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The global virtual reality in gaming market size stood at USD 5.12 billion in 2019 and is projected to reach USD 45.20 billion by 2027, exhibiting a CAGR of 31.8% during the forecast period.
Virtual reality (VR) in gaming market growth is primarily driven by the increasing internet penetration rates and the rising adoption of VR hardware and accessories among gamers. VR accessories used in gaming applications include motion-sensing devices, head-mounted displays, gloves, wireless controllers, and bodysuits equipped with advanced motion sensors. These devices are equipped with artificial intelligence (AI) module, that help users to see, move, play, and even interact with the objects in the game. In the current scenario, key players in the market are focused on developing prototypes gaming hardware, software, and content based on the internet of things (IoT) and AI, for using virtual reality technology in video games.
Also, the rising number of startups offering VR gaming software is expected to propel the demand for virtual reality in gaming. Moreover, the growing adoption of connected devices such as smart TV, smart projector, smart remote, smart monitor, smartphones, and others in gaming is expected to boost the market size.
As a part of the business strategy, prominent players in the market are focused on investing in expanding their offerings by launching advanced VR hardware and accessories.
The coronavirus or COVID-19 pandemic is currently impacting the global economy at every level. Based on the initial indicators from the first quarter, a minor decline can be observed in overall sales of VR gaming devices and accessories. Also, the investment scenario and other business strategies are on hold due to lack of operability. The outlook for the market growth in the second half of the year 2020 and beyond, remains slightly uncertain.
Also, the current situation witnesses slight deviations in the customer base in the gaming market owing to COVID’s impact in countries including the US, Italy, Germany, India, and many others. However, the overall gaming industry is expected to rise with a significant CAGR during the period. The growth in the gaming industry is owing to the rising demand for gaming software and content based on virtual reality technology. With the rising demand for virtual reality software in gaming applications, this market is expected to grow at a substantial CAGR.
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Advent of Cloud Gaming Technology to Shift Virtual Reality Gamig to Another Level
Key players in the virtual reality in gaming market are focused on adopting cloud models in VR gaming. This adoption would aid to offer the users with improved gaming experience and allow them to customize their gaming library and store their games for instant access to their profiles. Owing to this, the adoption of cloud gaming is considered as one of the emerging trends for this developing market. Also, VR games based on cloud offer a wide range of features including unlimited storage capability, live streaming, links between the connected device, and others. The adoption of cloud in gaming will help to drive the demand for virtual reality gaming hardware and software in the future. Also, the cloud is supporting in reducing the demand for high-cost offline gaming DVDs and disk.
The rising demand for virtual reality software based on cloud among the users is expected to boost the market size. Key players in the market are focused on completing strategical partnerships and collaborations to strengthen their market position. For instance, in May 2019, Microsoft Corporation completed a partnership with Sony Corporation. This partnership was completed to develop advanced cloud gaming platform and online content streaming solutions and to support the overall market growth worldwide. Further, companies in the gaming industry such as NVIDIA, AMD, and Huawei Technologies are focused on investing in the development of advanced virtual reality hardware based on GPU-as-a-service cloud capabilities.
Increasing Demand for Advanced Gaming Consoles & Other Devices Will Drive Adoption of Virtual Reality in Gaming
One of the key market drivers is the increasing demand for advanced gaming consoles enabled with technologies such as AR/VR, IoT, 4K and 8K resolutions, 3D graphics, cloud streaming, and others. Also, the rising demand for virtual reality accessories such as motion sensing devices, head-mounted displays, gloves, masks, treadmills, bodysuits, backpacks, and 3D headphones is expected to boost the market growth. The gaming consoles and accessories are equipped with innovative wireless technologies, such as Wi-Fi, Bluetooth 5.0, and Bluetooth 6.0. Further, key players such as Microsoft Corporation, Sony Corporation, and others are focused on launching advanced gaming consoles and accessories based on VR capabilities.
