The global extended reality market was valued at around US $48.78BN in 2022 and is expected to reach US $752.54BN by 2030 with a CAGR of 34.21% during the forecast period.
Extended Reality (XR) is a relatively new idea, which combines state-of-the-art technology including Augmented Reality (AR), Virtual Reality (VR), and Mixed Reality (MR). Mobility options are offered via extended reality, which is widely accessible through the majority of technological gadgets. The word "XR" refers to a broad category of computer-generated environments that combine the virtual and real worlds to provide consumers throughout the globe with an immersive experience.

In 2020, XR goods and services were purchased for USD 18.8 billion globally. Businesses can use XR to create a platform that facilitates productive employee work. Growing use of XR reduces operating costs and, by making full use of all available resources, increases corporate productivity by 10% to 20%. Growing use of the XR approach contributes to providing customers with high-engagement and interactive real-world experiences globally, which boosts sales and increases brand exposure. Also, globally, the concept of live virtual entertainment is gaining traction. Attending live events or shows via technology is preferred by consumers over at-home entertainment. The increased ability of customers to engage with the actual world through technology has led to a significant increase in demand for live events such as concerts, shows, and sports. Furthermore, throughout the course of the forecast period, the market is anticipated to expand as a result of growing usage of gesture computing, a tendency towards the miniaturisation of intelligent devices, advancements in technology, and various business growth strategies. The number of sensors and electrical systems that can be integrated into a person's body will continue to decrease as miniaturisation and smart technology progress. The trend towards miniaturisation is driven by smart gadgets and numerous other Internet of Things applications.

Drivers

Rising demand for VR devices for gaming and entertainment applications

In the world of gaming, virtual reality and alternate reality games offer a futuristic perspective. By using XR, consumers can interact with data and analytical representations of games from the past or present in a way that suits them best. In a similar vein, the entertainment sector is increasingly using virtual reality headsets to provide an immersive experience by allowing users to view 3D things from various perspectives. Using the VR headset to establish an emotional bond with the user is becoming more and more common. This increases the need for virtual reality headsets in applications for gaming and entertainment, which supports market expansion. Also, market players are actively developing and launching a range of products in VR, catering to the requirements of gaming and entertainment industries and consumer base. For instance, in 2023, Meta unveiled its new Quest 3 virtual and mixed reality headset. In addition to being 40% thinner than its predecessor, the Quest 3 has colour mixed reality, which combines aspects of virtual and augmented reality.

Challenges

High costs associated with implementation, installation and maintenance

Users can test and exchange virtual duplicates of datasets created via extended reality with other users. But obtaining the fine details of real-world photos and specialised models presents difficulties for this technique. Providing a high-quality XR experience can be costly, especially when touch sensors and headsets are taken into account. This raises the overall cost of implementation and could impede the expansion of the Extended Reality (XR) business.

Trends

5G Integration with Extended Reality

The integration of 5G technology with extended reality (XR) is a transformative development that significantly enhances the capabilities and experiences within virtual reality (VR) and augmented reality (AR) applications. 5G networks provide significantly higher data transfer speeds, lower latency, and increased capacity compared to previous generations. This translates to faster and more reliable connections, enabling smoother and more responsive XR experiences.

The research and development in the integration of 5G with extended reality (XR) are actively ongoing. Research has focused on leveraging the low-latency capabilities of 5G to enhance XR experiences, especially in applications that require real-time interactions. Edge computing is being explored to bring computational resources closer to the end-users, reducing latency for XR applications. Also, to support diverse XR applications with varying requirements, researchers are working on dynamic QoS management systems. This involves adapting network parameters in real time to ensure that XR applications receive the necessary bandwidth, latency, and reliability for optimal performance.

