| Study Period | 2019 - 2032 |
| Market Size in 2024 | USD 38.3 Billion |
| Market Size in 2025 | USD 52.7 Billion |
| Market Size by 2032 | USD 514 Billion |
| Projected CAGR | 38.5% |
| Largest Region | North America |
| Fastest Growing Region | Asia-Pacific |
| Market Structure | Fragmented |
|
Explore the market potential with our data-driven report
The global extended reality market was valued at $38.3 billion in 2024, and it is predicted to reach $514 billion by 2032, advancing at a 38.5% CAGR during 2025–2032. The industry is driven by the growing use of connected devices and smartphones, increasing collaborations among market players, and rising adoption of AR and VR.
In India, the growing internet penetration and the increased government initiatives toward digitization are the key factors driving the market. Further, the rising adoption of AR/VR in numerous industries, including automotive, retail, entertainment, and construction, is propelling the growth of the industry. Moreover, the growing deployment of 5G and rising investments in AR/VR startups are boosting the market.
In medical settings, XR platform allows patients to observe surgical operations before they actually undergo one, as well as provide appropriate training and guidance for surgeons, enhancing trust and comfort level and reducing the cost of care. It can be used to overlay real- time data into live procedures, cure some mental conditions and to minimize dependency on pain medication.
The hardware category dominates the market with a share of 55% in 2024. This is due to the increasing penetration of smart devices and the reduced cost of components, including cameras, displays, sensors, and position trackers.
On the other hand, service category is growing with the highest CAGR during the forecast years. The rising adoption of XR devices has further raised the need for services, such as integration & maintenance, training, and repair, owing to which the demand in this category will grow at a rapid pace.
Three components have been analyzed:
Based on device type, mobile is the largest category with a market share of 70% in 2024 and it is also the fastest-growing category too. This is due to its easy availability, affordability, and continuous technological advancements. Additionally, the rising usage of smartphones for AR/VR applications is boosting the growth of this segment.
Further, these device types are included in the report:
The single-user category holds the major share of 70% in 2024. This can be due to the fact that the currently most organizations are offering platforms that support a single-user interface with virtual environment. However, in terms of growth, the multi-user category is exhibiting fastest CAGR of 35.6% during the forecast period. This can be because of the rising adoption of multi-user AR and VR devices in industries such as retail, manufacturing, aerospace & defense, entertainment, and education, for training and education purposes.
This segment is divided into two categories:
Business engagement category holds the largest share of 60% in 2024. This is due to the increased adoption of immersive technologies in organizations for employee training and development purposes. Furthermore, the increasing use of XR technologies to solve business issues and create innovative solutions to meet client needs will also to drive the growth of the category in the years to come.
On the other hand, the consumer engagement category is projected to witness faster growth, in the coming years. This can be mainly ascribed to the increasing demand for VR and AR technologies among consumers, which is primarily for gaming and entertainment purposes. The development of AR/VR apps for travel & tourism is further supporting the growth in this category.
Delivery models covered in the report are:
Based on application, AR category holds the major share in the market in 2024. This is because of the high demand for AR devices and applications in the healthcare, retail, and e-commerce industries. Additionally, rising investments in AR worldwide, along with the growing demand for technology among individuals, are further driving the category growth.
Besides, the MR category is rapidly growing with the highest CAGR during the forecast period. This is majorly due to the growing demand for MR in aerospace & defense for training and simulation purposes and the huge funding in the technology by organizations for product planning to enhance consumer experience. For example, in June 2023, the Ryan Aerospace and Vertex Solutions have been given a contract to deliver mixed reality simulators for U.S. Air Force aviators training on the T-38C jet.
Below are the applications which have been analyzed:
The industrial & manufacturing category dominates the market in 2024. This is ascribed to the extreme utilization of immersive technologies for training and development purposes in heavy industries such as manufacturing, mining, and oil & gas. Further, post implementation of XR technologies, organizations in the sector have informed increased productivity and operational efficiency. The gaming category is fastest-growing category in the market in the near future. This is associated with the quick adoption of AR and VR technologies in the gaming industry.
Further, industries are divided into following categories:
Drive strategic growth with comprehensive market analysis
Globally, North American extended reality market holds the largest share of 40% in 2024. The key factor contributing toward the market growth is the high adoption of immersive technologies for training purposes in industries, including oil & gas, mining, and construction. Furthermore, the presence of many companies that are investing heavily in such technologies to introduce advanced solutions is another important factor for the growth of the industry. The surge in demand for AR/VR in organizations for training & development purposes along with the growing investment in immersive technologies across industries, including education, e-commerce, and retail, is projected to further drive the market growth in the coming years.
Since around 2012, the U.S. military started using VR technology for training. Many military trainings in the U.S. are already conducted using simulations rather than real exercises, with a concentration on flying, battlefield, and medical training. This is the most practical application of the technology because simulations are considerably cost effective than actual fighter jet training, which is why the military was an early consumer of the platform. Combat training, mission rehearsal, concept creation, material design and testing, medical training, and personnel selection are all examples of XR military applications.
Moreover, Europe holds the second largest share in 2024. The market is mainly driven by the growing technology adoption in the region. The increasing use of AR and VR for training and simulation in automobile manufacturing and the growing penetration of immersive technologies among youngsters for gaming and entertainment purposes are the key reasons for the regional market growth.
The European Commission is funding research and innovation in order to create a European XR ecosystem. The advancement of technology, such as 5G/6G, data, artificial intelligence, edge, and cloud computing provides advanced and powerful XR capabilities. The European Commission is also supporting cross-pollination between disciplines and domains, with a particular emphasis on industry and SMEs, to help Europe become a mainstay in XR.
Moreover, in LATAM, the industry is boosting due to the rising deployment of immersive technologies in industries for training purposes and among consumers for entertainment purposes. The increasing government as well as private investment in immersive technologies, along with the rising focus of key market players in the region.
The regions and countries analyzed for this report include:
The extended reality market is fragmented in nature as numerous players are operating in the market. Major leaders are involved into mergers & acquisitions, partnerships, collaborations, product launches to maintain their position. The main business strategy for the market is to manufacture locally which minimize the operating cost and expand the market sector.
Want a report tailored exactly to your business need?
Request CustomizationLeading companies across industries trust us to deliver data-driven insights and innovative solutions for their most critical decisions. From data-driven strategies to actionable insights, we empower the decision-makers who shape industries and define the future. From Fortune 500 companies to innovative startups, we are proud to partner with organisations that drive progress in their industries.
Working with P&S Intelligence and their team was an absolute pleasure – their awareness of timelines and commitment to value greatly contributed to our project's success. Eagerly anticipating future collaborations.
McKinsey & Company
India
Our insights into the minutest levels of the markets, including the latest trends and competitive landscape, give you all the answers you need to take your business to new heights
We take a cautious approach to protecting your personal and confidential information. Trust is the strongest bond that connects us and our clients, and trust we build by complying with all international and domestic data protection and privacy laws
Customize the Report to Align with Your Business Objectives
Request the Free Sample Pages