Virtual Reality (VR) In Gaming Market Report

Virtual Reality (VR) In Gaming Market Analysis By Component, By Device (Gaming Console, Desktop, Smartphone), By Country (U.S., Canada, Germany, UK, China, India, Japan, Brazil, Mexico), And Segment Forecasts, 2014 - 2025

Published: March 2017  |  155 Pages  |  Format: PDF  |  Report ID: 978-1-68038-585-4

Industry Insights

The global Virtual Reality (VR) gaming market size was estimated at USD 4.29 Billion in 2015. Factors such as growing demand for latest technologies in electronic games by the younger generation, rising disposable income of buyers in the emerging countries, and increasing competition for developing VR technology in computerized games have boosted industry growth.

Use of crowdfunding by start-ups in the VR space to develop innovative software, accessories, and wearables is one of the most recent trends in the electronic games industry.

U.S. virtual reality in gaming market by device, 2014 - 2025 (USD Billion)

U.S. virtual reality in gaming market

Most of the virtual reality input devices are prototypes, and companies are investing heavily in Research & Development (R&D) to build consumer versions which can be connected to consoles, desktops, and smartphones. With companies expanding production, and users getting more acquainted with the new technology, the demand for such games is anticipated to grow phenomenally in the coming nine years.

Purchasing hardware in order to experience the virtual reality technology in video games requires huge initial investment. Most of the accessories are prototypes, and thus priced heavily, which is expected to challenge industry growth during the initial stages until the technology becomes mainstream. Device compatibility constraints and lack of awareness about the use of this technology in games are other challenges which may pose a barrier to the industry’s growth.

The technology is disruptive and is thus projected to create a market for consoles which are compatible with VR input devices and accessories. The advent of this technology in video games have raised user expectation from gaming software. This is ultimately expected to result in developers creating a more captivating audio, video, and graphical effect in their offerings.

Device Insights

The gaming console segment accounted for the highest revenue share in 2015 and is expected to continue being the largest device segment for adopting artificial simulation technology in electronic games. Currently, we are in the eight generation of gaming consoles with PlayStation 4, Xbox One, and Wii U steadily replacing their previous generation’s counterparts. These provide gamers with superior immersive experience as compared to desktops and smartphones. The consoles are compatible with popular Head Mounted Devices (HMDs) such as Oculus VR and HTC Vive which provide artificial simulation effect in the games.

Smartphones are expected to emerge as the fastest growing devices for the adoption of the virtual reality technology in digital games, with a CAGR of around 35% during the forecast period. They provide gamers with a more cost-effective and portable solution as compared to gaming dedicated consoles and desktops. Google Cardboard headset is a head mount display which can be used with a smartphone for experiencing the virtual world of the computerized game. Use of smartphones for playing VR-enabled games is expected to emerge as a key trend in the coming years.

Component Insights

Global virtual reality in gaming market by component, 2015 (%)

Global virtual reality in gaming market


The hardware segment accounted for almost 60% of revenue share in 2015 and is expected to witness substantial growth over the forecast period. This can be chiefly attributed to the high procurement costs for the associated hardware. Wearables and accessories such as input devices, gloves, masks, bodysuit, etc. are highly priced, with prices expected to decline with rising demand in future.

While the hardware segment is expected to grow very rapidly, the software segment is anticipated to experience modest growth. Adoption of the virtual reality technology has raised user expectation for enhanced software solutions, hence increasing challenges for developers than before.

Regional Insights

Presently, the U.S., China, Germany, Japan, and Brazil constitute the leading markets for video games. In 2015, the North American virtual reality in gaming market accounted for the highest revenue share which is attributed to the high purchasing power in the region coupled with the presence of substantial number of gamers.

By 2025, China is anticipated to become the largest region for video games equipped with VR technology followed by the United States. The technology has been in place for a considerable amount of time in countries such as Japan and China. However, its penetration in other countries of the Asia Pacific is relatively low. The virtual reality technology is expected to be launched in a phased manner in these regions.

Latin America is projected to grow at the fastest rate owing to a combination of several factors including substantial gamer-base, rapidly growing console sales which make the region a very lucrative market for VR-based games.

Competitive Insights

Companies developing virtual reality devices and wearables are mostly start-ups and are using the crowdfunding platform to raise funds for VR projects. Some of the prominent industry players are Linden Labs, Electronic Arts, Facebook/ Oculus, Samsung Electronics Co. Ltd., Google Inc., HTC Corporation, Virtuix, Leap Motion Inc., Telsa Studios, Qualcomm Inc., VirZoom Inc., and Lucid VR. The companies are developing accessories ranging from motion sensing devices to arms, gloves, treadmills, and full bodysuits.

Sony Corp., Microsoft Corp., and Nintendo Co. Ltd. are the key manufacturers of gaming consoles and account for a significant revenue share of the industry. The companies usually adhere to the Blue Ocean Strategy as they are the first ones to develop latest technologies. The eighth generation consoles developed by these companies are compatible with popular input devices for creating artificial simulations in games. 

Report Scope

Attribute

Details

Base year for estimation

2015

Actual estimates/Historical data

2014 - 2016

Forecast period

2016 - 2025

Market representation

Revenue in USD Million and CAGR from 2016 to 2025

Regional scope

North America, Europe, Asia Pacific, Latin America, MEA

Country scope

U.S., Canada, UK, Germany, Japan, China, India, Brazil, Mexico

Report coverage             

Revenue forecast, company share, competitive landscape, growth factors and trends

15% free customization scope (equivalent to 5 analyst working days)

If you need specific market information, which is not currently within the scope of the report, we will provide it to you as a part of customization

 

Segments Covered in the Report

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the industry trends in each of the sub-segments from 2014 to 2025. For the purpose of this study, Grand View Research has segmented the global Virtual Reality (VR) in gaming market on the basis of component, device, and region:

  • Component Outlook (Revenue, USD Million; 2014 - 2025)

    • Gaming Hardware

    • Gaming Software

  • Device Outlook (Revenue, USD Million; 2014 - 2025)

    • Gaming Console

    • Desktop

    • Smartphone

  • Regional Outlook (Revenue, USD Million; 2014 - 2025)

    • North America

      • U.S.

      • Canada

    • Europe

      • Germany

      • UK

    • Asia Pacific

      • China

      • Japan

      • India

    • Latin America

      • Brazil

      • Mexico

    • Middle East & Africa (MEA)

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