Also, key players such as Sony Corporation, AsusTek Computer Inc., and others are investing in the research and development division for the development of optical gaming devices based on virtual reality technology. With a rise in the adoption of optical gaming devices such as optical trackers, mechanical trackers, laser ranging, pattern recognition, and 3D input devices, the market size for VR in gaming is also expected to grow during the forecast period.
Lack of Skilled Professionals to Develop VR Content Might Limit Growth
Key players in the market frequently witness glitches while creating virtual reality gaming content owing to the lack of proficient designers, developers, and testers, along with the gaming infrastructure. This might be considered as one of the key restraining factors for market growth. Also, owing to the insubstantial operating structure and high piracy issue, unlicensed gamers are gaining permission to access premium games for free or at a reasonably low cost. The rising piracy level for online and offline VR games has dropped the overall sales of virtual reality gaming accessories. With the drop in demand for accessories, the market growth of virtual reality in gaming is also expected to plunge.
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Hardware Segment to Dominate Backed by Their Rising Sale
The gaming market by component is segmented into hardware, software, and content. Among all the segments, the hardware is expected to dominate the market in terms of revenue during the forecast period. Also, revenue in this market is generated primarily owing to the sale of hardware and content based on the VR technology. Hardware includes devices such as consoles, head-mounted devices, controllers, keyboards, gloves, headphones, bodysuits, and others. Software includes the actual games that are installed in consoles or PC. Gaming devices based on virtual reality technology provides a simulation of real-time surroundings for different purposes in games. Advanced motion sensors and vibrators are used in the gaming devices to monitor the position and movement made by the user. The data is collected by sensors and modules and is transferred to the AI system to analyze them and revert accordingly.
Further, the gaming devices are categorized according to the usage of technology. Mostly, the virtual reality devices are differentiated based on the level of immersion they offer. The immersion level can range from semi-immersive to fully immersive VR. Key players in the market such as Razer, Inc., Leap Motion Inc., Virtuix, and VirZoom, Inc. are focused on the development of advanced hardware-based technology for gaming purposes. With the development of advanced hardware, the market growth is expected to boost during the forecast period.
Software is one of the key components in the gaming market and this segment is expected to grow at a significant CAGR during the forecast period. There are two categories of VR software available including authoring systems and toolkits. Toolkits comprise of precise libraries and advanced programs to create VR based gaming applications. Additionally, the authoring systems include graphical interfaces. Key players in the market are focused on completing acquisition and mergers to provide advanced software for gaming applications.
Console/PC Segment to Lead Stoked by Demand for 3D Gaming Consoles
Based on device, the VR in gaming market is divided into mobile, console/PC, and standalone. Among all these segments, console/PC is expected to dominate the market by holding the maximum share during the forthcoming period. The growth is driven by the rising demand for 3D gaming consoles based on cloud services among the end-users. To experience enriched 3D graphics with splendid sounds effects, users are focused on investing in purchasing advanced 3D consoles, VR devices, and headphones/speakers with Dolby Atmos technology. With a rise in the demand for these devices, market growth is expected to boost during the forecast period.
Furthermore, the mobile and standalone segments are expected to grow with a significant CAGR during the forecast period. The growth of these segments is owing to the rising demand for virtual reality software and content in the gaming industry. Users can install gaming software based on virtual reality technology in their smartphones to experience content. Key companies such as Oculus, NextVR, Magic Leap, and others are focused on launching advanced software and content to strengthen their market position.
North America Virtual Reality in Gaming Market Size, 2019 (USD Billion)
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The global virtual reality in gaming market is divided into five regions, including North America, Asia Pacific, Europe, the Middle East & Africa, and Latin America.
