Extended Reality Global Market Opportunities and Strategies to 2033

This report describes and explains the extended reality market and covers 2018-2023, termed the historic period, and 2023-2028, 2033F termed the forecast period. The report evaluates the market across each region and for the major economies within each region.

The global extended reality market reached a value of nearly $64.69 billion in 2023, having grown at a compound annual growth rate (CAGR) of 38.1% since 2018. The market is expected to grow from $64.69 billion in 2023 to $253.06 billion in 2028 at a rate of 31.4%. The market is then expected to grow at a CAGR of 24.2% from 2028 and reach $746.97 billion in 2033.

Growth in the historic period resulted from growing adoption of XR in gaming and entertainment, increasing smartphone penetration, rising digital transformation and growing number of internet users. Factors that negatively affected growth in the historic period were high initial cost of devices and long-term impacts of XR on mental health.

Going forward, 5G network expansion, growth of education and remote learning initiatives, increasing adoption of XR technology in the healthcare industry and global population growth and urbanization will drive the growth. Factor that could hinder the growth of the extended reality market in the future include privacy and security concerns.

The extended reality market is segmented by component into hardware, software and services. The hardware market was the largest segment of the extended reality market segmented by component, accounting for 50.3% or $32.52 billion of the total in 2023. Going forward, the software segment is expected to be the fastest growing segment in the extended reality market segmented by component, at a CAGR of 32.6% during 2023-2028.

The extended reality market is segmented by technologies into augmented reality (AR) technology, virtual reality (VR) technology and mixed reality (MR) technology. The augmented reality (AR) technology market was the largest segment of the extended reality market segmented by technologies, accounting for 53.7% or $34.77 billion of the total in 2023. Going forward, the virtual reality (VR) technology segment is expected to be the fastest growing segment in the extended reality market segmented by technologies, at a CAGR of 32.7% during 2023-2028.

The extended reality market is segmented by end-user into gaming, retail, healthcare, engineering, media and entertainment, real estate and other end-user. The gaming market was the largest segment of the extended reality market segmented by end-user, accounting for 30.6% or $19.77 billion of the total in 2023. Going forward, the healthcare segment is expected to be the fastest growing segment in the extended reality market segmented by end-user, at a CAGR of 34.2% during 2023-2028.

North America was the largest region in the extended reality market, accounting for 40.3% or $26.07 billion of the total in 2023. It was followed by Asia-Pacific, Western Europe and then the other regions. Going forward, the fastest-growing regions in the extended reality market will be Asia-Pacific and North America where growth will be at CAGRs of 33.9% and 32.5% respectively. These will be followed by Western Europe and South America where the markets are expected to grow at CAGRs of 31.7% and 25.4% respectively.

The extended reality market is fairly fragmented, with a large number of small players in the market. The top ten competitors in the market made up to 20.71% of the total market in 2022. Meta Platforms, Inc was the largest competitor with 4.63% share of the market, followed by Microsoft Corporation with 4.11%, QUALCOMM Incorporated with 2.84%, Sony Group Corporation with 2.76%, Goertek Inc. with 1.91%, Seiko Epson Corporation with 1.17%, Samsung Electronics Co. Ltd. with 1.09%, Accenture Plc with 1.05%, Adobe Inc with 0.83%, and SoftServe Inc with 0.32%.

The top opportunities in the extended reality market segmented by component will arise in the hardware segment, which will gain $93.47 billion of global annual sales by 2028. The top opportunities in the extended reality market segmented by technologies will arise in the augmented reality (AR) technology segment, which will gain $99.34 billion of global annual sales by 2028. The top opportunities in the extended reality market segmented by end-user will arise in the gaming segment, which will gain $64.81 billion of global annual sales by 2028. The extended reality market size will gain the most in the USA at $63.09 billion.

Market-trend-based strategies for the extended reality market include launch of new products for extended reality development, integration of AI in extended reality to shape the intelligent and interactive XR applications, focus on increasing investment to deepen commitment towards extended reality, integration of 3D mapping and transparent displays in extended reality and strategic partnerships and collaborations among market players to drive innovation in the market.

Player-adopted strategies in the extended reality market include focus on expanding operational capabilities through strategic acquisitions, strengthening operational capabilities through new product launches and strategic partnerships, collaborations and investments to better serve the industry and strengthen position.

To take advantage of the opportunities, the analyst recommends that extended reality companies focus on product innovation to propel metaverse vision, integrate AI for enhanced user experience, make strategic investments for market expansion, innovate 3D mapping integration for enhanced user experience, and use virtual reality (VR) technology for unprecedented growth. expand into emerging markets, continue to focus on developed markets, strategic partnerships for market expansion, and strategic expansion of extended reality distribution channels. provide competitively priced offerings, focus on strategic pricing for optimizing extended reality value, participate in trade shows and events, continue to use B2B promotions, focus on elevating extended reality presence through strategic promotion, focus on healthcare and gaming end-use segments for maximum growth and focus on tailored marketing strategies to connect with end-users in extended reality.