IMMERSIVE TECHNOLOGY MARKET SIZE AND SHARE ANALYSIS - GROWTH TRENDS AND FORECASTS (2024-2031)

Immersive Technology Market Size and Trends

The Global Immersive Technology Market is estimated to be valued at US$ 28.45 Bn in 2024 and is expected to reach US$ 135.02 Bn by 2031, exhibiting a compound annual growth rate (CAGR) of 24.9% from 2024 to 2031.

To learn more about this report, request sample copy

Rapid penetration of smartphones and advancement in VR and AR technology are driving the adoption of immersive technology across different industry verticals. Increase in demand for virtual training and education is further propelling the market growth. Immersive technology provides an interactive and engaging experience to users and is finding increased usage in gaming & entertainment, healthcare, manufacturing and various other industries. Development of 5G network and growing investment in immersive technology are some key trends that will contribute to the market expansion in coming years. Widespread application of immersive technology in e-commerce for virtual shopping and the tourism industry for virtual travel is anticipated to generate new opportunities for immersive technology vendors over the next decade.

The rising interest in augmented and virtual reality

As the technologies around augmented reality, virtual reality, and mixed reality continue to advance rapidly, interest in their applications and potential uses has skyrocketed. Immersive technologies are allowing people to experience an entirely new level of digital interactions. Workers are using AR and VR to handle complex simulations and gain remote access to information. Gamers have found unprecedented levels of engagement and realism in virtual worlds. Manufacturers are designing and testing products digitally before building prototypes. Consumers are exploring faraway places through VR videos and apps without needing to travel.

This growing fascination people have with immersive technologies is driving strong demand across different industries. Companies want to leverage AR, VR, and mixed reality to enhance training, provide remote support, boost productivity, and more. The innovative experiences possible through immersion are fueling even more interest in these transformational technologies.

Market Concentration and Competitive Landscape

Close-monitor your Competitor's Move, Get Instant Access to Actionable Tips

Training and skill development through immersive technologies

Immersive technologies offer compelling advantages for training and developing skills in comparison to conventional methods. AR, VR and mixed reality tools can create incredibly realistic simulations of complex processes and hazardous environments, allowing trainees to learn by doing in a safe, controlled digital space. This hands-on, experiential learning leads to better understanding and stronger retention of material. It also helps train large numbers of people simultaneously on a global, scalable basis. Complex processes that may be difficult, time-consuming or expensive to replicate physically can be easily simulated and practiced virtually.

Another key benefit is the ability to gain experience with rare events or conditions without having to wait for their actual occurrence. Through immersive simulations, medical students can experience treating difficult cases, aircraft technicians can learn to handle emergency scenarios, and utility linemen can practice operating heavy equipment safely in virtually any situation. Immersive technologies also make it possible to visualize and interact with 3D components, systems, and virtual prototypes during product design and development. As the capabilities of these technologies increase further with 5G and edge computing, their potential for transformational training and skills development continues growing exponentially. The demand for immersive solutions from industries worldwide is rapidly rising as a result.

Key Takeaways from Analyst:

The global immersive technology market is poised to experience strong growth in the coming years driven by decreasing prices of VR and AR devices. As the costs come down, adoption will ramp up significantly across both consumer and enterprise segments. Additionally, higher smartphone penetration and increasing smartphone processing power is also acting as an important driver as many immersive applications are delivered through mobile devices.

While declining prices and improved functionality are expanding opportunities, limited quality content remains a key restraint holding back widespread adoption at present. Content and software developers need to focus on creating compelling immersive experiences across areas like gaming, entertainment, retail, and healthcare to keep users engaged with these new platforms. Lack of strong use cases is also hindering broader commercial deployment of immersive technologies.

The North America region is emerging as the dominant market for immersive technologies due to growing interest from consumers as well as enterprise customers. Asia Pacific will also see healthy growth due to presence of major tech companies investing in this area. Growing investment in 5G rollouts will further accelerate deployment of immersive applications with higher bandwidth capabilities.

Virtual and augmented reality are disrupting industries and changing consumer behaviour by enhancing how we interact with computers and the digital world.

Market Challenges: One of the key challenges faced by the global immersive technology market is overcoming adoption barriers. While the technology has potential for growth in various sectors such as education, healthcare, retail, and more, its adoption is relatively low currently. High costs of equipment such as VR headsets, boxes, sensors, etc. pose a major barrier for individual consumers as well as small and medium businesses to invest in these technologies. Setting up an entire VR or AR environment requires huge capital investments. Limited quality content is another factor restraining mass adoption. Content creators are still experimenting with ideal formats and business models for immersive experiences. Technical issues like motion sickness also discourage some potential users. However, as the technology matures and costs start decreasing with mass production, these adoption barriers are expected to reduce significantly in the coming years.

