Extended Reality (XR) Market - Forecasts from 2023 to 2028

The extended reality (XR) market is projected to grow at a CAGR of 35.27% to reach US$95.438 billion in 2028 from US$11.514 billion in 2021.

Extended reality is the fusion of real-world interaction with computer-generated images as well as virtual environments. Extended Reality is, in essence, a superset of Augmented Reality (AR), Virtual Reality (VR), and Mixed Reality (MR). With the aid of VR training, students may engage in true-to-life interactions with both people and objects. Through a phone, tablet, or headset, AR training adds interactive, digital aspects to a live, real-world setting. MR combines cutting-edge computer technology, graphics, and input devices to mix the physical and digital worlds. The entertainment sector, sales and marketing, home and real estate tours, education, training, and simulation are just a few applications of this vast technology.

This market is witnessing significant growth as a result of the increasing need for simulation techniques across various end-use sectors.

One of the main reasons why AR has become popular in recent years is the significant advancement in the merging of audio and digitized imagery in the actual world using words, animations, and photos. In many different industries, XR can be utilized as a virtual environment, particularly for simulation because it offers a secure and similar setting. For instance, it offers new prospects for medical professionals and has a bright future, particularly for contemporary healthcare companies. Without endangering patients' lives, the application of extended reality technology in the medical field is lowering costs and improving patient outcomes. Before beginning any medical operation, extended reality technology can assist surgeons in visualizing the intricacies of a patient's body to help them explore the target organs and make the procedure risk-free. The extended reality (XR) market environment has seen rapid innovation thanks to the exponential growth in smartphone penetration and technological improvements, which has led to an increase in demand. As a result, major industry players are spending a large sum of money to create XR projects and products. For instance, in May 2021, Apple spent over US$410 million on II-VI, a Texas-based producer of optical technology, to create smart glasses that could serve as platforms for VR applications.

The expensive cost of producing and selling XR sets as well as privacy concerns limit the market growth.

The XR technology is highly expensive. The cost is high because these gadgets combine a number of technologies and necessitate a large amount of machinery to produce. Since XR sets are more expensive, fewer people can afford them, which lower sales for the company making them and discourage investors from investing their money in XR. For businesses in this industry, creating the hardware for XR devices is another hurdle. The expense of this equipment goes up since the gear needs to be compact, and able to handle a lot of data rapidly and efficiently. Users and businesses both struggle with the issue of privacy. A lot of private information is required to establish a user-rich environment since XR devices generate a framework that is based on the user's requirements. The expense of storing such data is high for the business, and user concerns about privacy can arise.

Key Developments

• In December 2022, PORTALX, a new virtual reality (VR) Kiosk powered by a wholly-owned subsidiary, SynthesisVR Inc., was introduced by XR Immersive Tech Inc., an industry leader in Social Entertainment, Virtual Reality (VR), and Augmented Reality (AR) content and experiences. Virtuawerks and SynthesisVR have worked together to create PORTALX. The system includes cutting-edge next-generation hardware, a cutting-edge VR headset, numerous cash and cashless payment options, and a sizable content library.
• The Supreme Committee for Delivery & Legacy and droppLabs, a branch of dropp Group, collaborated to develop an innovative, interactive digital fan experience incorporating the FIFA World Cup 2022 tournament mascot. The fan experience was introduced alongside the multinational marketing & events company FischerAppelt at Al Bidda Park in the center of Doha and is now accessible to all spectators inside stadiums and worldwide on their mobile devices. Fans can experience and interact with the FIFA World Cup 2022 mascot from their mobile phones for the first time ever with dropp's exclusive XR technology, which is backed by 8th Wall, without having to download an app or any other additional software.
• To provide a collaborative offering to the AR/VR industry, Crunchfish and SpectreXR inked review agreements for each other's software solutions in December 2022. With the help of OctoXR from SpectreXR and Crunchfish's XR Skeleton solutions, any AR/VR device can quickly be equipped with a potent object interaction solution.

North America has a major share of the global XR market due to the abundance of key market players, whereas the Asia Pacific region is predicted to experience rapid growth.

In the forthcoming years, it is anticipated that the extended reality industry in North America will expand dramatically. This is mostly because numerous vendors, like Qualcomm and Microsoft, among others, have made major investments in market developments. The markets for augmented reality (AR), virtual reality (VR), and mixed reality (MR) have been among the most prevalent in developed nations like the US as the majority of the businesses creating these technological improvements are situated in the US. In the Asia market, the gaming industry is expected to offer a wide range of opportunities, even the other industrial sectors, such as healthcare, education, mass media, and entertainment, are expected to create noteworthy opportunities. Due to the intensifying demand, together with the exponential growth of smartphone penetration, growth of 5G, and developments in computer technology, the Asia Pacific extended reality (XR) market environment has seen an increase in innovation.

Market Segmentation:

By Offering

• Virtual Reality (VR)
• Augmented Reality (AR)
• Mixed Reality (MR)

By Component

• Hardware
• Software & Services

By Enterprise Size

• Small and Medium-sized Enterprises
• Large Enterprises

By End-User

• Education
• Retail
• Industrial and Manufacturing
• Healthcare
• Media and Entertainment
• Others

By Geography

• North America
• USA
• Canada
• Mexico
• South America
• Brazil
• Argentina
• Others
• Europe
• Germany
• France
• United Kingdom
• Spain
• Others
• Middle East And Africa
• Saudi Arabia
• Israel
• UAE
• Others
• Asia Pacific
• China
• Japan
• India
• South Korea
• Indonesia
• Taiwan
• Others