Additionally, there have been significant developments by the market players across the glove, integrating 5G with XR, which is likely to have a positive impact on the market growth during the forecast period. For instance, in 2023, with the primary objective of creating and testing immersive experiences centred around work, home, health, and entertainment, U.K. carrier BT Group established a new testbed. The telco stated in a release that it is now open to working with customers and technology partners on the testbed, which will make use of both private and public 5G networks and the 5G network of U.K. carrier EE. Additionally, according to BT, the testbed aims to investigate how new features like better localization, cloud-rendering, and network exposure functions interact optimally with 5G networks to facilitate the expansion of mixed reality use cases. Also, in 2022, Nreal, a company focused on augmented reality, launched the Nreal Light AR glasses. While not exclusive to 5G, the glasses leverage 5G connectivity for high-quality streaming and low-latency experiences. This demonstrates how XR hardware manufacturers are considering 5G integration.

COVID -19 Impact on Extended Reality Market

The COVID-19 pandemic has had a notable impact on the extended reality (XR) industry, influencing both the demand for XR technologies and the ways in which they are utilized.  With lockdowns and social distancing measures in place, businesses sought ways to maintain operations and facilitate remote work. XR technologies, particularly augmented reality (AR) and virtual reality (VR), have been used to create virtual meeting spaces, collaborative environments, and immersive training experiences. This has accelerated the adoption of XR for remote collaboration and communication. With physical events and conferences being cancelled or postponed, there was a surge in the use of XR for virtual events. VR platforms were employed to create immersive virtual conferences, trade shows, and exhibitions, providing an alternative to traditional in-person gatherings.

Moreover, the closure of schools and universities led to increased interest in XR technologies for remote and immersive learning. Educational institutions turned to VR and AR to create engaging and interactive content, virtual classrooms, and educational simulations. The pandemic also accelerated the integration of AR in e-commerce and retail. AR-powered try-on experiences, virtual showrooms, and product visualization tools gained popularity as consumers shifted towards online shopping during lockdowns. Hence, as the aforementioned factors imply, the COVID – 19 pandemic had a positive impact on the growth of global extended reality market

Extended Reality Market Segmentation

By Technology

Based on technology, the global extended reality market is bifurcated into AR Technology, and VR Technology and MR Technology. VR technology is expected to witness the fastest growth rate during the forecast period, with the CAGR of about 37%. In the world of gaming, virtual reality and alternate reality games offer a futuristic perspective. By using XR, consumers can interact with data and analytical representations of games from the past or present in a way that suits them best. In a similar way, the entertainment sector is increasingly using virtual reality headsets to provide an immersive experience by allowing users to view 3D things from various perspectives. Using the VR headset to establish an emotional bond with the user is becoming more and more common. This increases the need for virtual reality headsets in applications for gaming and entertainment, which supports market expansion.

By Offering

Based on offering, the global extended reality market is bifurcated into Hardware and Software. In 2022, the software segment held the largest share of the extended reality market, accounting for about 62% and is expected to continue its dominance during the forecast period. The wide scale use of various extended reality technologies, including AR, VR, and MR, is responsible for the segment's domination. Retailers like Walmart and IKEA, for example, use AR/VR apps to improve their consumers' shopping experiences. Additionally, the popularity of AR/VR gaming apps has put more pressure on software developers to create cutting-edge and creative gaming apps. In the upcoming years, this is anticipated to boost the market's expansion.

By Device Type

Based on device type, the global extended reality market is bifurcated into AR Devices, VR Devices, and MR Devices. AR Devices is expected to dominate the market during the forecast period, accounting for about 40%. Technological developments and advancements in AR Devices is expected to supplement the market growth during the forecast period. For instance, in 2023, Chinese tech firm Xiaomi joined Microsoft and Google by releasing a prototype of augmented reality glasses. The product is named Xiaomi Wireless AR Glass Discovery Edition, which has gesture controls, and it will be the latest in a line of AR devices that includes Microsoft's HoloLens and Google Glass Enterprise.

