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Virtual Reality (VR) in Gaming Market Size, Share & COVID-19 Impact Analysis, By Component (Hardware, Software, and Content), By Device (Mobile, Console/PC, and Standalone), and Regional Forecast, 2021-2028

Region : Global | Format: PDF | Report ID: FBI100271



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The global virtual reality (VR) in gaming market size was valued at USD 7.92 billion in 2021 and is projected to reach USD 53.44 billion in 2028, at a CAGR of 31.4% during 2021-2028. North America dominated the global market with a share of 43.76% in 2020.

Based on our analysis, the global market exhibited a significant growth of 25.7% in 2020 as compared to the average year-on-year growth during 2017-2019. The rise in CAGR is attributable to this market’s demand and growth, returning to pre-pandemic levels once the pandemic is over.

The demand for virtual reality in gaming is primarily driven by the rising adoption of advanced VR hardware and accessories among gamers. The increasing number of small and start-up companies is entering the market with innovative software and content offerings. Besides, developments in 5G technology, innovative gaming content, and cloud-based gaming technology are some of the key drivers of the market. Further, as a part of the business strategy, prominent players are launching advanced hardware and accessories. For instance,

  • In March 2019, Oculus VR launched Oculus Rift S, an advanced VR head-mounted display device. All VR-powered games available on the original Rift can function effortlessly on the Rift S.

COVID-19 Impact

Rising Demand for Virtual Gaming during COVID-19 Pandemic to Boost Market Opportunity

The COVID-19 pandemic impacted the worldwide economy at every level. In the initial period of the pandemic, virtual accessories, hardware, and gaming devices witnessed a decline in their sales. The shutdown of manufacturing units highly impacted the production scale of its hardware.

However, the overall gaming industry is expected to rise with a significant CAGR during the forecast period. The initial data showcased a sharp rise in sales and playing time of online games during and post lockdown. For instance, in March 2020, Verizon Communication US recorded a 75% increase in gaming traffic in peak hours.

Similarly, the strict country lockdown and social distancing norms across the globe boosted the adoption of virtual reality gaming as a potential indoor engaging activity. The growth in the gaming industry fueled the demand for advanced gaming software and content under virtual reality technology. Thus, the pandemic has initially slowed down the hardware segment. However, in the long term, the market is expected to grow remarkably.


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Advent of Cloud Gaming Technology to Surge Virtual Reality Gaming Demand

Key players in the market are focused on adopting cloud models in VR gaming. This adoption would aid the users with an improved gaming experience and allow them to customize their gaming library. Also, instant access to the stored virtual reality games is possible through cloud-based gaming solutions from any location and on any platform. Owing to this, the adoption of cloud gaming is considered one of the emerging trends for this developing market. Also, these games based on the cloud offer a wide range of features, including unlimited live streaming, storage capability, links between the connected device, and others.

The rising demand among the users for cloud-based virtual reality software is expected to boost the market size. Key players are completing strategic partnerships and collaborations to strengthen their market position using cloud technology in the virtual reality gaming industry. For instance, in May 2019, Microsoft Corporation completed a partnership with Sony Corporation to develop an advanced cloud gaming platform and online content streaming solutions. This partnership is also expected to support the overall market growth worldwide. Similarly, other companies in the gaming industry, such as NVIDIA Corporation, Advanced Micro Devices, and Huawei Technologies, are investing in the development of advanced hardware based on GPU-as-a-service cloud capabilities. This is expected to boost virtual reality (VR) in gaming market share.


Launch of Advanced Gaming Consoles & Other Devices to Drive Adoption of Virtual Reality in Gaming

The increasing demand for advanced gaming consoles enabled technologies such as augmented and virtual reality, the Internet of Things, higher resolutions, 3D graphics, and cloud streaming. These integrated advancements are one of the key market drivers. Also, the rising demand for virtual reality accessories such as motion sensing devices, bodysuits, head-mounted displays, gloves, masks, treadmills, backpacks, and 3D headphones is expected to boost the market growth. The key players such as Microsoft Corporation, Sony Corporation, and others are focusing on launching advanced gaming consoles and accessories based on its capabilities. For instance,

  • In January 2020, Sony Corporation declared the launch of PlayStation 5 in the upcoming year. The launch will help to boost the adoption of VR in the gaming industry.