Market Opportunities: Training and Skills Development

One of the biggest opportunities for the global immersive technology market is in the domain of training and skills development. Immersive platforms allow users to learn complex skills through interactive simulations in a safe virtual environment. This makes them well-suited for training purposes across sectors like manufacturing, healthcare, aviation, etc. VR/AR offers training techniques not possible through traditional means. For example, surgeons can practice complex procedures on virtual patients without risking lives. Pilots can experience dangerous situations inside a simulator. Industrial workers can learn to operate heavy machinery virtually before using it physically. Immersive technologies have the ability to enhance existing training programs and also develop new formats to impart skills virtually. As skills gaps emerge in different industries, immersive learning solutions are likely to witness higher adoption for training workforces of the future.

Identify Top Revenue Pockets across Segments in the Industry, Get Instant Access to the Report

Insights By Component - Driven by Advanced Capabilities, Hardware Contributes Significantly to the Immersive Technology Market

In terms of Component, the Hardware segment is estimated to hold 39.6% share of the market in 2024 owing to its advanced capabilities to deliver enhanced immersive experiences. As immersive technologies see wider adoption across industries, the demand for powerful hardware such as VR and AR headsets, wearables and spatial computing devices is surging. Hardware plays a pivotal role in bringing virtual, augmented and mixed realities to life through improved processing, graphics and sensory integration.

Leading the hardware segment are VR headsets which are witnessing widespread commercial use for training, design, automation, and more. Continuous enhancements in processing power, display resolution, and field of view along with reductions in size, weight, and cost expand VR headsets' reach. All-in-one headsets are further simplifying deployment. AR smart glasses are another emerging hardware driving growth. As they evolve into more capable platforms combining VR/AR functionality, computers could become obsolete with all experiences delivered via glasses.

Wearables including haptic suits and gloves also contribute significantly. Their ability to deliver tactile feedback elevates immersion. Developers are exploring diverse applications from medical training to virtual shopping. Spatial computing devices represent another hardware sub-segment with growth potential. As they eliminate the need for head-mounted displays and allow for gesture controls, their marketability will rise. Overall, hardware will remain the cornerstone for Immersive technologies to transform industries via blended realities.

Insights By Technology - Rapid Technology Advancements Catalyze Virtual Reality's Leadership in Immersive Domain

In terms of Technology, the Virtual Reality (VR) segment is estimated to hold 41.7% share of the market in 2024 owing to rapid advancements. Faster processing and compact architectures are enabling more realistic and detailed VR experiences. As standalone and all-in-one VR headsets become the norm, barriers to adoption are falling. Software and content are also fueling VR growth. Immersive application development platforms, creation tools, and volume of VR content are expanding exponentially.

Gaming leads commercial VR deployment and acts as a testing ground for new experiences. Enterprise and industrial usage is also rising through training, design, and collaboration. VR benefits sectors like manufacturing, engineering, and healthcare by improving training outcomes and skill transfer compared to traditional methods. Its ability to safely simulate hazardous environments provides a competitive advantage. The immersive factor is further enhancing creativity across art, design and storytelling. As presence and social capabilities strengthen in VR, new use cases are emerging.

While AR and MR show promise, technological maturity still lags VR currently. However, continued improvements in optics, displays, sensors, and computing will support their growth over the long term. Overall, VR’s current leadership in delivering convincing immersive experiences through quality hardware and wider compatibility is sustaining its segmental dominance.

Insights By End-use Industry - Diverse Industry Demand Catalyzes Gaming's Dominance in Immersive Technologies

In terms of End-use Industry, the Gaming segment is estimated to hold 45.3% share of the market in 2024 due to diverse demand across age groups and platforms. Immersive technologies are profoundly impacting how games are developed and played. VR headsets in particular are transforming the gaming experience through realistic interactive environments and neural inputs. Flagship VR titles across genres continue to push the boundaries of this medium. As standalone and untethered headsets gain share, VR gaming's accessibility is rising rapidly.

The flourishing eSports and competitive gaming markets are also driving immersive adoption. Stadium-scale XR experiences coupled with haptic accessories are bringing fans closer to live events. Cloud and multi-player gaming further incorporate social aspects. Meanwhile, AR enhances mobile gaming via interactive overlays on real-world play. Industry leaders are therefore making sizeable investments in immersive games and platforms.

Beyond hardcore gaming, casual and family titles in VR/AR are seeing increases as well. Their fun and educational merits have applications for edutainment. Simulation and strategy gaming also apply immersive realism to impart skills. Overall, gaming encompasses diverse immersive applications that no other industry currently comes close to matching. As popularity of XR games grows across profiles, the sector will remain a dominant immersive adopter and innovation incubator.

Regional Insights

To learn more about this report, request sample copy

North America has established itself as the dominant region in the global immersive technology market with an estimated 43.6% share in 2024. With heavy investments and presence of major players in the immersive technology space, the region accounts for the largest share. The U.S., in particular, has emerged as an innovation hub and continues to attract significant funding for development of immersive platforms and applications.

