Virtual Reality Market Research Report: By Component (Hardware and Software), By Device Type (Head-Mounted Displays, Gesture Tracking Device, Projectors and Display Walls and 3D Cameras), By Technology (Non-Immersive, Semi-Immersive and Fully Immersive), By Vertical (Consumer Electronics, Aerospace and Defense, Healthcare, Commercial, Industrial and others) - Forecast till 2027
ID: MRFR/ICT/0411-CR | February 2020 | Region: Global | 102 pages
Virtual Reality Market Overview
Virtual Reality Market is expected to reach USD 101.2 Billion by 2027, registering a 37.4% CAGR during the review period (2017–2027).
Over recent years, VR technology has made significant strides, evolving dramatically. The virtual reality (VR) market is driven by the rising demand for head-mounted display (HMD) in the gaming and entertainment industry and the implementation of VR as a part of marketing strategy.
Moreover, the increasing use of virtual reality technology in verticals, including consumer electronics, aerospace & defense, healthcare, commercial, industrial, and others, provides tremendous market growth opportunities. The healthcare sector is harnessing virtual reality capabilities to treat everything from pain to phobias. The rising adoption of VR technology in medicines is expected to boost the virtual reality industry.
COVID-19 Analysis
Virtual reality (VR) is one of the key multidisciplinary technology trends, integrating computer, various sensors, graphic images, communication, measurement, and control multimedia, artificial intelligence, and other technologies. The coronavirus pandemic has positively impacted the virtual reality market share. When the pandemic struck and travel screeched to a halt, globetrotters felt deprived.
However, various VR service companies, such as Amazon Explore and a new Airbnb virtual reality service, hit the marketplace with cost-effective and fun services. In 2020, evolving communication systems and two-way video became primary social channels. The COVID 19 has hastened innovation in many VR and virtual travel companies that have already been providing 360 technology and immersive experience to figure out how to do it on a much larger scale.
Market Dynamics
Drivers
Wide Adoption of VR Technology Drives the Market Growth
Growing demand for virtual technology led by the rising uses of head-mounted (HMD) displays in the gaming and entertainment industry drives the virtual reality market growth. Implementation of Virtual reality is finding a stronger base in theme parks offering VR coaster rides by using animation techniques. Moreover, the integration of 5G with VR and advancements in fully immersive technology foster the virtual reality market share.
Virtual reality applications in healthcare are expanding, providing many benefits such as surgery simulation, robotic surgery, and skills training. The major advantage of the technology is in training and acquiring new skills in operating procedures to be practiced in a safe environment. In the diagnostics field, virtual reality helps medical practitioners obtain better insights compared to MRI scans and other methods, eliminating the need for invasive procedures or surgeries.
Opportunities
Proliferation
of industry 4.0/ 5.0 to Impact the VR Market Growth Positively
Industry 4.0 refers to the industrial automation that allows improved communication between self-monitoring devices and production machines substantiating the integration of machine-to-machine communication (M2M) and the internet of things (IoT). Virtual reality can give the same interaction with the IoT, offering feedback mechanisms of stimulating a person's sensations to a virtual experience.
The adoption of automation in manufacturing sectors across developing regions is expected to propel the virtual reality market growth, witnessing strong demand from several industries like healthcare and automotive. It is seen that the significant demand for VR from manufacturing industries in emerging countries would offer a host of opportunities to global firms in the future.
Restraints & Challenges
High Cost of SoC integration to Restrain Virtual Reality Market Growth
Nowadays, various smart devices and electronics products have network embedded systems interconnected to devices to transmit useful measurement information and control instructions via virtual reality. However, the high cost of development due to the requirement of SoC integration is the major factor restraining the virtual reality market growth.
Also, security compliances and growing cyber-attacks are challenging market dynamics. Additionally, the lack of technical expertise poses challenges to the VR software market growth up to some extent.
Cumulative Growth Analysis
The Virtual Reality Market Share to Expand at a Strong Rate
Over recent years, VR technology has garnered extensive popularity and market prominence. The advancements in VR technology have been playing a causal role in maintaining industrial operations competitive and efficient. VR gaming creates a 3D environment for its users, allowing users to feel the physical presence in a game.
