Virtual Reality Market 2020 and Forecast 2021-2027

                                          
Report Overview: Virtual Reality Market


The global virtual reality market size was valued at USD 09.21 billion in 2020 and looks set to grow at a compound annual growth rate (CAGR) of 19.5% from 2021 to 2027. Virtual reality (VR) is a computer interface that delivers an immersive 3-dimensional visual experience to the users. It creates a simulated environment using high-performance PCs and sensory equipment, such as gloves and headsets. Apart from the gaming and entertainment industry, this technology has been used for training and educational use cases. Educational use cases include training surgeons and airline pilots and helping scientists to understand complex problems, such as the structure of protein molecules. Besides, Expeditions app, offered by Google Inc., allows teachers to guide students through 360 degrees scenes and 3D objects.

Learning and training and scientific visualization are among the most significant applications of virtual reality technology. It reduces investments and brings enrichment across a wide range of industries in terms of providing extreme training situations. It is used for training purposes in several industries, including healthcare, machine operations, and corporate training. Moreover, it reduces the training budget in the form of equipment longevity and logistics reduction.

Furthermore, architecture and planning have emerged as a potential application in this market. Virtual reality technology helps decision-makers visualize the outcomes of proposed architectural design and urban planning. Furthermore, incorporating virtual reality into architecture helps to identify errors early in the design process and saves time and money. Tech-savvy architectural firms are using technologies, such as ThyssenKrupp Elevator Technology, to speed up and simplify improvements to home mobility. The company uses Mixed Reality (MR) in a VR-enabled HoloLens Head Mounted Display (HMD), which is used in trade fairs and pop-up sales outlets to meet the customers’ mobility needs.

In conjunction with the entertainment industry, virtual reality has recognized potential opportunities with rapid developments in smart consumer electronic devices. The internal segments of the entertainment industry, including theaters, gaming, location-based environment, and music, have started experiencing the benefits of its implementation. For instance, London Thorpe Park (Merlin Entertainments), an amusement park in the U.K., uses the VR holograms in its rides to ghost riders. Moreover, Bandai Namco Entertainment, Inc., a Japanese multinational video game development company, launched Mario Kart VR, which creates a truly immersive experience for the player.

COVID - 19 Impact Insights: Virtual Reality Market

The World Health Organization (WHO) has declared the coronavirus disease (COVID - 19) outbreak a pandemic, causing an immense impact on humankind and businesses. This pandemic has emerged as an opportunity for the computer and related technologies to fight against the outbreak as several tech giants and start-ups are working to prevent, mitigate, and contain the virus. Besides, the outbreak has led to a rise in virtual tech conferences and meet-ups since several organizations have canceled their events and conferences. For instance, tech giant Microsoft has announced to organize all its events digitally till July 2021, including its flagship Microsoft Ignite and Microsoft Build 2020.

Furthermore, remote learning and training with virtual reality have become essential use cases due to the pandemic to minimize the risk of exposure. For instance, EON Reality (U.S.), a multinational virtual and augmented reality software development company, has partnered with the University of the Western Cape (UWC) to create an Interactive Digital Center (IDC) in a bid to help mitigate the impact of the pandemic on the education sector. This partnership is anticipated to bring training solutions and simulations for several industries across Cape Town (South Africa).

Application Insights: Virtual Reality Market

The commercial application segment lead the market with a share of 52.5% in 2019. This is attributed to the rapid adoption of virtual reality systems in the gaming and entertainment industry. Rapid adoption of smartphones has led to the implementation of VR technology in commercial applications. For instance, British Museum launched a VR experience of the British Museum in 2017, which provides users an unparalleled immersive digital experience by using mobile device or computer and a headset.
Other consumer applications in the entertainment industry include VR art gallery, VR theme park, and music VR experience. The gaming industry is one of the most popular applications and has witnessed significant growth in recent years. This is attributed to the fact that virtual reality games can be played on standalone systems that can power the virtual reality headsets. Moreover, advanced immersive experience and availability of multiple gaming content have fueled the adoption of virtual reality in the gaming industry.
Device Insights
In terms of revenue, the head-mounted display (HMD) segment lead the market with a share of 61.4% in 2019. This is attributed to the flexibility and variety available in HMDs, including self-contained, tethered, and hybrid HMDs. HMD demonstrates a wide range of use cases, such as display of interactive virtual images and deployment of augmented reality (AR). The chief HMD applications include training and simulation, aviation and military, engineering, and research.

The gesture-tracking device (GTD) segment is expected to register the highest CAGR of 24.3% over the forecast period 2021-2027. It is anticipated to witness a notable shift in its demand in the years to come. The GTD device segment includes large-screen monitors, virtual reality projectors, and multiple projection systems. Visual gesture recognition systems are emerging technologies for HCI (Human-Computer Interaction) as they allow more intuitive and immersive interaction. Typically, these systems are based on the skeleton information analysis, which is inferred from near-infrared imagery. For instance, Google Inc. offers an open-source platform framework, called MediaPipe, to provide high-fidelity finger and hand tracking and enable the hand gesture control.

