisensory extended reality. In the same way, hearing is mediated by pressure waves, odor molecules convey the smell, and light striking the eye's retina mediates vision. Multisensory extended reality sensory stimuli can be seen, heard, smelled, touched, and experienced in the surroundings.
Since the olfactory system in biology is interwoven through the sensory nerve system, scent plays a significant role in multisensory extended reality. Neuromorphic engineering, positive psychology, neuroenhancement, cognitive science, and nanoemulsion technology are all applied to multisensory experiences. It is a type of digital treatment for limbic system technology. By utilizing them as mood-enhancing technology, multisensory experiences can be tailored to improve user well-being through digital therapies, resulting in favorable changes in mood, cognition, perception, and behavior.
Extended reality with multiple senses makes use of OpenXR and WebXR technologies. Its components include auditory processing, visual systems, head-eye systems, multimodal integration, motor control, and perception. It is HCI technology or human-computer interface. Retinal reverse engineering is necessary for each of these.
COVID-19 Impact Analysis
The pandemic increased the demand for extended reality gadgets due to the unexpected condition of lockdowns in crucial places. Because of the COVID-19 pandemic, many companies allowed their workforce to work remotely, which increased the demand for online conferences, training, and meetings. The key actors were also required to work together to develop and implement various fresh, flexible strategies to improve the customers' experiences. Additionally, the need for online education grew due to the closure of schools, colleges, and other educational institutions owing to the pandemic. Such demands provided the AR and VR sectors with attractive potential. In addition, extended reality began to be used in new healthcare applications like telehealth, point-of-care, and home-based care. Therefore, the pandemic had a favorable impact on the extended reality market.
The leading players in the market are competing with diverse innovative offerings to remain competitive in the market. The below illustration shows the percentage of revenue shared by some of the leading companies in the market. The leading players of the market are adopting various strategies in order to cater demand coming from the different industries. The key developmental strategies in the market are Partnerships & Collaborations.
Market Growth Factors
Increased spending on augmented and virtual reality technologies
Extended reality (XR) has generated much interest in recent years. Major business organizations are currently making investments in virtual and augmented reality technologies along with mixed reality technologies. Many businesses are exploring numerous XR use cases, with many of them being used in immersive learning, R&D, entertainment, and remote help. Additionally, a number of sectors use immersive technologies to help customers try before they buy. The user can use these technologies to check the fit of the product. Additionally, such factors will boost the development of the extended reality market.
Rising government support for extended reality use
The pandemic also prompted governments to implement regulations meant to enhance how they communicate with citizens, raising the standard of public services. Many governments have begun implementing augmented reality (AR) technologies to handle the most complex demands of people in a post-pandemic scenario. In addition, exactly like AR, virtual reality has had a significant impact on government services. Virtual reality has evolved into an essential part of assistance for firefighting and social service groups since it has enhanced accessibility for many people. Therefore, in the coming years, the rising government support for the use of such technologies will bolster the growth of the market.
Market Restraining Factor
The adverse impact of excessive use of XR technology and the impact of COVID on the manufacturing sector
While XR is emerging as a helping technology in the healthcare sector, in recent years, it has been that extended reality gadgets too much use has negative health effects as well. Although extremely advanced, extended reality technologies have also been scrutinized for potential health risks. The most frequent risk is users getting hurt when they accidentally encounter real items immersed in the virtual environment. After using XR equipment, some users have reportedly experienced headaches, dizziness, eye strain, and nausea. Therefore, these factors have significantly slowed down the growth of the market.
Based on component, the extended reality market is categorized into hardware, software, and services. The hardware segment garnered the highest revenue share in the extended reality market in 2021. The hardware employed in XR technology, which may be accomplished without the use of any external devices, is one of its noteworthy qualities. From a hardware standpoint, heads-up displays (HUD) with early iterations of artificial intelligence or AI have prompted businesses to test out technologies that draw on the potential of AR and VR. For example, AR can advance consumer interactions by "overlaying" digital objects and information "on top" of real-world settings.
On the basis of technology, the extended reality market is divided into virtual reality (VR), augmented reality (AR) and mixed reality (MR). The augmented reality segment recorded a significant revenue share in the extended reality market in 2021. Wearable technology with lots of sensors is used to give augmented reality. Personalized marketing material delivery to consumers via sensors to a device like a smartphone may be as simple as internet search information or text notifications given through a wearable gadget. The ability of AR technology to move with the person through a device or provide content in a manner that frees the user's hands for other tasks is a crucial component that drives the expansion of the segment.