There are also virtual reality rooms that are armed with wearable computers and various other sensual components, which allow the players to view, move, and interconnect with the objects in the game. Resultantly, the global virtual reality market is expected to witness exponential growth over the next few years.
Segment Overview
The virtual reality (VR) market is segmented on the basis of component, device type, technology, vertical, and region. The component segment is sub-segmented into hardware and software. The hardware segment is further divided into semiconductors, sensors, displays, and others. The software segment is divided into software development kits, cloud-based, and others.
The device type segment is further sub-segmented into head-mounted displays, gesture tracking devices, projectors & display walls, 3D cameras, and others. The technology segment is sub-segmented into non-immersive, semi-immersive, and fully immersive. The vertical segment is sub-segmented into consumer electronics, aerospace & defense, healthcare, commercial, industrial, and others.
By regions, the market is segmented into Americas (US, Canada, Mexico, Rest-of-North America), Europe (Germany, UK, France, Italy, and Rest-of-Europe), Asia Pacific (China, Japan, India, South Korea, and Rest-of-the-APAC), and Rest-of-the-World.
Regional Analysis
The North American Market to Maintain its Winning Streak
North America has always been the market leader and could continue to maintain its winning streak throughout the assessment period. The presence of many key players, including Google, Microsoft, Facebook Inc., and others, alongside the growing industrial sector drives virtual reality market growth.
Moreover, increasing VR applications in consumer electronics and gaming & entertainment industries propel the North American VR market size. During the assessment period, the US is expected to be the leading VR market in the region, growing at a 38.05% CAGR, followed by Canada and Mexico, registering 36.01% and 34.47% CAGR, respectively.
Europe Accounts for Second Highest Share in Global Market
Europe holds the second-leading share in the global virtual reality market. Factors such as the growing media & entertainment industry and increasing VR applications in the education and healthcare sectors foster the regional market growth. The UK, Germany, and France are the major revenue contributors to the market in the region. The rising demand from the healthcare industry and manufacturing sector in the region, alongside considerable healthcare spending, boosts the virtual reality market size in the region.
APAC Accounts for a Considerable Share
Increasing investments in technology developments and the rising adoption of HMD for simulation and training purposes drive the virtual technology industry in the region. Besides, heightened demand from the burgeoning construction sector and the growth opportunities presented by end-use sectors position APAC among the key contenders globally. Japan, India, and China are the largest market for VR market in the region.
China dominates the APAC virtual reality market, accounting for a significant market share. On the other hand, the Indian VR market is expected to grow at 42.09% CAGR during the review period. The Asia Pacific VR market is projected to register a 40.56% CAGR during the forecast period, heading with the growing number of mobile-based VR application developers in the region.
Competitive Landscape
Players Focus on M&A Activities and R&D Investments to Gain a Larger Competitive Share
The virtual reality market appears extremely competitive, considering the strong presence of established industry players. Global vendors are increasingly facing fierce rivalry from each other and from local firms, who are growing aware of the industry's regulations and suppliers. Therefore, eminent players seek opportunities to deeply integrate across the extended value chain while focusing on expanding production facilities, R&D investments, and M&A activities to gain impetus.
Key Companies
- Sony Corporation (Japan)
- Microsoft Corporation (US)
- Google LLC (US)
- Facebook Inc (US)
- Qualcomm Technologies Inc.(US)
- Samsung Electronics (South Korea)
- Sensics Inc. (US)
- Vuzix Corporation (US)
- Eon Reality Inc. (US)
- Sixense Entertainment Inc. (US)
- Avegant Corporation (US)
Eon Reality, Inc. is a US-based leading provider of virtual reality software, systems, and applications for the aerospace, defense, education, energy, industrial, and medical industries. Eon's immersive gesture and handheld mobile systems and development services are extensively used in the healthcare, hospitality, and education sectors. With the help of Eon's easy-to-use no-code XR platform, businesses can create, share, and track training modules, online stores, product showcases, immersive tours, stories, and more.
Recent Developments
December 29, 2020 – The Astana Ballet Theater launched its first streaming service to produce performances in 360 degrees by using VR technologies in the Kazakh capital. Also, a special mobile application for viewing performances in the VR format was created by the company, allowing spectators to literally visit the stage of the performance among the artists by using a mobile phone or wearing VR glasses. This application can give 360-degree videos that simultaneously record a view in all directions, captured with a special camera.