Technology Insights: Virtual Reality Market

In terms of revenue, the semi and fully immersive segment lead the market with a share of 79.4% in 2019. This is attributed to surging preference of HMD-based VR devices. Semi and fully immersive systems rely on high-processing PCs, high-resolution displays, and hard simulators. These components partially or entirely replicate the design of real-world environments. There are several use cases of semi and fully immersive technology in entertainment, education, construction, automotive, and aviation. For instance, the aviation industry uses semi-immersive virtual reality for the training of pilots. Boeing, an American aerospace company, uses hard flight simulators for the reevaluation and training of piloting skills.

Non-immersive technology provides users a computer-generated environment without any immersion into a virtual world. Such systems rely on display, computer or video game console, and input devices, such as keyboards, mouse, and controllers. The advantage of using non-immersive systems is higher accessibility and efficiency of the network management system. However, non-immersive technology is limited to a few applications, such as gaming, healthcare, and design, due to its 2-dimensional digital content perception.

Component Insights: Virtual Reality Market

The hardware segment lead the market with a share of 68.8% in 2019. This is attributed to increasing penetration of smartphones and other smart electronic devices across the world. The hardware segment combines the console (PC or smartphone), input devices, and output devices. The advent of untethered virtual reality devices, such as untethered headsets provided by HTC Vive Focus, Oculus Go, and Lenovo Mirage Solo, has boosted the growth of the hardware segment.

The software segment is anticipated to witness the fastest growth over the forecast period. The software segment is responsible for analyzing incoming data, managing I/O devices, and generating proper feedback. Virtual reality software creates an immersive 3D environment that can be used for product prototyping or training. Some of the internal segments of software are training software, application development software, simulation software, gamification software, virtual tour software, segmented reality software, game development software, and learning experience platform software.

Regional Insights: Virtual Reality Market

Asia Pacific lead the VR market with a share of 41.4% in 2019. This is attributed to the technological advancements in Southeast Asian countries. For instance, Japan has introduced 5G commercial services in 2019, which has led to the strategic initiatives taken by telecommunication companies to offer VR/AR viewing platforms utilizing 5G connectivity. Besides, Japan’s Ministry of Economy, Trade, and Industry (METI) is a strong advocate of new technologies and approves grants for content creation that leverage the technology for the promotion of services or products in tourism. Furthermore, favorable initiatives by the governments, such as funds and investments to benefit VR companies, are also encouraging the adoption of virtual reality technology in the region.
Europe is anticipated to expand at the fastest CAGR of 23.3% over the forecast period. This growth is attributed to increasing early adoption of virtual reality technology innovations in dynamic application areas. It has gained prominence over the past years due to the development and launch of innovative VR headsets targeted primarily for the gaming community in the region. However, advancements in immersive technology have widened the scope of the technology in several other applications, such as education, healthcare, military, and retail, and e-commerce.

Key Companies & Market Share Insights: Virtual Reality Market

Vendors are focusing on enlarging their customer base in the industry. Therefore, they taking several strategic initiatives, such as mergers & acquisitions, partnerships, and collaborations, with other major players in the industry. For instance, in April 2020, Apple Inc. has announced that it is planning to acquire NextVR Inc., a U.S.-based VR company. This acquisition is expected to propel Apple’s VR initiatives for sports and entertainment. Similarly, in February 2020, Facebook Technologies, LLC’s division Oculus announced that it has acquired SANZARU, INC., an American video game development company. This acquisition is anticipated to expand the virtual reality gaming offerings of Facebook Technologies, LLC. Some prominent players in the virtual reality market include:

Key companies Profiled: Virtual Reality Market Report

 	
Barco
 	
 CyberGlove Systems Inc.
 	
Facebook Technologies, LLC
 	
Alphabet, Inc.
 	
HTC Corporation
 	
Ultraleap Limited
 	
Microsoft; Samsung Electronics Co., Ltd.
 	
Sensics, Inc.
 	
Sixense Enterprises Inc.

This report forecasts revenue growth at the global, regional, and country levels and provides an analysis of the latest industry trends and opportunities in each of the sub-segments from 2016 to 2027. For this study, Trusted Business Insights has segmented the global virtual reality market report based on device, technology, component, application, and region:

Device Outlook (Revenue, USD Million, 2016 - 2027)

 	
Head-mounted Display (HMD)
 	
Gesture-tracking Device (GTD)
 	
Projectors & Display Wall (PDW)

Technology Outlook (Revenue, USD Million, 2016 - 2027)

 	
Semi & Fully Immersive
 	
Non-immersive

Component Outlook (Revenue, USD Million, 2016 - 2027)

 	
Hardware
 	
Software

Application Outlook (Revenue, USD Million, 2016 - 2027)

 	
Aerospace & Defense
 	
Consumer
 	
Commercial
 	
Enterprise
 	
Healthcare
 	
Others