By Application

Based on application, the global extended reality market is bifurcated into Consumer, Commercial, Enterprises, Healthcare, Aerospace & defence, Energy, Automotive and Others. Over the course of the forecast period, the automotive application is anticipated to increase at the fastest rate, with the CAGR of about 41%. The expansion might be ascribed to automakers' heightened attention to improving the user experience. Car manufactures use XR solutions to train their employees. For instance, Ford established a virtual laboratory for prototype creation, while Maruti Suzuki established a chain of simulation-based training facilities throughout India. Moreover, automobile showrooms employ AR and VR technologies to let clients test-drive new car features in a secure setting and from a distance. The team uses these tools as well to expedite the repair procedure. For example, Porsche technicians use AR glasses to view schematic diagrams of cars instantly, which reduces service resolution times by 40%. As a result, growth in the segment is anticipated in the future. 

By Region

North America, Europe, Asia Pacific, the Middle East & Africa, and South America are the five regions that make up the worldwide extended reality market. Because there are many market participants in North America, the region has the biggest extended reality market share. The region captures the largest market share of about 40% and witness the CAGR of about 31.4% in the forecast period. The area gains from chances to interact with cutting edge technology, and the growing trend of smart device usage is driving up demand for experiences utilising extended reality. Furthermore, increased spending on infrastructure development makes it easier to integrate XR, providing previously unheard-of connectivity between the United States and Canada.

During the forecast period, Asia Pacific is expected to experience the highest CAGR of about 48.05%. Building entirely virtual environments for consumers is facilitated by the increasing adoption of Artificial Intelligence (AI), Augmented Reality (AR), Virtual Reality (VR), and Big Data technologies in the retail, e-commerce, and entertainment sectors. In the forecast period, this factor is expected to increase demand for XR technology in the Asia Pacific region. For instance, 2,000 AR/VR startups exist in India, according to XROM, an extended reality company based in Mumbai, and they will propel the market's economic growth in the near future.

Extended Reality Competitive Landscape

The competitive landscape of the Extended Reality market involves assessing the competitive landscape to understand the strengths, weaknesses, opportunities, and threats of the industry. Key industry players have recognized that the adoption of Extended Reality technology holds the potential for profitability. This is due to its versatile applications across various industries and its alignment with products. The growing desire among producers to optimize their production costs has spurred collaborative efforts among companies to scale up their production capacity. This strategic collaboration not only aims to increase revenue but also seeks to establish dominance in the market.

The Extended Reality market is highly competitive, with numerous companies vying for market share. Prominent companies in the Extended Reality Market include:

Major Players:

• Meta Platforms, Inc.
• Microsoft
• Sony Group Corporation
• Apple Inc.
• Google
• HTC Corporation
• PTC Inc.
• Seiko Epson Corporation
• Qualcomm Technologies, Inc.
• Samsung Electronics Co., Ltd.
• Lenovo
• Intel Corporation
• Panasonic Holdings Corporation
• Eon Reality
• Continental AG
• Visteon Corporation
• Xiaomi Corporation
• Maxst Co. Ltd.
• Magic Leap, Inc.
• Virtuix
• Ultraleap
• Vuzix Corporation
• Northern Digital Inc.
• Tata Elxsi
• Fusion VR
• Others

Recent Developments in the Extended Reality Market

• February 2023: Together with Qualcomm, OnePlus brought the Snapdragon Spaces extended reality technology to the OnePlus 11 5G and assisted developers in creating a user-friendly XR ecosystem. With this agreement, customers will be able to enjoy live concerts and films on digital platforms, while developers will be able to create immersive gaming experiences.
• January 2023: The launch of the XR4ED (Extended Reality for Education) initiative was announced by CYENS. With an emphasis on immersive technologies, the XR4ED programme brings together a wide range of stakeholders operating in the rapidly developing field of extended reality.
• January 2023: In order to improve the in-store shopping experience for customers of shopping malls, Mapstar, the XR Map-based Metaverse that enables users to quickly create new digital realities by mapping the environment in 3D and anchoring digital assets, unveiled its Augmented Reality on-site editing, LiDAR, XR-layer, and VR capabilities.
• October 2022: To provide consumers with seamless and immersive XR experiences, Ericsson and the University of Texas at Austin extended their research collaboration.
• June 2022: In order to develop an XR streaming platform for surgical training employing Augmented Reality (AR) and Virtual Reality (VR) technologies, Enhatch partnered with Holo-Light, a provider of immersive technology. To enhance surgical outcomes, this platform makes it easier to view high-resolution 3D models during the procedure.