December 28, 2020 – While the global pandemic continues, Atmos VR announced a new £1 million investment round to develop a 4D virtual reality entertainment and esports venue.
December 17, 2020 – MYXR Inc., a SaaS software and solutions company, announced a strategic partnership with immersive solutions studio Theia Interactive. The deal would help MYXR create XR content for its new 2021 software-as-a-service (SaaS) offerings. Additionally, the partnership with Theia would add new, high-quality materials to MYXR's planned releases, including multiple versions of MYXR Engage 2.0x, as well as the new MYXR Experience Platform 3.0.
December 16, 2020 – WRAP Technologies, Inc. (the US), an innovator of modern policing solutions, announced the acquisition of NSENA Inc., a developer and provider of a law enforcement training platform employing immersive computer graphics virtual reality with proprietary software, hardware, and content. This acquisition firmly positions WRAP in the virtual reality training market, complementing its BolaWrap law enforcement training solution.
Report Overview
Scope of the Report
The report features unique and relevant factors expected to significantly impact the virtual reality market during the forecast period. The detailed and considerable amount of information in the report would help industry players understanding the market better. The MRFR report elaborates on the historical and current trends boosting the growth of the virtual reality market. Besides, the analysis of COVID-19 impact on the virtual reality market is also included in the report.
This report examines the demand-supply scenario, pricing structure, profit margins, production, and value chain analysis influencing the virtual reality market growth. Regional assessment explained in this report unlocks a plethora of untapped opportunities in regional and domestic market places. Detailed company profiling in the region enables users to evaluate company shares analysis, emerging product lines, the scope of the product in new markets, pricing strategies, innovation possibilities, and much more.
Segmentation Table
By Component
- Hardware
- Software
- Services
By Device Type
- Head-Mounted Displays
- Gesture Tracking Device
- Projectors & Display Walls
- 3D Cameras
- Others
By Technology
- Non-Immersive
- Semi-Immersive
- Fully Immersive
By Vertical
- Consumer Electronics
- Aerospace & Defense
- Healthcare
- Commercial
- Industrial
- Others
By Region
- North America
- Europe
- Asia Pacific
- Rest of the World (RoW)
Frequently Asked Questions (FAQ) :
The virtual reality market is expected to expand at 37.4% CAGR between 2017 and 2027.
The gaming and the entertainment industries are highest end-users of virtual reality market.
Microsoft Corporation (US), Google LLC (US), and Sony Corporation (Japan) are some well-known virtual reality solution providers.
The virtual reality market in North America is expected to thrive at a 36.78% CAGR and value at USD 1.4 billion by 2027.
One of the ongoing trend of virtual reality market is its exploitation in the field of education, and travel and tourism.
Virtual Reality Market: Report Summary
The virtual reality market is anticipated to reach USD 101.26 Bn by 2027, expanding at a stellar CAGR during the assessment period (2017-2027). Technological advances in virtual reality (VR) coupled with head-mounted displays (HMDs) is anticipated to augur market growth over the forecast period. Development of games, which provide an immersive experience to gamers and enthusiasts is expected to entice users from different age groups.
Entertainment studios and their affiliate amusement parks are leveraging the VR technology to attract consumers. Prominent companies such as Microsoft Corporation, Google, LLC, and Facebook are investing in research and development to produce comfortable devices. The user experience is a factor which can influence the future of the VR market. Future applications in sectors such as education and healthcare can pave open new avenues for the market over the forecast period.
The virtual reality market has been segmented based on component, device type, technology, industry vertical, and region. On the basis of component, the market is segmented into hardware and software. In 2016, the hardware segment commanded a major share of the global virtual reality market. Demand for HMDs coupled with the falling prices of displays is like to drive the segment’s growth in 2018 and beyond. Consumer-ready headsets to experience VR can expedite the segment growth over the forecast period.