Some of the key factors contributing to North America's dominance include robust technology infrastructure, rapid adoption of new technologies by consumers and enterprises, and conducive government policies supporting innovation. Immersive technology startups can easily raise funds from venture capitalists in the region, fueling development. Large technology companies also invest heavily in researching and developing new immersive experiences. With a thriving gaming industry, there is widespread application of immersive technologies for entertainment.

Moving ahead, Asia Pacific is anticipated to be the fastest growing regional market. Countries like China, India, Japan, and South Korea offer immense opportunities due to their massive population base and accelerated digital transformation. Availability of cost-effective talent and components in Asia Pacific is also encouraging global industry players to expand their presence in the region.

One major factor driving the demand for immersive technologies in Asia Pacific is the rapid pace of 5G deployment. This promises to enable more powerful and engaging experiences. Additionally, the growing middle class with increasing spend on technology and entertainment further augurs well for the market. Several regional technology giants are now investing to provide localized XR content and platforms to consumers. This is expected to fuel the proliferation of immersive technologies across industries like education, healthcare, and retail in Asia Pacific.

Market Report Scope

Key Developments

• In February 2024, PROVEN Solution, an innovative venture studio founded in 2020 and owned by Proven Arabia, revealed its participation in LEAP 2024, a major technology conference taking place in Riyadh, Saudi Arabia, from March 4th to 7th. PROVEN Solution, which specializes in state-of-the-art Artificial Intelligence (AI), robotics, virtual and augmented reality solutions, plans to showcase its cutting-edge products and solutions in AI, Intelligent Process Automation (IPA) technologies, and robotics through its three divisions: PROVEN Consult, PROVEN Robotics, and PROVEN Reality.
• In October 2023, EON Reality, a global leader in virtual and augmented reality solutions focused on enhancing knowledge transfer for education and industry, announced its collaboration with Elixir Traders Limited, a company engaged in the wholesale of household goods. This partnership aims to integrate Extended Reality (XR) technology into various sectors of the U.K. market, enhancing operational procedures and promoting data-driven decision-making along with immersive interactions.
• In June 2023, Meta, the parent company of Facebook and a leader in social media and virtual reality technology, launched the Meta Quest 3, its next-generation virtual and mixed reality headset. This advanced device boasts stronger performance, higher resolution, innovative Meta Reality technology, and a more comfortable design, enhancing the user experience for both gaming and immersive applications.
• In May 2023, Ultraleap Limited, known for its pioneering work in hand-tracking technology, launched the Leap Motion Controller 2, a second-generation hand-tracking camera that enables users to interact with digital information in 3D using their hands. This advanced camera is compatible with various platforms and complementary hardware, including PCs, holographic displays, and both VR and AR systems, facilitating a more intuitive user experience across multiple applications.

*Definition: The Global Immersive Technology Market involves products and services related to augmented reality (AR), virtual reality (VR), and mixed reality (MR) technologies. This growing market includes AR and VR hardware such as head-mounted displays, motion tracking components, and 3D cameras. It also includes software development tools and platforms that enable the creation of immersive applications and experiences across various industries like gaming, enterprise training, and simulation, entertainment, education, marketing, and more. As immersive technologies continue to evolve and their applications expand, the global market size is expected to significantly increase in the coming years.

Market Segmentation

• Component Insights (Revenue, US$ Bn, 2019 - 2031)
  • Hardware
  • Software
  • Services
•  Technology Insights (Revenue, US$ Bn, 2019 - 2031)
  • Virtual Reality (VR)
  • Augmented Reality (AR)
  • Mixed Reality (MR)
  • Others
•  End-use Industry Insights (Revenue, US$ Bn, 2019 - 2031)
  • Aerospace & Defense
  • Manufacturing
  • Automotive
  • Education
  • Media & Entertainment
  • Gaming
  • Healthcare
  • Retail & E-Commerce
  • Others
• Regional Insights (Revenue, US$ Bn, 2019 - 2031)
  • North America
    • U.S.
    • Canada
  • Latin America
    • Brazil
    • Argentina
    • Mexico
    • Rest of Latin America
  • Europe
    • Germany
    • U.K.
    • Spain
    • France
    • Italy
    • Russia
    • Rest of Europe
  • Asia Pacific
    • China
    • India
    • Japan
    • Australia
    • South Korea
    • ASEAN
    • Rest of Asia Pacific
  • Middle East & Africa
    • GCC Countries
    • Israel
    • South Africa
    • Rest of Middle East & Africa
• Key Players Insights
  • Acer Inc.
  • Apple Inc.
  • AVEVA Group Plc
  • Barco NV
  • Blippar Group Limited
  • EON Reality, Inc.
  • Google LLC
  • HTC Corporation
  • Magic Leap, Inc.
  • Microsoft Corporation
  • NVIDIA Corporation
  • Qualcomm Incorporated
  • Sony Corporation
  • Unity Software Inc.
  • Vive Business (HTC Corporation)