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The virtual reality market size was valued at USD 19.44 billion in 2022 and is projected to grow from USD 25.11 billion in 2023 to USD 165.91 billion by 2030, exhibiting a CAGR of 31.0% during 2023-2030. North America dominated the global market with a share of 31.22% in 2022.
The market analysis includes devices and software such as Google Cardboard, Move Motion Controller and PlayStation Headset, Quest 2, Unity Virtual Reality Development Software, and Microsoft HoloLens 2. Virtual reality offers simulated customer experience and vast applications to healthcare, gaming, retail, automotive, and entertainment industries. Organizations implement this technology to conduct virtual training, engineering and maintenance, marketing, designing, assistance, and simulation events with their workers and employees. In addition, the major players in the market are focused on providing advanced hardware and content to enhance customer experience. For instance:
Vast VR Application across Industries Amid COVID-19 Pandemic Boosted Market Growth
The manufacturing and production plants of devices, equipment, components, and other hardware products had been impacted due to the coronavirus outbreak worldwide. Thus, initially, in 2020, with the limited stock of virtual reality products and services, the market witnessed a decline in its year-on-year trend, affecting the global market.
However, in many industries, the technology appeared with a true perspective to support the pandemic crisis. The need for VR augmented in healthcare, gaming, education, manufacturing, entertainment, military, retail, and defense, among others. For instance, in 2020, the Kansas City University Center for Medical Education Innovation incorporated technology for medical students' training using simulations. Thus, the demand for VR in commercial industries increased significantly during the pandemic.
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Growing Potential in Healthcare Industry to Fuel Market Expansion
According to the experts’ study, healthcare is projected to witness significant disturbance across the sector with VR applications. The technology has highlighted the potential to enhance planned surgeries, healthcare provisions, patient care systems, and medical training.
Its simulated experience of replicating the real-world environs is expected to grow the demand in healthcare. Assisted robotic VR to support healthcare workers them during surgeries. It also offers surgical training to improve the required skills. For instance,
Thus, the increasing applications of VR in healthcare boost the virtual reality market growth.
Increasing Live Virtual Entertainment to Drive Market Growth
The concept of live virtual entertainment is growing globally. Individuals prefer at-home entertainment by implementing technology to view live shows and events. As the technology provides users with a real-world environment, its demand for live events, live music concerts, or sports is rising considerably. For instance,
Thus, the rising demand for virtual live entertainment is probable to fuel the virtual reality market share.
Health Concerns due to Excessive use of VR Devices to Impede the Market
Virtual reality technologies, especially virtual reality headsets, are widely used for e-sports and gaming for a unique playing experience. This excessive use of VR headsets might lead to health concerns such as dizziness, lethargy, lack of concentration, eyesight, and hearing issues. Thus, the excessive usage of these VR devices could lead to health concerns, which is expected to impact market dynamics slightly.
Growing Investments in Advanced Hardware Offerings to Drive Market Growth
The market share is segregated into software, hardware, and content in terms of components. The hardware segment will dominate the global market share during the forecast period as major companies are investing in the advancement of hardware. For instance, in May 2021, Axon released its VR-driven wireless simulator to offer hands-on training solutions.
The software will gain traction due to the increasing demand for VR technology. Growing applications such as live events, entertainment, gaming, and others, increase the software demand. The content will likely witness steady growth during the forecast period owing to rising demand for interactive virtual sessions. Industries are demanding new content for applications such as marketing, training, entertainment, gaming, and other sections.
Capability to Offer Immersive Environment to Fuel Head Mounted Display Demand
Based on the device type, the market is segmented into VR simulators, treadmills & haptic gloves, VR glasses, Head Mounted Display (HMD), and others. The HMD will lead as it provides a highly immersive experience. The demand for VR headsets connected to smartphones is rising due to cost-effective options such as Google's cardboard-based headset. HMDs are increasingly used in aviation, marketing, entertainment, and training industries. For instance, Vajro and VRM Switzerland were certified by European Union Aviation Safety Agency for virtual pilot training, providing a headset with human-eye resolution.