End User Outlook
Based on end user, the extended reality market is segmented into gaming, retail, healthcare, manufacturing & industrial, media & entertainment, education, aerospace & defense, and others. The gaming segment witnessed the maximum revenue share in the extended reality market in 2021. Games now allow players to thoroughly invest themselves in their characters, making them considerably more participatory. In order to deliver a virtual environment that augments the user's physical experience, developers are utilizing AR and VR technology to provide realistic pictures as well as sound and many other sensory capabilities.
|Market size value in 2021||USD 27.6 Billion|
|Market size forecast in 2028||USD 161.6 Billion|
|Historical Period||2018 to 2020|
|Forecast Period||2022 to 2028|
|Revenue Growth Rate||CAGR of 29.7% from 2022 to 2028|
|Number of Pages||257|
|Number of Table||403|
|Report coverage||Market Trends, Revenue Estimation and Forecast, Segmentation Analysis, Regional and Country Breakdown, Market Share Analysis, Competitive Landscape, Companies Strategic Developments, Company Profiling|
|Segments covered||Component, Technology, End User, Region|
|Country scope||US, Canada, Mexico, Germany, UK, France, Russia, Spain, Italy, China, Japan, India, South Korea, Singapore, Malaysia, Brazil, Argentina, UAE, Saudi Arabia, South Africa, Nigeria|
On the basis of region, the extended reality market is analyzed across North America, Europe, Asia Pacific, and LAMEA. The North America segment recorded the highest revenue share in the extended reality market in 2021. The extended reality technologies have grown in this region as a consequence of the increased availability and use of connected devices like smartphones. Additionally, XR is widely employed in the manufacturing and retail processes. Major players who offer cutting-edge solutions are also situated in North America.
Free Valuable Insights: Global Extended Reality Market size to reach USD 161.6 Billion by 2028
KBV Cardinal Matrix - Extended Reality Market Competition Analysis
The major strategies followed by the market participants are Partnerships. Based on the Analysis presented in the Cardinal matrix; Microsoft Corporation and Google LLC (Alphabet Inc.) are the forerunners in the Extended Reality Market. Companies such as Facebook, Inc. (Meta Platforms, Inc.), Qualcomm Incorporated, Sony Corporation are some of the key innovators in Extended Reality Market.
The market research report covers the analysis of key stake holders of the market. Key companies profiled in the report include Meta Platforms, Inc. (Facebook), Sony Corporation, Microsoft Corporation, Google LLC (Alphabet Inc.), Accenture PLC, Qualcomm Incorporated (Qualcomm Technologies, Inc.), HTC Corporation, Unity Software, Inc., Adobe, Inc., and SoftServe, Inc.
Recent Strategies Deployed in Extended Reality Market
» Partnerships, Collaborations and Agreements:
- Feb-2023: Google joined hands with Samsung, a consumer electronics enterprise, for Android-based Extended Reality headsets. This collaboration would broaden the use of google enabling google users to get a new generation of computing experiences.
- Jan-2023: Microsoft and OpenAI, an AI research laboratory, broadened their partnership. With this extended partnership, developers, and organizations all over industries could access the advanced AI infrastructure, models, and toolchain with Azure which would be helpful in developing and running their applications.
- Oct-2022: Meta and Microsoft, a multinational technology corporation, came into partnership to offer alluring experiences in VR. Meta Quest Pro and Meta Quest 2 that would be backed by Microsoft Intune and Azure Active Directory. Through this partnership, Meta would offer Windows 365 on Meta Quest devices that would provide aid in streaming a Windows Cloud PC to its users.
- Sep-2022: Meta Platforms Inc came into an agreement with Qualcomm Inc., a semiconductor and software producer. With the help of Qualcomm Inc., Meta Platforms Inc would be able to manufacture custom chipsets for its Quest virtual reality (VR) devices.
- Aug-2022: Unity came into partnership Capgemini, a technological and consulting company. This partnership would facilitate enterprises globally in grabbing the benefits of metaverse experiences all over industries. This integration would strive after strengthening Unity's technology platform. With the help of Capgemini, Unity's real time 3D solutions would direct new companies to join next generation of the internet, or metaverse, facilitating them in getting higher customer-engagement ratio.
- May-2022: Qualcomm came into collaboration with ArborXR, enterprise-grade XR device management, and content management company. With this collaboration, ArborXR would deliver device management software to Qualcomm Technologies' XR customers.
- Feb-2022: Sony came into an agreement with Niantic, Inc, developer, and provider of AR mobile games, to work together in the domain of auditory AR for headphones. Through this agreement, Sony would serve its worldwide customers by enabling them to listen the sound of the virtual world using headphones picked up from the sounds of the real world.
- Jan-2022: Qualcomm Technologies, Inc. teamed up with Microsoft, a multinational technology corporation, in extending the embracement of augmented reality (AR). Through this partnership, Microsoft would provide aid to Qualcomm in escalation of adoption of AR hardware and software all over the consumer and enterprise sectors.
- May-2021: HTC signed a partnership with Agora, Inc., a platform for real-time engagement APIs to enhance the embracement of VR innovation useful in real-time engagement (RTE) applications. With this partnership, Agora would provide its RTE expertise into the HTC VIVE ISV Program, HTC would offer developers to experience spaces powered by AR and XR with human element.