Among all the regions, North America is expected to hold the largest market share in 2019. The region generated a revenue of USD 2.28 Billion in 2019 and is anticipated to grow with a substantial CAGR during the forecast period. The growth in this region is owing to the advent of core technology such as augmented reality (AR) and virtual reality, 5G, 3D audio, advanced graphics, and others. Also, the market growth is driven by the presence of key companies such as Electronic Arts, Inc., Google LLC, Leap Motion, Inc., Facebook Technologies, LLC., Microsoft Corporation, and others in the region. Key companies in this region are focused on investing in the development of advanced VR hardware and software.
Europe is expected to grow with a significant CAGR during the forecast period. The region generated a notable revenue in 2019 The growth in the region is owing to the rising demand for virtual reality devices in gaming tournaments in countries such as Germany, Italy, Spain, and others. These tournaments are based on advanced games with built-in virtual reality technology. Additionally, in Europe, the government and major gaming organizers are focused on initiating various gaming tournaments. Some of the tournaments held in Europe include E3 2019, Casual Connect Europe, GDC 2019, Gamescom 2019, London Games Festival, and others. Also, Germany is considered as the gaming hub. The country would create many market opportunities in the upcoming future.
Asia Pacific is expected to grow with the highest CAGR during the forecast period. Emerging countries such as India, South Korea, China, and Indonesia would contribute to the highest CAGR across the region. The growth in the region is owing to the presence of major players in the gaming consoles market such as Sony Corporation, Nintendo Co. Ltd., and others. Other factors such as the presence of a huge number of gamers in countries such as India, China, Indonesia, and others, are expected to drive the demand for VR hardware and software. Additionally, key players are focused on leveraging opportunities by amalgamating gaming consoles with various technologies, such as virtual reality, 5G, artificial intelligence (AI), cloud-based streaming, and others.
Latin America and the Middle East and Africa have a standard of emerging internet penetration rates. As a result, the number of professional gamers, as well as other online gamers would be in growing terms as compared to the other regions. Hence, there would be a growing possibility to adopt the VR games or any other entertainment solution. This would cause moderate market growth in the region.
Key Players Are Focusing on Strategic Mergers and Acquisitions to Strengthen Their Position
Oculus VR is a US-based company. It offers virtual reality hardware and software products. In 2014, the company was acquired by Facebook for around USD 2.30 billion. In 2012, the company launched Oculus Rift, a virtual reality headset. With the triumph of Oculus Rift, the company completed a partnership with Samsung to develop the Samsung Gear VR.
Samsung Electronics is one of the key players in the virtual reality in the gaming industry. The Samsung Gear VR provides 2D, 3D, and 360-degree content by connecting it with smartphones. End-users can connect the devices such as controllers, head-mounted devices, VR headsets, and others, with their smartphones to leverage an immersive experience.
The current scenario of the virtual reality gaming industry has directed the completion of various acquisition, partnerships, and mergers to drive market growth. For instance, in June 2017, Apple, Inc. acquired SensoMotoric instruments provider of eye-tracking solution. This acquisition was completed to drive the VR in gaming market growth.
An Infographic Representation of Virtual Reality Gaming Market
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The virtual reality in gaming market research report overview major leading regions across the world to provide an enhanced understanding of the user. Also, the report offers detailed insights into the latest industry trends and examines technologies that are being deployed at a rapid pace at the global level. The report additionally highlights the growth-stimulating factors and restraints, assisting the reader to gain in-depth knowledge about the market.
Value (USD billion)
Fortune Business Insights says that the market was valued at USD 5.12 billion in 2019.
Fortune Business Insights says that the market is expected to reach USD 45.20 billion in 2027
A growth of 31.8% CAGR will be observed in the market during the forecast period (2020-2027)
Within the device segment, the console/PC segment is expected to lead during the forecast period.
Increasing demand for advanced gaming consoles, VR accessories, and optical gaming devices is expected to primarily drive the market growth
Microsoft Corporation, Samsung Group, Google LLC, Apple Inc., and Sony Corporation are the top companies in the market.
The software and content segment is expected to grow at the highest CAGR during the forecast period.
The revenue of the market in North America in 2019 was USD 2.28 billion.
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