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The global virtual reality (VR) market size was USD 3.10 billion in 2019 and is projected to reach USD 57.55 billion by 2027, exhibiting a CAGR of 44.3% during the forecast period.
The rising application of virtual reality across industries such as healthcare, automotive, manufacturing, entertainment and more is driving the market. For instance, US-based VRPhysio offers virtual environment physical therapy exercises at home and provides the data to doctors in the clinics. Also, healthcare VR is used for surgical training, patient education, clinical assessment, rehabilitation, and more.
The implementation of virtual simulators in product designing and prototyping reduces hefty investments. For instance, automobile manufacturers can use VR for finalizing the car design instead of manufacturing it for prototyping. The growing demand for virtual training among organizations owing to its immersive user experience is expected to boost the market. For instance, Stanford Medicine uses virtual education to provide training of emergency cases to the health workers.
COVID-19 Boosted the Demand for Virtual Meetings and Training
COVID-19 has highly impacted the work culture across the industries. The lockdown has significantly raised the demand for virtual technology. The increasing adoption of virtual meets, conferences, exhibitions, gatherings are spurring the demand for immersive solutions. For instance, LAVAL hosted its exhibition online with the help of VR glasses and 3D graphics. The company offered participants from multiple locations to meet and showcase their products virtually at the exhibition.
Industries such as automotive, manufacturing, and entertainment are also adopting the technology to cater to the business requirement. The virtual simulator can support designing the product from a remote location. The COVID-19 is expected to further boost the demand for online lectures and other learning practices. Thus, the pandemic is expected to reboot the technology adoption and likely to surge the market growth.
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5G Connectivity to Offer New Potential of Virtual Reality
The widespread implementation of the 5G network is boosting the adoption of virtual technology. The 5G services offer high-bandwidth and ultra-low latency. This is supporting the adoption of the technology for its various applications such as entertainment, training, simulation, and more.
The 5G connectivity is offering new opportunities for the companies to boost the revenue scale. The network is bridging different verticals of industries such as telecom, virtual reality provider, gaming, sports, entertainment, and more to offer new advanced solutions. For instance, BT Plc and Nokia have collaborated and are researching the 5G impact on the live virtual broadcaster. For the study, the companies showcased live footage of the UEFA cup match via immersive headsets. Companies are focusing on bringing the live immersive experience for eSports viewers by deploying 5G capabilities. Thus, 5G is likely to boost the market trend during the forecast period.
Rising Demand for Virtual Training Across Industries to Drive the Market
Industries such as automotive, education, healthcare, aerospace & defense, and more are significantly investing in virtual training and education solutions. For instance, in the automotive industry the virtual training module offers workstation training for new joiners to avoid accidents. Ford in the year 2015, reported a reduction in employee injuries by 70% with the help of virtual training sessions. It provides hands-on training for newcomers using the virtual simulator, headsets, glasses, and more. The retail industry has now started implementing VR technologies to maintain customer relationships. For instance, in 2018, Walmart virtually trained 200 employees for its Black Friday sale to provide support to the clients. The company invested in 17,000 Oculus Go headsets for its 4,700 US stores to provide support for the employees.
Also, the healthcare industry is utilizing virtual training solutions across its services. Training helps the healthcare providers in improving the operating accuracy with zero error. Similarly, in gaming and entertainment, to reduce the injury risk, NFL and other American Football teams are using the technology for training. This is expected to drive the market in the forthcoming years.
Advancements in Military and Defense to Boost the Market
The technology revolutionized virtual designing solutions by replicating the real environment that is ideal for the defense sector. The technology offers beforehand experience to tackle high-risk environments. Similarly, the virtual training sessions for the soldiers help in developing strategies in an extreme circumstance. For instance, in early 2020, the UK Ministry of Defense has implemented a virtual simulator platform to provide a wider training program for the armed forces. Similarly, the US army is working on building a synthetic training environment by 2021 to prepare soldiers for real combat scenarios.
The technology is helping the countries by offering a battlefield like environment to train the soldiers. For instance, the Republic of Korea embraces virtual reality technology to train soldiers. Thus, technology is likely to gain vast opportunities with the development of the defense industry.
Requirement of High Speed and Computation Power Might Hamper the Market Development
The technology demands robust hardware components and high computing power. The majority of current desktop accessories are not compatible with applications. Similarly, most of the head mounted display are wireless and consume high energy, thus requiring high-energy batteries for long-duration operations. In markets such as gaming and entertainment, it is necessary to have devices with long battery life. Further, the highly connected devices and components require high-speed network bandwidth such as 5G. Thus, the challenge of catering suitable speed and power for the operation might hinder the market growth.
Hardware Segment is Expected to Dominate the Market
Based on components, the market is categorized into hardware, software development, and content. The hardware segment is expected to dominate the global virtual reality market share during the forecast period. The increasing capabilities of smartphones and other smart electronic devices are booting hardware demand.
The software is likely to gain traction owing to the rising demand for immersive technology. The increasing application such as gaming, entertainment, live events and more is enhancing the software demand. Whereas, the content segment is likely to witness steady growth during the forecast period owing to the increasing demand for interactive environment virtual sessions.
