Virtual Reality (VR) Market Analysis North America, APAC, Europe, Middle East and Africa, South America - US, China, Japan, Germany, UK - Size and Forecast 2024-2028

Virtual Reality (VR) Market Forecast 2024-2028 

The Virtual Reality (VR) Market size is projected to increase by USD 64.72 billion at a CAGR of 28.3% between 2023 and 2028. The market's momentum is significantly influenced by the increased affordability of VR gear, a shift that has broken down previous barriers to entry. This reduction in cost, driven by recent technological advancements and economies of scale within major companies, has paved the way for wider adoption. Meanwhile, the rise of social VR spaces shapes the landscape, though concerns persist about potential learning quality dilution in virtual isolation. To address this, companies are pioneering collaborative learning platforms within immersive environments. These dynamics impact various sectors, from real estate agencies to the entertainment and sports industries, driving forward amid the pandemic crisis.

The proliferation of virtual reality (VR) technology, including devices like Gesture-Tracking Devices (GTD) and Head Mounted Display (HMD), across semi & fully immersive, non-immersive, and commercial segments underscores the transformative potential of this technology. In this landscape, platforms like PropVR, Quest 2, Unity Virtual Reality Development Software, and REAL Immersive System are pivotal, reshaping industries and organizational strategies alike.

What will be the size of the Market During the Forecast Period?

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Market Segmentation by End-user

The enterprise segment is estimated to witness significant growth during the forecast period. This can be referred to as an artificial environment created with software and presented to users in such a way that they perceive it as a natural environment. In addition, it does not interact with the real world. It creates a whole new virtual experience that mimics real-life experiences, usually via a headset.

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The enterprise segment was the largest segment and was valued at USD 5.07 billion in 2018. Moreover, technological advances in the hardware of this segment are likely to increase the adoption of the products among users. For example, in May 2021, HTC Vive launched two VR headsets and pro tools for enterprises. Therefore, such new product launches in this hardware segment are likely to fuel the growth of this segment. Furthermore, the number of users for the content is increasing, owing to the high adoption of this technology in the gaming, entertainment, retail, sports, and travel industries. Hence, such factors are fuelling the segment, which in turn will drive the market during the forecast period.

Market Segmentation by Component

The increasing product launches will fuel the hardware segment, which in turn will increase the market. The hardware comprises tethered head-mounted displays (HMDs), standalone HMDs, and screenless viewers. In addition, these are used in various industries, such as healthcare, entertainment, education, and others. Moreover, educators are increasingly utilizing technology to deliver a higher quality of teaching in several educational fields. Furthermore,  technology offers students a more visually appealing and interesting lesson that can be provided at a lower cost. In addition, high visual fidelity and improved trackers are added in VR. Hence, such factors are fuelling the growth of this segment which in turn will drive the market growth during the forecast period. 

Regional Overview

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North America is estimated to contribute 35% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period. The market in North America is fuelled by factors including the presence of key companies, growing investments in this technology from key companies, the rising adoption of technologically advanced applications among consumers, and substantial research activities to increase the application of technologies are driving the market in the region.

In addition, the US and Canada are the leading contributors to the regional market. Moreover, the presence of key players in the region is likely to drive the growth of the market in North America.  For instance, several companies, such as Alphabet, Facebook Inc., and Microsoft Corp., have established a strong presence in the US and are heavily investing in this technology. Hence, such factors are driving the market in North America during the forecast period.

Market Dynamics and Customer Landscape

Market dynamics are driven by the increased affordability of VR gear, previously a substantial barrier to market expansion, now mitigated by technological advancements and economies of scale. Premium-priced VR headsets have seen reductions, complemented by Google's cardboard and Samsung's VR-compatible smartphones, contributing to price declines. Social VR spaces are on the rise, although concerns persist regarding learning quality in virtual isolation. Companies are innovating collaborative learning platforms to address this challenge. However, standardized hardware and software frameworks remain lacking, hindering seamless technology integration and widespread adoption across industries, exacerbated by hardware fragmentation and interoperability issues.

Overcoming these challenges is imperative for unlocking the market's full potential and ensuring sustained growth. Within this landscape, VR technology is reshaping industries such as healthcare, gaming, automotive, and entertainment, with VR simulators and virtual theme parks offering immersive experiences. Key players include PlayStation, Xbox, and emerging technologies like REAL Immersive System and Microsoft HoloLens 2. AI applications are increasingly integrated into VR environments, shaping a three-dimensional world poised for the Metaverse.

Key Market Driver

One of the key factors driving the market is the increased affordability of VR gear. Earlier, these hardware products were extremely expensive to purchase, which was a big barrier to the expansion of the market. However, due to the recent developments in technology and the economies of scale possessed by major companies, the cost of this gear has been reduced by a significant figure.

Moreover, many companies providing VR headgear at premium prices have cut their prices and developed commercial versions of the headset. In addition, the advent of this cardboard by Google and Samsung VR gear compatible with smartphones is the major factor contributing to the decline in prices. Hence, such factors are positively impacting the market which in turn drives the market during the forecast period.

Significant Market Trends

A key factor shaping the market is the increasing number of social VR spaces. In a virtual environment, users are isolated from the real physical world which has the possibility of bringing down the quality of learning, as collaborative learning plays an effective role in effective and efficient learning. Therefore, to overcome this challenge, many companies are providing platforms that enable collaborative learning in this environment. Hence, such factors are positively impacting the market which in turn drives the market during the forecast period.