On the basis of device type, the virtual reality market has been segmented into gesture tracking devices, projectors and display walls, 3D cameras, and head-mounted displays (HMD). The HMD segment accounted for a major share of the global market in 2016. It is expected to continue its dominance over the forecast period. The gesture tracking devices segment is anticipated to gain traction due to application in defense, architecture, and design sectors. By technology, the market has been segmented into fully immersive, semi-immersive, and non-immersive. The fully immersive segment currently commands a large share of the market. This segment is expected to soar further and exhibit a 39.84% CAGR during the forecast period. Haptic gloves and other wearables are being researched by various companies to this effect. In 2018, Microsoft Corporation launched Microsoft Layout, a mobile application for VR headsets. This application lets users virtually move 3D objects on a floor plan, making it easy for architects to check their designs.
On the basis of industry vertical, the virtual reality market has been segmented into industrial, commercial, healthcare, aerospace and defense, consumer electronics, and others. In 2016, the consumer electronics segment commanded the largest share of the market. Factors credited to the segment’s success are the widespread availability of smartphones, sensors and graphic cards that support VR, and increased purchase of these items by consumers.
Regional Analysis
On the basis of regions, the global virtual reality market has been segmented into North America, South America, Europe, Asia Pacific, and the Middle East and Africa.
The North America market is anticipated to expand in size at a 36.78% CAGR over the forecast period. Continuous technical advances in technology coupled with adoption of networking technologies such as 5G and long-term evolution (LTE) are expected to offer tailwinds to the market.
The Asia Pacific market is estimated to exhibit a robust growth rate during the forecast period. Companies from various sectors are relying on VR to advertise their product to consumers. Brands such as McDonald’s and Marriott International have employed VR to garner attention and gain new followers on social media. For instance, Marriott launched the Teleporter, a VR device capable of transporting viewers to various travel destinations. It uses 360-degree video with computer-generated imagery (CGI) to make viewers feel, touch, and sense beautiful sceneries.
Competitive Analysis
Sensics, Inc (Columbia), Samsung Electronics (South Korea), Qualcomm Technologies, Inc (U.S.), Google, LLC (U.S.), Microsoft Corporation (U.S.), Sixense Entertainment, Inc (U.S.), Sony Corporation (Japan), Vuzix Corporation (U.S.), Facebook, Inc (U.S.), Avegant Corporation (U.S.), Eon Reality, Inc (U.S.), and others are prominent names in the virtual reality market. Upgrades in technology coupled with advances in experimental computing are expected to attract customers. Mergers and acquisitions, expansions, and investments by major players are growth strategies being employed to sustain their market position.
New Technological advancements in the field of virtual Reality market
A few players currently dominate the virtual reality market. Of all, Samsung Electronics is the leading market player. Samsung Electronics is the manufacturer of electronics and computer peripherals and also engages in selling and distribution of the same. The company’s primary strategy revolves around partnerships. Samsung has their reach all across the globe. The company firmly believes in acquisitions, could change the way enterprises progress.
Facebook takes the second spot. Facebook currently owns many applications and services such as Pagemodo Pagebuilder, RSS Graffiti, Huddle, and more. Facebook is on the verge of becoming one of the fastest companies to capture market value of nearly USD 250 billion. The strategy focuses on product development and partnership and expanding their footprint in various technology segments by the acquisition of key players in the market.
Google has successfully taken the third spot in virtual reality market. The company operates in the Americas, EMEA, and Asia Pacific region. Google has marked their footprint in hardware by introducing Nexus devices and released a number of hardware devices such as Home Smart speaker, Pixel smartphone, and VR headsets. The company focuses on both innovation and acquisition and is well-known for its technology.
Microsoft has acquired the 4th place. It offers applications for distributed computing environments, productivity applications, business solution applications, desktop and server management tools, software development tools and many more. The company operates globally and has offices in more than 190 countries. As on 30th June 2017, the total revenue of the company was USD 89.3 billion and had approximately 114,000 employees.
Sony Corporation occupies the last spot among the top five market players. The company has production centers, research and development engineers, and personalization & data centers across the globe including Japan, U.S., India, Taiwan, U.K., China, Germany, and North Korea among others with a strength of more than 128,400 employees. The company provides solutions that are specific and customizable, according to the client needs. Other prominent players in the market include Qualcomm, Vuzix Corporation, Sensics, Inc, Eon Reality, Avegant Corporation, and Sixense Entertainment among others.