Augmented Reality and Virtual Reality Market Size & Share Analysis - Trends, Drivers, Competitive Landscape, and Forecasts (2024 - 2030)

AR and VR Market Trends & Growth Drivers

Growing Focus of Businesses on Aesthetics of AR and VR Devices Is Market Trend

• AR and VR devices, such as , HUDs, and HMDs, offer a high degree of flexibility and mobility to their users. For example, AR displays can be used anywhere as they do not block the view of the real world. Mobile VR headsets too allow for considerable movement in a controlled environment.
• These devices are robust in their computing capabilities, and they can be used with smartphones and tablet PCs. The application areas for AR and VR technologies are numerous, and companies are exploring ways to integrate them in different fields.
• Companies operating in the market are increasingly focusing on the aesthetics of these devices in order to make them voguish, to maximize their reach in different applications. The versatility and uncomplicated use of these devices are responsible for their growing popularity and wide-scale usage.
• VR_MUSASHI focuses on combining the technological expertise of its programmers with the talent of VR developers and graphic designers in terms of product conceptualization and aesthetics. This allows the company to come up with enhanced and aesthetically pleasing products. The company also creates VR and AR immersive aesthetic experiences for projects in the fields of education, entertainment, arts & architecture, automotive, aviation, PR & marketing, travel, music & video, and product design.

Increasing Penetration of Smartphones and Tablet Computers Is Key Driver

• AR and VR technologies are fast reaching the masses through different platforms. In this regard, the increasing penetration of smartphones and tablet computers among consumers is providing a substantial platform for these technologies. With the rapid increase in smartphone ownership across the world, these devices are being considered a potential hardware interface for AR and VR products.
• By 2023, the number of smartphone users globally increased to 6.92 billion, marking a 36.49% increase from 2019. Thus, companies operating in the AR and VR market are increasingly tapping the resourcefulness of these media to launch their products through various mobile application stores.
• Some manufacturers of AR and VR devices are offering SDKs for creating apps for smartphones. Besides, companies are providing commercial solutions in the form of mobile- and tablet-based AR and VR devices and technologies for interior designing, architecture, education, furnishing, and e-commerce. Samsung Gear VR and HTC Vive are some of the examples of smartphone-powered VR devices.
• One of the key reasons VR and AR products can work in conjunction with smartphones is the powerful nature of these devices. They carry similar components of AR or VR devices with a few add-ons. Additionally, smartphones can be used as input devices for controlling the VR environment, especially for gaming applications.

Potential Health Risks Are Major Restraint

• Although beneficial in a lot of applications, AR and VR technologies have potential health risks (physical and emotional) and may impact the wellbeing of users. A certain percentage of users have experienced anxiety and stress after using VR headsets.
• Other health issues reported by the users are nausea, motion sickness, and severe eyestrain, if closed headsets are worn for a prolonged period.
• Moreover, fully immersed VR headsets completely disconnect the user from the real environment. In addition, a prolonged focus of the eye on the display can cause retinal radiation, which is a potential cause of eye cancer. These health concerns, if not addressed, can act as an inhibitor and affect the adoption of AR and VR technologies in the future.

AR and VR Industry Outlook

Type Insights

• The AR technology is projected to grow at the higher CAGR, of 26.0%, during 2025–2030, as well as hold the largest market share. The increasing focus of companies on developing innovative methods to capitalize on the potential of the AR technology and delivering a unique and engaging experience to end users is projected to fuel this demand over the forecast period.
• The increasing penetration of portable devices, such as smartphones and smart glasses, as well as the subsequent rise in the use of mobile AR technologies to deliver a more-immersive experience, is projected to drive the market in the near future.
• Moreover, manufacturers use AR-based apps for assembly operations, manufacturing functions, production line functions, task analysis, and problem-solving. As a result, the increasing need for remote support and collaboration from businesses involved in optimization and workflow management is predicted to fuel the market in this category throughout the projected period.
• The demand for AR devices and their applications in healthcare are rising. These devices may be used to provide a surgeon with a virtual picture of a patient's body parts, allowing them to examine their condition. This can help the surgeon perform a less-intrusive surgery. Additionally, AR is used for enhancing fitness, teaching difficult subjects to medical students, training physicians, managing pharmacies, and caring for and supporting patients.

During the study, we analyzed two types in the report:

• AR (Larger and Faster-Growing Category)
  • Marker-Based AR
    • Passive marker
    • Active marker
  • Marker-Less AR
    • Model-based tracking
    • Image-based processing
• VR
  • Non-Immersive
  • Semi- and fully immersive

Offering Analysis

• The hardware category held the larger market share, of around 64%, in 2024. This is due to a significant dip in the prices of hardware devices, their high popularity in the gaming industry, and easy availability.
• It will generate higher revenue in the coming years due to the spurring demand for high-quality entertainment content and the emphasis of companies on improving their display features and offering customized items to enterprises.

Below are the major offerings:

• Hardware (Larger Category)
  • Sensors
  • Cameras
  • Position trackers
  • Displays and projectors
  • Semiconductor components
  • Others
• Software (Faster-Growing Category)
  • Software development kits (SDKs)
  • Cloud-based services
  • AR software functions
  • VR content creation

Device Type Insights

• Based on AR device type, HMDs lead the AR devices market, accounting for over 66% revenue in 2024. The demand for HMDs is expected to witness notable growth in the coming years owing to the increasing need for lightweight displays, advancements in technology, and the rising patent portfolio of companies.
• AR-based HMDs are gaining popularity in industries such as tourism, automotive, military, gaming, and education. Besides, the surging adoption of mobile AR and the increasing investments by large technology companies will drive the demand for AR-based HMDs in the near future.
• Among VR devices, the HMDs category held the largest share, of around 66%, in 2024, and it is expected to continue dominating the global VR devices market in the coming years. This will be on account of the high adoption of HMDs in the gaming and tourism sectors.
• The gesture-tracking devices category is expected to witness the fastest growth, at a CAGR of 19.2%, during the forecast period. The launch of such advanced devices is helping broaden the appeal of VR, particularly among enterprises and educational institutions.

