Extended Reality Market Expected to Reach $446.6 Billion by 2031—Allied Market Research

According to a new report published by Allied Market Research, titled, “Extended Reality Market," The extended reality market was valued at $33 billion in 2021, and is estimated to reach $446.6 billion by 2031, growing at a CAGR of 30.1% from 2022 to 2031.

Extended reality is often referred to as virtual reality (VR) and augmented reality (AR). The goal of the technology is to integrate or mirror the real world with a "digital twin world" that can converse with it.  Virtual reality and augmented reality are expanding quickly and are used for a variety of purposes, including entertainment, marketing, real estate, training, and remote work.  Applications for extended reality are becoming more popular in both personal and business settings. In many firms, there is a need to improve the user experience. It shows a significant impact on market demand. In addition, service providers benefit from the consumer experience. One essential element that will improve the industry is the requirement for having great user experiences. Users of the XR platform risk having a hallucinogenic experience. It transports users to a completely different digital environment. The investment is increasing because of its enormous potential. The industries of education, retail, tourism, gaming, and healthcare are market innovators. Furthermore, head pose monitoring technology is in high demand. The market for extended reality is increasingly in demand thanks to these technologies. In addition, eye-tracking cameras and sensors are some of their innovations that are highly sought-after in the market. The extended reality (XR) industry has undergone tremendous growth as a result of all these important forces.   

Furthermore, surge in investments in extended reality and increasing adoption of XR in healthcare industry primarily drive growth of the extended reality market. However, immoderate use of XR device has negative health effects and worldwide economic downturn because of COVID-19 hamper market growth to some extent. Moreover, continuous 5G technology advancements are expected to provide lucrative opportunities for market growth during the forecast period.

On the basis of component, hardware segment dominated the extended reality market in 2021, and is expected to maintain its dominance in the upcoming years, owing to rise in enterprises who are investing heavily in the hardware to provide personalized XR experience and improvising the designs as per changing demands across the globe. However, software segment is expected to witness highest growth, owing to enable businesses to utilize the rich 3D CAD data in extended reality (XR) in a completely automated manner by supplementing growth of the global extended reality industry.

Region-wise, the extended reality market size was dominated by North America in 2021 and is expected to retain its position during the forecast period, owing to the increased use of smartphones and other connected devices in gaming, media and entertainment, healthcare, and other sectors aiding the growth of the extended reality market. However, Asia Pacific is expected to witness significant growth during the forecast period, owing to numerous benefits offered by the new immersive technologies, which is expected to fuel the market growth in this region. 

The COVID 19 pandemics have an impact on international industries. The market's difficulties are the lockdowns and restrictions. In addition, delivery, technology, and distribution problems are frequent at this time. The XR market saw a drop in demand throughout the early stages. However, in some areas, the need has begun to increase. Business reliance on AR, VR and XR platforms has increased. Due to the unanticipated circumstance of lockdowns in important areas, the ongoing epidemic has raised the need for extended reality devices. Since the COVID-19, many firms' employees work from home, which raises the demand for virtual meetings, training, and conferences. The pandemic has impacted extended reality gadget production all around the world as well. The pandemic's catastrophic effects on the manufacturing sector have put a stop to the global supply of extended reality gadgets.  

Tools like AR, VR, and MR have emerged as a result of the pandemic to enable distant employment and allow for virtual shopping. During COVID-19, AR technology held the largest market share in 2020. With the use of these immersive platforms, people may converse, make purchases, and interact socially. AR and VR apps can assist end users in escaping the seclusion of the COVID-19 shutdown by facilitating online learning and opening access to cultural events and activities. These drivers have significantly contributed to market growth. 

Key Findings of the Study

• By component, the hardware segment accounted for the largest extended reality market share in 2021. 

• On the basis of technology, the virtual reality (VR) segment generated the highest revenue in 2021. 

• On the basis of end user, the gaming segment generated the highest revenue in 2021. 

• Region-wise, North America generated the highest revenue for extended reality market forecast in 2021 

The key players profiled in the extended reality market analysis are as Accenture Plc, Qualcomm Incorporated, Adobe Inc., Alphabet Inc., Microsoft Corporation, HTC Corporation, Softserve Inc., Unity Technologies, Sony Corporation, and Facebook. These players have adopted various strategies to increase their market penetration and strengthen their position in the extended reality industry.