Extended Reality (XR) Market Size, Share & Industry Analysis, By Type (Virtual Reality, Augmented Reality, and Mixed Reality), By Industry (Healthcare, Education, Retail & E-commerce, Gaming, Automotive, Media & Entertainment, and Others), and Regional Forecast, 2024 – 2032

The global extended reality (XR) market was valued at USD 131.54 billion in 2023. The market is projected to be worth USD 183.96 billion in 2024 and reach USD 1,706.96 billion by 2032, exhibiting a CAGR of 32.1% during the forecast period (2024-2032). Extended Reality (XR) is a relatively new concept that brings together cutting-edge technologies such as Virtual Reality (VR), Augmented Reality (AR), and Mixed Reality (MR). Extended reality provides mobility solutions as they are easily accessible via most electronic devices. XR is an umbrella term for all computer-generated environments to merge the virtual world with the physical world to deliver an immersive experience to users worldwide.

During the COVID-19 pandemic, companies around the world discovered methods to encourage their internally and geographically dispersed employees to connect, coordinate, and chart the way forward. This need drove the adoption of AR and VR Technologies during the pandemic.

Worldwide spending on XR products and services is estimated to be USD 18.8 billion in 2020. Implementing XR helps businesses with a platform that helps people to work efficiently. Rising usage of XR helps to lower the operational cost and helps to boost the productivity of the business by 10 to 20% by utilizing all the available resources. Increasing adoption of XR technique helps deliver real-world experience to customers worldwide with high engagement and interaction to improve sales and enhance brand awareness.

Extended Reality (XR) Market Trends

Surge in Advancement of 5G Technology Boosts the Product Demand

5G integrated with XR technology provides a wide range of application areas to boost communication capabilities. The penetration of 5G and XR techniques helps deliver remote control access, real-time experience, industrial control, and mobility automation applications. The surge in the advancement of 5G technology boosts its demand and is anticipated to drive the extended reality market growth during the forecast period.

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Extended Reality (XR) Market Growth Factors

Rising Demand for VR Devices for Gaming and Entertainment Applications Drives Market Growth

Virtual reality and alternate reality games represent a futuristic vision in the gaming world. The usage of XR allows users to experience data and analytical representations of current or past games as they prefer. Similarly, the growing usage of VR headsets in the entertainment industry helps to see 3D objects from different angles to deliver an immersive experience. The VR headset is increasingly used to build an emotional connection with the user.

This propels the demand for VR headsets in gaming and entertainment applications, which helps to drive market growth.

RESTRAINING FACTORS

High Implementation Cost Hinders Market Growth       

Extended reality creates virtual replicas of datasets that users can be tested and shared with users. However, this process encounters challenges when capturing the intricate details of real-world images and specialized models. Providing a high-quality XR experience can be expensive, particularly when factoring in the expenses of headsets and tactile sensors. As a result, this factor hampers the overall implementation cost and may hinder the Extended Reality (XR) market growth.

Extended Reality (XR) Market Segmentation Analysis

By Type Analysis

Rising Usage of Virtual Reality for Professional Training Helps to Dominate the Market

Based on type, the market is segmented into virtual reality, augmented reality, and mixed reality. The growing usage of Virtual Reality (VR) applications and headsets aims to immerse users in a computer-simulated reality. These VR headsets generate realistic sounds and images, engaging all five senses to create an interactive virtual world. The virtual reality segment dominates the market during the forecast period.

Furthermore, augmented reality and mixed reality segments are projected to grow with a prominent share due to increasing implementation of AR and MR among different industry verticals to provide a comprehensive digital experience to users.

By Industry Analysis

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Gaming Industry Dominate Owing to Penetration of Extended Reality Technique to Deliver Real-World Experience to the User

On the basis of industry, the market is divided into healthcare, education, retail & e-commerce, gaming, automotive, media & entertainment, and others. The gaming sector dominated the market in 2023 as the majority of end users demand immersive experiences provided by the extended reality. Companies that develop games are among the early adopters of XR solutions to create more memorable, immersive, and engaging customer experiences. The industry has transitioned from the creation of even more engaging and faster game consoles, smart chipsets and extraordinary graphics.

Increasing the use of XR technology in hospitals by surgeons helps to learn new skills or improve existing skills in a safe and secure environment. Innovations in the field of XR across the healthcare industry help to reduce the operating costs of clinics and hospitals, to make better diagnostics, and enable patient-to-patient communication. These innovations enhance the penetration of the XR technique in the healthcare industry.