Extended Reality Market Scope

Table of Contents

1. Executive summary
2. MARKET INTRODUCTION
   • MARKET SCOPE
   • MARKET Definitions
3. research methodology
4. market outlook
   • Key Trends
   • GUIDELINES / REGULATIONS
   • COVID- 19 IMPACT ON GLOBAL EXTENDED REALITY MARKET
   • MARKET DYNAMICS
     • Drivers
       • Continuous developments in 5G technology
       • Growing trend of miniaturization in smart devices
       • Increasing adoption of gesture-based computing
       • Rising demand for VR devices for gaming and entertainment applications
     • Restraints
       • High costs associated with implementation, installation and maintenance
       • Display latency and limited field of view
     • Opportunities
       • Increasing demand for stimulated digital environment
       • Technological developments and innovations
     • Challenges
       • Maintenance of consumer privacy
     • PORTER’S FIVE FORCE MODEL
       • Threat of new entrants
       • Threat of substitute
       • Bargaining power of suppliers
       • Bargaining power of buyers
       • Intensity of competitive rivalry

5. GLOBAL EXTENDED REALITY MARKET, By technology, MARKET ESTIMATION AND FORECAST, 2023-2030), value (USD million)
   • INTRODUCTION
   • MARKET SHARE ANALYSIS
   • AR technology
   • VR technology
   • mr technology
6. GLOBAL EXTENDED REALITY MARKET, BY offering, MARKET ESTIMATION AND FORECAST, 2023-2030, value (USD million)
   • INTRODUCTION
   • MARKET SHARE ANALYSIS
   • hardware
   • software
7. GLOBAL EXTENDED REALITY MARKET, BY device type, MARKET ESTIMATION AND FORECAST, 2023-2030, value (USD million)
   • INTRODUCTION
   • MARKET SHARE ANALYSIS
   • AR devices
   • vr devices
   • mr devices
8. GLOBAL EXTENDED REALITY MARKET, BY application, MARKET ESTIMATION AND FORECAST, 2023-2030, value (USD million)
   • INTRODUCTION
   • MARKET SHARE ANALYSIS
   • consumer
   • commercial
   • enterprises
   • healthcare
   • aerospace & defense
   • energy
   • automotive
   • others
9. GLOBAL EXTENDED REALITY MARKET, REGIONAL ANALYSIS MARKET ESTIMATION AND FORECAST, 2023-2030, value (USD million)
   • INTRODUCTION
   • NORTH AMERICA EXTENDED REALITY MARKET
     • North America Extended Reality Market, By Country
       • US
       • Canada
       • Mexico
     • North America Extended Reality Market, By Technology
     • North America Extended Reality Market, By Offering
     • North America Extended Reality Market, By Device Type
     • North America Extended Reality Market, By Application
   • EUROPE EXTENDED REALITY MARKET
     • Europe Extended Reality Market, By Country
       • Germany
       • UK
       • France
       • Italy
       • Spain
       • Nordic
       • Rest of Europe
     • Europe Extended Reality Market, By Technology
     • Europe Extended Reality Market, By Offering
     • Europe Extended Reality Market, By Device Type
     • Europe Extended Reality Market, By Application
   • ASIA PACIFIC EXTENDED REALITY MARKET
     • Asia Pacific Extended Reality Market, By Country
       • China
       • Japan
       • India
       • Australia
       • ASEAN
       • South Korea
       • Rest of Asia Pacific
     • Asia Pacific Extended Reality Market, By Technology
     • Asia Pacific Extended Reality Market, By Offering
     • Asia Pacific Extended Reality Market, By Device Type
     • Asia Pacific Extended Reality Market, By Application
   • MIDDLE EAST & AFRICA EXTENDED REALITY MARKET
     • Middle East & Africa Extended Reality Market, By Country
       • UAE
       • Saudi Arabia
       • South Africa
       • Rest of Middle East & Africa
     • Middle East & Africa Extended Reality Market, By Technology
     • Middle East & Africa Extended Reality Market, By Offering
     • Middle East & Africa Extended Reality Market, By Device Type
     • Middle East & Africa Extended Reality Market, By Application
   • SOUTH AMERICA EXTENDED REALITY MARKET
     • South America Extended Reality Market, By Country
       • Brazil
       • Argentina
       • Rest of South America
     • South America Extended Reality Market, By Technology
     • South America Extended Reality Market, By Offering
     • South America Extended Reality Market, By Device Type
     • South America Extended Reality Market, By Application