  • In April 2021, Sony Corporation announced the launch of its next-generation PlayStation VR for PS5 next year. The newly launched PSVR2 will run on a single cord connection to reduce play’s mess. 

Also, key players are significantly investing in the research and development division for the development of optical gaming devices based on this technology. With a rise in the adoption of optical gaming devices and advanced consoles, the market size is also expected to grow during the forecast period.


Adverse Health Effect May Hamper Market Growth

Prolonged usage of virtual reality in gaming might negatively impact the gamers’ health. For instance, the technology uses devices that mimic the movement, but there is not any actual movement of the gamer. This can create locomotion sickness amongst the players.  Further, it can impact the mental health of the gamer owing to its potential addiction. As per the psychologists, the technology removes reality, and the players can lose the realism aspect. The violent and illegal game content might addict the gamer to committing the crime in real life. The growing immersive and interactive games are further expected to damage players’ wellbeing. This is expected to hinder the VR in gaming market growth.


By Component Analysis

Rising Sale of VR Hardware to Drive the Market Growth

Based on components, the market is segmented into hardware, software, and content. Hardware is expected to dominate the market in terms of revenue during the forecast period. Hardware includes devices such as consoles, head-mounted devices, controllers, keyboards, gloves, headphones, bodysuits, and others. The hike in revenue is primarily owing to the demand and sales of VR-based hardware in the gaming industry. 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. It is available in authoring systems and toolkits, which comprise precise libraries and advanced programs to create gaming applications. The content segment is set to gain rapid growth during the forecast period. The increasing demand for interactive games is driving innovative gaming content production.

By Device Analysis

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Increasing Demand for 3D Gaming Consoles to Fuel Console/PC Segment

Based on devices, the market is categorized into mobile, console/PC, and standalone. 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 sound effects, users are focused on investing in advanced 3D consoles, devices, and headphones/speakers.

Furthermore, the mobile and standalone segments are expected to grow with a significant CAGR during the forecast period. The increasing availability of advanced smartphones and internet capabilities is driving the demand for mobile-based virtual gaming. Users can install gaming software based on this technology on their smartphones to experience content. The growing gaming opportunities in standalone devices are also driving vast investments from key players such as Oculus VR Quest and HTC VIVE Focus.


North America VR in Gaming Market Size, 2020 (USD Billion)

Geographically, the market is fragmented into five major regions such as North America, Europe, Asia Pacific, the Middle East & Africa, and Latin America. They are further categorized into countries.

The North America Virtual Reality in Gaming Market size was valued at USD 2.74 Billion in 2020 and is growing at a CAGR of 29.2% from 2021 to 2028. North America is expected to dominate in terms of the market share in 2020. 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. The players in this region are focused on investing in the development of advanced hardware and software. For instance, in September 2018, Oculus launched Oculus Quest, an all-in-one gaming device based on virtual reality technology.

Europe is expected to grow significantly 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 VR technology. Additionally, in Europe, the government and major gaming organizers are focused on initiating various gaming tournaments. This is likely to boost the market share in the region. Also, Germany is considered 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 market growth in the region. As per the data of Comscore MMX, countries such as India, Indonesia, Japan, Australia, and more have the largest gaming audience and websites. This is driving the market opportunities in the region.

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The demand for immersive gaming is expected to run strong in the Middle East and Africa. The growing disposable income, young population, and government’s interests in the technology are expected to offer vast market opportunities. Similarly, Latin America is likely to witness steady growth with the rising demand from young gamers for the consoles and headsets in the region.