VR simulations are becoming popular in industries for training, design, and prototyping due to cost savings. Additionally, the gaming and entertainment sectors are also adopting VR treadmills and haptic gloves to enhance the customer experience. Thus, VR glasses in training and education will fuel the segment's growth.
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Growing Investments for VR in Gaming and Entertainment Industry to Boost the Segment Growth
Gaming and entertainment segments hold the highest shares in the market, as companies heavily invest in developing content, software, and hardware for gaming purposes. The growing popularity of virtual theme parks, museums, and arcades drives the segment growth.
Further, healthcare is expected to grow at the highest CAGR during the forecast period owing to a successful implementation of VR in healthcare, providing a visual and controlled environment for medical professionals to diagnose and treat patients. For instance, virtual simulators can understand Alzheimer’s, assist autistic patients, detect vision impairment, and others.
As per our report, the market is studied across North America, Latin America, Europe, the Middle East & Africa, and Asia Pacific. These regions are further categorized into leading countries.
North America is expected to dominate the virtual reality market share over the forecast period. The significant presence of key players in the U.S. is driving market growth in the region. In addition, various start-ups are entering the U.S. market and offering industry-specific solutions. For instance, in October 2020, a California-based small company, Sixense Enterprises Inc., launched a VR-based physical rehabilitation system called the REAL Immersive System. The U.S. government is also investing in virtual technology, which is likely to boost the market. For instance, the U.S. government and its army invested USD 11 billion in providing virtual, augmented, and mixed reality training sessions to its officials.
Asia Pacific shows rapid growth during the forecast period due to the increasing demand for immersive technologies in emerging economies. China is likely to gain maximum market share, as it is one of the major distributors of head-mounted VR devices and other hardware. In addition, the developments in 5G networks and infrastructure in China are expected to boost market growth. On the other hand, India is likely to witness significant growth owing to government initiatives and funding.
Europe is likely to show significant growth during the forecast period. The region is the early adopter of virtual solutions in the automotive industry. According to the report published by the European Commission, the European virtual and augmented reality (AR) industry is expected to increase its production value to USD 38 billion by 2020. The U.K. and Germany are likely to gain traction owing to increasing investment in the market.
Latin America is expected to gain steady growth owing to increasing government focus on advanced technologies and rapid installation of 5G infrastructure.
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The growing interest in virtual gaming and entertainment users boosts the demand in the Middle East & Africa.
Focus on Global Expansion with Innovative Products to Boost Market Share
Major players in the market are developing new and advanced solutions for customers. They also focus on improving their existing product portfolio to provide flexible solutions with unique characteristics. Additionally, the organizations aim for collaboration, partnerships, and acquisitions to strengthen their product offerings.
An Infographic Representation of Virtual Reality Market
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The study on the virtual reality market comprises major areas globally to get a better knowledge of the industry. Additionally, the research offers insights into the most recent market trends and analyses of technologies implemented worldwide. Further, it highlights the growth restrictions and elements, allowing the reader to understand the market.
CAGR of 31.0% from 2023 to 2030
Value (USD billion)
By Component, Device Type, Industry, and Geography
By Device Type
The market is projected to reach USD 165.91 billion by 2030.
In 2021, the market size stood at USD 19.44 billion.
The market is projected to grow at a CAGR of 31.0% in the forecast period.
Gaming industry is likely to lead the market.
Increasing live virtual entertainment to drive market growth.
Google LLC, Oculus (Meta Platform, Inc.), Sony Corporation, Unity Technologies, HTC Corporation, Samsung Electronics Co. Ltd., Microsoft Corporation, and others 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 remarkable CAGR.
Below is the list of companies that are studied in order to estimate the market size and/or understanding the market ecosystem
This list does not necessarily mean that all the below companies are profiled in the report. The report includes profiles of only the top 10 players based on revenue/market share.
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