The following device types are included in the report:

• AR
  • Head-mounted displays (HMDs) (Largest and Fastest-Growing Category)
  • Head-up displays (HUDs)
  • Handheld devices
• VR
  • Head-mounted displays (HMDs) (Largest Category)
  • Gesture-tracking devices (Fastest-Growing Category)
  • Projector and display walls

Application Analysis

• Consumers led the global AR devices market, accounting for 56% revenue, in 2024. The market in is category is expected to witness notable growth in the coming years. This is primarily attributed to the rising awareness of these advanced technologies and the burgeoning demand for more-interactive and immersive games.
• In the VR devices market, the consumer category held the largest market share, of 53%, in 2024. Further, among consumers, the gaming was the leading category, it is also expected to be the faster-growing category in the market, demonstrating a CAGR, during the forecast period.
• The increase in demand for AR and VR games can be attributed to the efforts made by companies to cater to the growing needs of gamers. Some of the key players in this domain are Oculus VR, Samsung Electronics Co. Ltd., Sony Corporation, HTC Corporation, FOVE Inc., Nintendo Co. Ltd., and Electronic Arts Inc.

Below are the major applications analyzed in the report:

• AR
  • Consumer (Largest Category)
    • Gaming
    • Sports and entertainment
  • Commercial
    • Offline education and e-learning
    • In-store retail and e-commerce
    • Tourism
  • Enterprise (Fastest-Growing Category)
    • Healthcare
    • Automotive
    • Aerospace
    • Defense
    • Others (including agriculture, construction, IT and telecom, and transportation and logistics)
• VR
  • Consumer (Largest Category)
    • Gaming
    • Sports and entertainment
  • Commercial
    • Offline education and e-learning
    • In-store retail and e-commerce
    • Tourism
  • Enterprise (Fastest-Growing Category)
    • Healthcare
    • Automotive
    • Aerospace
    • Defense
    • Others (including agriculture, construction, IT and telecom, and transportation and logistics)

North America Is Largest Market

• Geographically, APAC is the fastest-growing market, advancing at a CAGR of 22.7% during 2025–2030. This is due to the rising investments in the commercial and defense sectors, growing healthcare and automotive industries, and rapid industrialization in countries such as China, Japan, India, and South Korea. Being home to several developing economies and a large number of display panel manufacturers, the region is expected to witness an increasing adoption of these technologies in the coming years.
• North America held the largest market share, of around 34%, in 2024. The governments of the U.S. and Canada are investing heavily in the deployment of such technologies in numerous industries, including aerospace & defense, healthcare, and education, for training purposes.
• The U.S. accounted for the larger revenue share in the region owing to the high investment in these technologies and the presence of several leading technology companies, such as Google LLC, Microsoft, and Apple Inc.

The regions and countries analyzed in this report include:

• North America (Largest Regional Market)
  • U.S. (Larger Country Market)
  • Canada (Faster-Growing Country Market)
• Europe
  • Germany (Largest Country Market)
  • U.K.
  • France
  • Italy (Fastest-Growing Country Market)
  • Spain
  • Rest of Europe
• Asia-Pacific (APAC) (Fastest-Growing Regional Market)
  • China (Largest Country Market)
  • Japan
  • India (Fastest-Growing Country Market)
  • South Korea
  • Australia
  • Rest of APAC
• Latin America (LATAM)
  • Brazil (Largest Country Market)
  • Mexico (Fastest-Growing Country Market)
  • Rest of LATAM
• Middle East and Africa (MEA)
  • Saudi Arabia 
  • South Africa
  • U.A.E. (Largest and Fastest-Growing Country Market)
  • Turkey
  • Rest of MEA

Market Nature – Fragmented

The global AR and VR market has a high degree of fragmentation owing to many domestic and international players. The continual appearance of new entrants is impacting the established and new service providers. In recent years, the market players have been involved in product launches in order to attain a significant position.

AR and VR Industry News

• In June 2023, DPVR announced a partnership with Clique Games to enhance the VR gaming experience.
• In May 2023, Lenovo announced that its new ThinkReality VRX all-in-one VR headset is now available for purchase in select markets worldwide.
• In May 2023, Himax Technologies Inc. announced plans to unveil a color-sequential front-lit LCoS for advanced AR glasses, at Display Week 2023.
• In February 2022, Sony Corporation signed an agreement with Niantic Inc., which develops and provides AR mobile games, for a joint collaboration in the area of auditory AR for headphones.
• In August 2022, DPVR announced that Beenoculus, a VR equipment service integrator at 5G Summit Brazil, has unveiled a new 3 Dof VR headset built around DPVR’s P1 Pro device.
• In June 2022, DPVR and EZVR created a social metaverse, Polygon World, which was launched on DPVR Assistant.
• In February 2022, Sony Corporation and KDDI Corporation announced the success of two technological demonstrations with 5G standalone mobile network (*1) for PlayStation game streaming with and 8K live-streaming. These demonstrations were conducted with Xperia smartphones.