Key Players Seek Constant Developments to Strengthen their Market Positions

The key players in the market are focused on developing prototypes for gaming hardware, software, and content. The players are investing in building advanced virtual reality headsets to offer immersive and interactive gaming experiences to gamers. Also, the prominent players are involved in various acquisitions, partnerships, collaborations, and mergers to expand the market presence. For instance, in June 2017, Apple, Inc. acquired SensoMotoric Instruments, a provider of eye-tracking solutions. This acquisition was completed to drive VR in gaming market growth.

May 2021 – HTC VIVE launched two new headsets HTC Vive Pro 2, which is connected to the personal computer, and standalone HTC Vive Focus 3. Through this new product launch, the company is highly focused on market expansion in immersive technology.

April 2020 – Apple Inc. acquired NextVR, a California-based virtual gaming company. This acquisition is expected to enhance Apple’s initiatives for games, sports, and entertainment. Also, with NextVR’s 40 patients, the company is upscaling video streams.


  • Microsoft Corporation (Washington, U.S.)

  • Facebook LLC (Oculus VR) (California, U.S.)

  • Nvidia Corporation (California, U.S.)

  • HTC Corporation (Taoyuan City, Taiwan)

  • Unity Technologies (California, U.S.)

  • Magic Leap, Inc. (California, U.S.)

  • Firsthand Technology Inc. (Washington, U.S.)

  • Apple Inc. (California, U.S.)

  • Sony Corporation (Tokyo, Japan)

  • Ubisoft Entertainment SA (Montreuil, France)


  • September 2020 – Microsoft Corporation acquired media and gaming organization ZeniMax Media to accelerate Microsoft gaming business growth. As the gaming industry is growing, the company aims to create and empower new technology in the industry.

  • April 2021 – Oculus VR collaborated with independent studio Armature and publisher Capcom to launch Resident Evil 4 VR remake on Oculus Quest 2. The parent company Facebook is holding on to its Quest for showcase.   


An Infographic Representation of Virtual Reality Gaming Market

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The global VR in gaming market research report highlights leading regions across the world to offer a better understanding of the user. Furthermore, the report provides insights into the latest industry and market trends and analyzes technologies deployed at a rapid pace at the global level. It further highlights some of the growth-stimulating factors and restraints, helping the reader gain in-depth knowledge about the market.




Study Period


Base Year


Estimated Year


Forecast Period


Historical Period



  Value (USD billion)


Component; Device; and Geography

By Component

  • Hardware

  • Software

  • Content

By Device

  • Mobile

  • Console/PC

  • Standalone

By Region

  • North America (By Component, By Device, and By Country)

    • U.S. (By Device)

    • Canada (By Device)

  • Europe (By Component, By Device, and By Country)

    • U.K. (By Device)

    • Germany (By Device)

    • France (By Device)

    • Spain (By Device)

    • Rest of Europe

  • Asia Pacific (By Component, By Device, and By Country)

    • China (By Device)

    • Japan (By Device)

    • India (By Device)

    • Southeast Asia (By Device)

    • Rest of Asia Pacific

  • The Middle East & Africa (By Component, By Device, and By Country)

    • GCC (By Device)

    • South Africa (By Device)

    • Rest of the Middle East & Africa

  • Latin America (By Component, By Device, and By Country)

    • Brazil (By Device)

    • Mexico (By Device)

    • Rest of Latin America

Frequently Asked Questions

The market is projected to reach USD 53.44 billion by 2028.

The console/PC device segment is likely to lead the market.

The launch of advanced gaming consoles & other devices is set to drive the market.

Microsoft Corporation, Facebook LLC (Oculus VR), Nvidia Corporation, HTC Corporation, Unity Technologies, Samsung Group, Magic Leap, Inc., Qualcomm Technologies, Inc., and Google LLC are the top players in the market.

North America is expected to hold the highest market share.

Asia Pacific is expected to grow with a significant CAGR.

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