The Augmented Reality and Virtual Reality Market is expected to reach USD 71.2 billion by 2028 from USD 25.1 billion in 2023, at a CAGR of 23.2 % during the 2023-2028 period according to a new report by MarketsandMarkets™. Augmented Reality (AR) and Virtual Reality (VR) are immersive technologies that redefine the way we interact with the digital and physical worlds. Whereas virtual reality market is expected to reach USD 29.6 billion by 2028 from 12.9 billion in 2023, at a CAGR of 18.0% during the 2023- 2028 period.
Many companies are investing in augmented and virtual reality industry which gives an opportunity for growth in the augmented and virtual reality market. The augmented and virtual reality market is in the development phase at present, with the presence of multiple players offering augmented and virtual reality products. North America is likely to contribute significantly to the growth of the augmented and virtual reality market. Similarly, the Europe, Asia Pacific and RoW regions are expected to be the growing market for the forecasted period.
Small enterprises pioneering augmented and virtual reality innovations across industries.
Small enterprises operating in the Augmented Reality (AR) and Virtual Reality (VR) space are dynamic and innovative companies that specialize in various facets of AR and VR technology. These smaller businesses play a crucial role in shaping the future of AR and VR by contributing to their development, deployment, and applications across a wide range of industries. Often characterized by agility and creativity, these enterprises focus on specific niches within the AR and VR ecosystem, such as content creation, software development, hardware manufacturing, consulting, and services.
A small enterprise typically involves an investment ranging from more than INR 25 lakh to less than INR 5 crore in plants and machinery. These enterprises encompass a diverse range of businesses, including service providers, grocery stores, medical shops, tradespeople, bakeries, and small-scale manufacturing units. Traditionally, customers had to physically visit stores to try on clothing or explore items like jewelry and furniture. However, augmented reality (AR) has transformed this paradigm by allowing customers to virtually try on products and preview items, offering a valuable opportunity for customers to assess products before making a purchase. Retailers incorporating AR technologies can extend their reach globally, reduce product returns, and enhance customer satisfaction. AR also facilitates exceptional customer service, as in-store shoppers can scan products to access instant information. AR proves invaluable for employee training, aiding in complex technical projects by overlaying instructional information.
Typically, AR applications are downloaded onto customers’ smartphones, utilizing computer vision technology to identify a shopper’s location within a store. Integrated store layouts and real-time stock data are then used to display relevant product details, providing a guided shopping experience. Shoppers can use their smartphones to peruse store shelves, receiving personalized product recommendations and coupons superimposed on their screens, catering to specific preferences and dietary needs in grocery stores. When shoppers point their phone cameras at merchandise, the app recognizes the products and overlays digital information on top of the displayed images.
Meanwhile, virtual reality (VR) technology is revolutionizing virtual meetings and enhancing product development. VR enables the creation of new products and the testing of store layouts in a virtual environment, seeking feedback from customers before implementing designs in the physical world. Similar to AR, VR offers businesses a novel way to reach customers beyond their immediate vicinity, hosting virtual events accessible to a global audience and setting up virtual fitting or trial rooms.
Semi- and fully immersive technologies to dominate the virtual reality market during the forecast period.
Many companies in the industry are directing their efforts toward the creation of immersive video games designed to captivate users. The utilization of VR headsets facilitates user engagement within the virtual realm. The growing desire for both semi-immersive and fully immersive VR devices is primarily driven by advancements in computing and electronic networking systems. Additionally, innovations like fully immersive VR technology, featuring Head-Mounted Display Systems (HMDS) that deliver a 360° field of view and high-resolution experiences, are anticipated to fuel the expansion of this market. Semi-immersive technology offers a moderate level of immersion in a digital environment. Users typically interact with these systems using some form of interface, such as a computer screen, projection, or a smaller-scale immersive device like a head-mounted display (HMD) or CAVE (Cave Automatic Virtual Environment). While users may feel partially immersed in the digital world, they remain aware of their physical surroundings and may not experience a complete sense of presence. Semi-immersive technology is often used in applications like gaming, simulation training, and virtual walkthroughs.
Fully immersive technology provides a high level of immersion, where users feel completely transported into a digital environment, often to the extent that they lose awareness of their physical surroundings. This level of immersion is typically achieved through advanced hardware like high-quality VR headsets and motion tracking systems that accurately replicate users’ movements in the virtual world. Fully immersive experiences aim to create a strong sense of presence, making users feel as though they are truly inside the digital environment. This technology is used in various applications, including high-end gaming, medical simulations, virtual tours, and architectural design.
Display & projectors hold the largest size of the augmented reality market during the forecast period.
Displays and projectors are pivotal components in Augmented Reality (AR) and Virtual Reality (VR) systems, shaping how users perceive and interact with digital content. In AR, head-up displays (HUDs) or waveguide-based systems seamlessly overlay digital information onto the user’s real-world view, often through transparent or semi-transparent screens, enabling context-aware interactions. Optical combiners merge real and virtual elements by reflecting or refracting light. In VR, head-mounted displays (HMDs) are employed, enveloping users in immersive digital environments through high-resolution OLED or AMOLED screens situated near their eyes, fostering a profound sense of presence. These displays are often stereoscopic, offering 3D visuals for depth perception. Projectors are less common but are used in some AR setups, casting digital information onto surfaces in the user’s field of view, enabling shared experiences or larger-scale interactions. Together, displays and projectors serve as the windows into the digital realms of AR and VR, enhancing the way users interact with and perceive the virtual and augmented elements. Markets and Markets