10. GLOBAL EXTENDED REALITY MARKET, COMPETITIVE Intelligence
    • COMPETITIVE POSITIONING
    • competitor benchmarking
    • COMPETIVE QUADRANT
    • market share analysis, 2022 (%)
11. GLOBAL EXTENDED REALITY MARKET, COMPANY ANALYSIS
    • meta platforms, inc.
      • Company Overview
        • Business outlook
        • Headquarter
        • Established/Incorporated
        • Headcounts/ Employee strength
      • Financial Overview
        • Sales/revenue
        • R&D expenditure
        • Business segment sales share
        • Regional sales share
      • Product Offerings
      • SWOT Analysis
      • Key Developments (Expansion/New Product Development/Agreement/Mergers & Acquisitions, Partnership/Investment/Etc.)
    • microsoft
    • sony group corporation
    • apple inc.
    • google
    • htc corporation
    • ptc inc.
    • seiko epson corporation
    • qualcomm technologies, inc.
    • samsung electronics co., ltd.
    • lenovo
    • intel corporation
    • panasonic holdings corporation
    • eon reality
    • continental ag
    • visteon corporation
    • xiaomi corporation
    • maxst co. ltd.
    • magic leap, inc.
    • virtuix
    • ultraleap
    • vuzix corporation
    • northern digital inc.
    • tata elxsi
    • fusion vr
    • OTHERS

*Financials and Details May Not be Included in Case of Privately Held Company

Global Extended Reality Market Segmentation              

Extended Reality by Technology: Market Size & Forecast 2023-2030

• AR technology
• VR technology
• MR technology

Extended Reality by Offering: Market Size & Forecast 2023-2030

• Hardware
• Software

Extended Reality by Device Type: Market Size & Forecast 2023-2030

• AR devices
• VR devices
• MR devices

Extended Reality by Application: Market Size & Forecast 2023-2030

• Consumer
• Commercial
• Enterprises
• Healthcare
• Aerospace & Defense
• Energy
• Automotive
• Others

Extended Reality by Geography: Market Size & Forecast 2023-2030

• North America (USA, Canada, Mexico)
• Europe (Germany, UK, France, Italy, Spain, Nordic, Rest of Europe)
• Asia-Pacific (China, Japan, India, Australia, ASEAN, South Korea, Rest of Asia Pacific)
• South America (Brazil, Argentina, Rest of South America)
• Middle East and Africa (UAE, Saudi Arabia, South Africa, Rest of Middle East & Africa)

Major Players:

• Meta Platforms, Inc.
• Microsoft
• Sony Group Corporation
• Apple Inc.
• Google
• HTC Corporation
• PTC Inc.
• Seiko Epson Corporation
• Qualcomm Technologies, Inc.
• Samsung Electronics Co., Ltd.
• Lenovo
• Intel Corporation
• Panasonic Holdings Corporation
• Eon Reality
• Continental AG
• Visteon Corporation
• Xiaomi Corporation
• Maxst Co. Ltd.
• Magic Leap, Inc.
• Virtuix
• Ultraleap
• Vuzix Corporation
• Northern Digital Inc.
• Tata Elxsi
• Fusion VR
• Others