- Sep-2020: Facebook entered partnership with Luxottica, a Ray-Ban manufacturer. Through this partnership, a primary pair of smart glasses would be developed by utilizing the augmented reality capabilities, allowing Facebook to serve the employees and contractors in producing the software and hardware required for real, working in AR glasses.
» Product Launches and Product Expansions:
- Jan-2023: HTC and Meta Quest Pro introduced Vive XR Elite Extended Reality headset. The Vive XR Elite would come with the combined capabilities of Augmented Reality (AR), Virtual Reality (VR) and Mixed Reality (MR).
- Nov-2022: Sony announced the launch of Mocopi motion-tracking bands developed for Metaverse on smartphones. Mocopi is a collection of six motion-tracking bands, allowing users animate and control avatars present in metaverse apps on Android smartphones and iPhones.
- Oct-2022: HTC together with XRHealth, a healthcare metaverse platform, released Virtual reality distraction therapy to better serve patient. Virtual reality distraction therapy drives patients to a virtual world and direct them through meditation and exercises beneficial in mitigating pain and anxiety of patients.
- Oct-2022: Meta launched Virtual Reality Headset namely, Quest Pro virtual and mixed reality headset, a device that form a connection between the computer created world with the physical one. This product would provide a new approach to consumers where they could interact with virtual images of the physical world around them.
- Oct-2022: Qualcomm Technologies, Inc. announced the launch of Snapdragon XR2+ Gen 1, a premium-tier XR platform to drive the next generation of MR and VR devices.
- Sep-2022: Facebook introduced Oculus Quest, a VR gaming system that would use Facebook advanced technology, Oculus Insight, a technology developed to strengthen inside-out tracking, Guardian, and Touch controller tracking. Oculus Quest would incorporate four ultra-wide-angle sensors and computer vision algorithms enabling to keep track of position in the physical world eliminating the requirement of using external sensors.
- May-2022: Google unveiled a pair of augmented reality glasses developed for real-time language translation overlaying on the lenses, enabling wearers to quickly translate the language of another person speaking to them.
- Mar-2022: Adobe announced the launch of AR/VR tools - Adobe Substance 3D Modeler and Adobe Aero tool, helpful in the creation of 3D environments including games and augmented reality worlds.
» Acquisitions and Mergers:
- Mar-2021: Unity completed the acquisition of VisualLive, a technological software company. Through this acquisition, Unity would further extend its strategic growth in the AEC industry as well as it would enable customers to attain optimal efficiency and cost-effectiveness.
Scope of the Study
Market Segments Covered in the Report:
- Virtual Reality (VR)
- Augmented Reality (AR)
- Mixed Reality (MR)
By End User
- Aerospace & Defense
- Manufacturing & Industrial
- Media & Entertainment
- North America
- Rest of North America
- Rest of Europe
- Asia Pacific
- South Korea
- Rest of Asia Pacific
- Saudi Arabia
- South Africa
- Rest of LAMEA
Key Market Players
List of Companies Profiled in the Report:
- Meta Platforms, Inc. (Facebook)
- Sony Corporation
- Microsoft Corporation
- Google LLC (Alphabet Inc.)
- Accenture PLC
- Qualcomm Incorporated (Qualcomm Technologies, Inc.)
- HTC Corporation
- Unity Software, Inc.
- Adobe, Inc.
- SoftServe, Inc.
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North America Extended Reality Market Report 2022-2028
Europe Extended Reality Market Report 2022-2028
Asia Pacific Extended Reality Market Report 2022-2028
How valuable will the Extended Reality Market be in the future?
The global Extended Reality Market size is expected to reach $161.6 billion by 2028.
What are the key driving factors and challenges in the Extended Reality Market?
Increased spending on augmented and virtual reality technologies are driving the market in coming years, however, The adverse impact of excessive use of XR technology and the impact of COVID on the manufacturing sector restraints the growth of the market.
What are the major top companies in the competitive landscape?
Meta Platforms, Inc. (Facebook), Sony Corporation, Microsoft Corporation, Google LLC (Alphabet Inc.), Accenture PLC, Qualcomm Incorporated (Qualcomm Technologies, Inc.), HTC Corporation, Unity Software, Inc., Adobe, Inc., and SoftServe, Inc.
Which segment shows a high revenue share of the Extended Reality Market in 2021?
The Virtual Reality (VR) segment acquired maximum revenue share in the Global Extended Reality Market by Technology in 2021 thereby, achieving a market value of $71.9 billion by 2028.
Which region dominated the Extended Reality Market in 2021?
The North America market dominated the Global Extended Reality Market by Region in 2021, and would continue to be a dominant market till 2028; thereby, achieving a market value of $60.2 billion by 2028.