Major Market Challenges

The lack of standardized hardware and software frameworks is one of the key challenges hindering the market. The absence of standardized hardware and software frameworks has harmed the global market, hampering the seamless development, integration, and widespread adoption of technologies across various industries. In addition, this lack of standardization has resulted in challenges related to interoperability, compatibility, and development complexity, stifling the potential and expansion of the market.

Moreover, in the domain of hardware, the absence of standardized specifications of devices has led to fragmentation and interoperability issues. Furthermore, manufacturers of VR headsets and peripherals often utilize disparate specifications and technologies, leading to a lack of uniformity and compatibility between devices. For instance, different VR headset models may incorporate diverse move motion controller or display resolutions, thereby complicating the creation of content that can seamlessly cater to a wide array of devices. Hence, such factors are hindering the market during the forecast period.

Market Customer Landscape

The Market forecasts include the adoption lifecycle of the market research and growth, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth and trends strategies.

Global Market Customer Landscape

Who are the Major Companies?

Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.

Baidu Inc: The company offers virtual reality VR headset called QIYU 3, under its subsidiary called iQIYI Inc.

DPVR: The company offers DPVR E4 PC virtual reality gaming headset.

Lenovo Group Ltd: The company offers HTC Vive headset.

The Market  growth and forecasting report also includes detailed analyses of the competitive landscape of the market and information about 20 market companies, including:

• 3D Systems Corp.
• Advanced Micro Devices Inc.
• Alphabet Inc.
• Apple Inc.
• HTC Corp.
• Meta Platforms Inc.
• Microsoft Corp.
• Osso VR Inc.
• Pico Technology Ltd.
• Samsung Electronics Co. Ltd.
• Sony Group Corp.
• StarVR Corp.
• Unity Software Inc.
• Valve Corp.
• Varjo Technologies Oy
• Virtuix Inc.
• FOVE Inc.

The market growth analysis and report of qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.

Market Analyst Overview

The market is experiencing rapid growth across various sectors. The three-dimensional environment created by VR glasses, VR gloves, and VR bodysuits are revolutionizing industries such as the gaming sector, entertainment sector, and instructional training. From training pilots and defense personnel to educating technicians in the automotive industry, VR is reshaping how skills are acquired.

In the healthcare industry, VR is being used for VR exposure therapy to address mental health issues. Virtual platforms facilitate meetings and enable policies & strategies to be discussed remotely. Event organizers utilize VR for immersive experiences, while the architecture and planning sectors employ it for visualization.

Real-estate agencies utilize VR for virtual property tours, while the entertainment and sports industries leverage it for live virtual entertainment experiences. Major players like the Shanghai Disney Resort incorporate Head-Mounted Display (HMD) devices and Gesture-Tracking Devices (GTD) for semi and fully immersive experiences.

Amidst the coronavirus outbreak, VR provides a safe alternative for live events. From the 3D virtual world of Google Cardboard to the PlayStation Headset, VR is diversifying across organizations and sectors, promising a dynamic future.

Segment Overview

The market research report forecasts market growth by revenue at global, regional & country levels and provides a market analysis and report of the latest trends and growth opportunities from 2018 to 2028.

• End-user Outlook
  • Enterprise
  • Consumer
• Component Outlook
  • Hardware
  • Software
• Geography Outlook
  • North America
    • The U.S.
    • Canada
  • Europe
    • The U.K.
    • Germany
    • France
    • Rest of Europe
  • APAC
    • China
    • India
  • South America
    • Chile
    • Argentina
    • Brazil
  • Middle East & Africa
    • Saudi Arabia
    • South Africa
    • Rest of the Middle East & Africa

Virtual Reality (VR) Market Scope
Report Coverage	Details
Page number	168
Base year	2023
Historic period	2018-2022
Forecast period	2024-2028
Growth momentum & CAGR	Accelerate at a CAGR of 28.3%
Market Growth 2024-2028	USD 64.72 billion
Market structure	Fragmented
YoY growth 2023-2024(%)	27.45
Regional analysis	North America, APAC, Europe, Middle East and Africa, and South America
Performing market contribution	North America at 35%
Key countries	US, China, Japan, Germany, and UK
Competitive landscape	Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks
Key companies profiled	3D Systems Corp., Advanced Micro Devices Inc., Alphabet Inc., Apple Inc., Baidu Inc., DPVR, HTC Corp., Lenovo Group Ltd., Meta Platforms Inc., Microsoft Corp., Osso-VR Inc., Pico Technology Ltd., Samsung Electronics Co. Ltd., Sony Group Corp., StarVR Corp., Unity Software Inc., Valve Corp., Varjo Technologies Oy, Virtuix Inc., and FOVE Inc.
Market dynamics	Parent market analysis, Market forecasting, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and Market condition analysis for the forecast period.
Customization purview	If our market report has not included the data that you are looking for, you can reach out to our analysts and get segments customized.

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What are the Key Data Covered in this Market Research Report?

• CAGR of the market during the forecast period
• Detailed information on factors that will drive the growth of the market between 2024 and 2028
• Precise estimation of the market size and its contribution to the market in focus on the parent market
• Accurate predictions about upcoming market trends and analysis and changes in consumer behavior
• Growth of the market across North America, APAC, Europe, Middle East and Africa, and South America
• A thorough analysis of the market’s competitive landscape and detailed information about companies
• Comprehensive analysis of factors that will challenge the growth of market companies 

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