REGIONAL INSIGHTS

The global market is classified across five regions, North America, Europe, Asia Pacific, the Middle East & Africa, and South America.

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North America holds the largest extended reality market share, owing to the presence of multiple market players. The region benefits from opportunities for exposure to high technology and the increasing use of smart devices leading to stronger demand for extended reality experiences. Additionally, the growing investments in infrastructure development facilitate the integration of XR, enabling unprecedented connectivity across the U.S. and Canada. Moreover, technological advancements, such as the emergence of Augmented Reality (AR), Artificial Intelligence (AI), Virtual Reality (VR), and Big Data technologies across several industries, including retail, e-commerce, and entertainment industries, contribute to building fully virtual environments for users.

Asia Pacific is projected to grow with the highest CAGR during the forecast period. This substantial growth is due to the increasing amount of investments related to technology across the region. In addition, according to a report titled “Accelerating India's Potential to Address the Global XR Opportunity”, industry-related startup firms across India are expected to evolve with the intent of developing global solutions. 76% of these firms were those that serve both domestic and international clients. Thus, these developments indicate strong growth for the market across the region.

Europe is projected to experience substantial growth with a high CAGR during the forecast period, primarily due to the presence of telecom companies and a surge in investment and innovation in software and other platforms for developing AR applications using 5G technology. This helps propel the market growth in Europe.

The Middle East & Africa and South America are experiencing growth due to the rising penetration of digital technologies across different industrial sectors, including, healthcare, automotive, gaming, and media & entertainment. The increasing usage of smartphones and the rising demand for developments in the gaming and entertainment industry will surge the demand for XR during the forecast period.

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List of Key Companies in Extended Reality (XR) Market

Key Players Focus on Deploying Extended Reality Technology to Strengthen their Position

Companies operating in the market include Qualcomm Technologies Inc., HTC Corporation, Meta, SOFTENGI, AVEVA Group Limited, SoftServe Inc., SphereGen Technologies LLC, Accenture PLC, and others, which serve as XR technology providers/generators. These companies also engage in strategic partnerships, acquisitions, and collaborations to expand their business and distribution network and maintain market growth. For instance, Metaverse is expected to add USD 1 trillion to the APAC economy by 2031 by enhancing the usage of Augmented Reality (AR) and Virtual Reality (VR) across different industries.

List of Key Companies Profiled:

• Qualcomm Technologies Inc. (U.S.)


• HTC Corporation (Taiwan)


• Meta (U.S.)


• SOFTENGI (U.S.)


• AVEVA Group Limited (U.K.)


• SoftServe Inc. (U.S.)


• SphereGen Technologies LLC (India)


• VertexPlus Technologies Limited. (India)


• Accenture PLC (Ireland)


• Theorem Solutions (U.K.)

KEY INDUSTRY DEVELOPMENTS:

• February 2024 – MediThinQ, a South Korean firm, introduced a pair of XR wearable displays focused on serving surgeons. Along with this, the company also mentions a multimillion-dollar investment that it has received from JLK Technology.


• February 2023 - At the Galaxy Unpacked event in San Francisco, Samsung Electronics Co. announced its strategic partnership with Google and Qualcomm. This partnership is based on the attempt to develop an ecosystem for the market.


• February 2023: OnePlus partnered with Qualcomm to bring Snapdragon Spaces extended reality feature to OnePlus 11 5G and help developers build an easily usable XR ecosystem. This partnership aims to provide users with the digital experience of movies and live concerts and enable them to deliver comprehensive gaming experiences.


• October 2022: Ericsson partnered with the University of Texas (UT) Austin to extend a research partnership to drive 6G-powered XR innovation to deliver users immersive and seamless XR experiences.


• September 2022: Meta formed a partnership with Qualcomm to design customized chips for the next-generation extended reality platforms for the Metaverse.

REPORT COVERAGE

An Infographic Representation of Extended Reality Market

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The report provides a detailed market analysis and focuses on key aspects such as leading companies, product/service types, and leading product applications. Moreover, the report offers insights into the market trends and highlights key industry developments. In addition to the factors above, the report encompasses several factors that have contributed to the market's growth in recent years.

Report Scope & Segmentation