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Increasing Adoption of Head Mounted Display to Propel Market Growth
Based on device type, the market is categorized into head mounted display (HMD), VR simulator, VR glasses, treadmills & haptic gloves, and others. The technology offers the most immersive environment through the head mounted devices. With technological development, the demand for smartphone connected headsets is growing owing to low-cost investment. For instance, Google LLC offers a low-cost drawing board-based Google Cardboard that connects through smartphones. The adoption of HMD is significantly growing in industries such as gaming, entertainment, healthcare, automotive, and others. For instance, NextVr has entered an agreement with Fox Sport to be a virtual reality broadcaster to cover all its events.
The VR simulator is getting highly implemented for training, designing, and prototyping across industries as it helps in reducing the expenses. For instance, Nissan collaborated with Haptx to provide realistic car designing simulation to reduce time and money investment. Similarly, with the increasing demand, gaming and entertainment industries are vastly adopting treadmills and haptic gloves. This is likely to ensure a highly immersive environment for the customers. The adoption of VR glasses for training and education is expected to grow during the forecast period.
Increasing Application in Healthcare and Automotive to Boost the Market
The industries covered in the market are Gaming, Entertainment, Automotive, Retail, Healthcare, Education, Aerospace & Defence, Manufacturing, and Others. The adoption of technology in the automotive industry is to majorly cater to the training and education of engineers and technicians. Similarly, the implementation of VR simulators for test driving is boosting showroom customer engagement. For instance, Toyota designed TeenDrive365, a virtual driving simulator to provide driving experience to the student before driving on roads.
The technology has been effectively implemented across the healthcare industry. It provides visual and controlled environments for healthcare workers to perform or diagnose the issue. For instance, in 2016, a doctor in the US utilized Google Cardboard to create 3D images of a baby’s heart to perform operations. The gaming and entertainment segment is expected to dominate the market during the forecast period. The rising demand for theme parks, virtual museums, gaming arcade is further boosting the market growth. Similarly, the retail and education industries are steadily adopting technology for various applications. This is likely to boost the virtual reality market in the near future.
Geographically the market is analyzed across five major regions including North America, Europe, Asia Pacific, the Middle East and Africa, and Latin America.
North America is expected to dominate the market. The US is likely to grow rapidly owing to the significant presence of prominent players in the country. The government of the US is also investing heavily, that is further boosting the market. For instance, the US Department of Agriculture’s (USDA’s) Food Safety and Inspection Service (FSIS) implemented virtual training sessions on public health veterinary.
Asia Pacific is likely to show rapid growth during the forecast period owing to the increasing developments in emerging economies. China is likely to gain maximum market share. China is one of the major distributors of head mounted devices. Also, the adoption of the 5G networks is boosting the virtual reality market growth in China. India is likely to witness significant growth owing to government initiatives and funding. The campaigns such as ‘Make in India’ and ‘Vocal for Local’ are encouraging the small scale enterprises. For instance, AjnaLens raised funds of USD 1.5 Mn from Maharashtra Defence and Aerospace Venture Fund to enhance virtual and augmented reality capabilities.
Europe is likely to show significant growth during the forecast period. Europe is the early adopter of virtual solutions in the automotive industry. According to the report of the European Commission, the European virtual and augmented reality industry is expected to increase its production value to USD 38 billion by 2020. The UK and Germany are likely to gain traction owing to the increasing investment in the market.
Latin America is expected to gain steady growth owing to rising internet penetration. Further, the increasing number of interests in VR-enabled gaming and entertainment is boosting the demand in the Middle East and Africa.
Key Players to Emphasize on Creating More Advanced Products
The prominent vendors of the market such as Google LLC, Oculus (Facebook LLC), HTC Corporation, Sony Corporation, Autodesk Inc, Apple Inc. among others are aiming to provide advanced virtual solutions. Companies such as HTC Corporation, Oculus, Sony Corporation are highly investing in further developments in its head-mounted devices. The players are entering into strategic acquisition and partnerships to expand their customer reach. For instance, Oculus’s (Facebook LLC) recent acquisition of Beat Games and Sanzaru Games showcases the company’s interest in the gaming industry. Similarly, the company is investing in upgrading its software versions for providing better experience.
May 2020 – Facebook LLC Oculus launched advanced virtual remote work applications on Quest and Rift platforms. Along with this the company has updated software such as hand tracking, guardian system, and more by further integrating with the Facebook platform.
May 2020 – Facebook LLC Oculus announced the development of a new Quest VR headset, with refresh rate up to 90Hz. The new product will have four external cameras, versus five on the Rift S, and six degrees of freedom, to enable walking in any direction.
An Infographic Representation of Virtual Reality Market
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The market report highlights leading regions across the world to offer a better understanding of the user. Furthermore, the report provides insights into the latest VR industry trends and analyzes technologies that are being deployed at a rapid pace at the global level. It further highlights some of the growth-stimulating factors and restraints, helping the reader to gain in-depth knowledge about the market.
Value (USD Billion)
By Device Type
The global Virtual Reality market is projected to reach USD 57.55 billion by 2027.
In 2019, the market was valued at USD 3.10 billion.
The market is projected to grow at a CAGR of 44.3%.
The hardware segment likely to lead in the market
The rising demand for virtual training across industries is boosting the market growth.
Microsoft Corporation, Autodesk Inc., Oculus (Facebook LLC), Unity Technologies HTC Corporation, and Google LLC. are the top players in the market.
North America region is expected to hold the highest market share.
The head-mounted display is expected to grow with the highest CAGR.
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