Virtual Reality Market Size, Share & Trends Analysis Report By Technology (Semi & Fully Immersive, Non-Immersive), By Device (HMD, GTD), By Component (Hardware, Software), By Application, By Region, And Segment Forecasts, 2023 - 2030

Report Overview

The global virtual reality market size was valued at USD 28.41 billion in 2022 and is expected to grow at a compound annual growth rate (CAGR) of 13.8% from 2023 to 2030. Virtual Reality (VR) enables users to experience a three-dimensional environment in the real world. This immersive experience for consumers is created by VR technology through gadgets such as VR headsets, glasses or gloves, and bodysuits. VR technology has also transformed the gaming and entertainment sectors by enabling users to engage themselves in a highly-simulated gaming world. Furthermore, the increasing use of virtual reality in instructional training, such as for field workers, engineers, mechanics, pilots, defense personnel, and technicians in the various industrial sectors, is propelling the market’s growth.

Aside from training and educational applications, virtual reality is widely used in various industries such as automotive and healthcare, due to its operational benefits. For instance, virtual reality allows engineers to test a vehicle's design and construction at an early stage before beginning costly production in the automobile industry.

For instance, BMW uses mixed reality (augmented reality & virtual reality) in development and vehicle engineering processes. Moreover, the advent of virtual reality exposure therapy is expected to increase the trend for using advanced technologies for treating people with mental health issues. Furthermore, travel companies use virtual reality technology to enable potential tourists to take a virtual tour of monuments, iconic destinations, parks, and more.

During the COVID-19 outbreak, various industries were shut down briefly and lockdowns were imposed to reduce the spread of the virus which in turn impacted business operations across regions. However, the increasing need for businesses to continue their business activities online resulted in an increased demand for virtual reality.

Companies moved to virtual platforms to continue their business activities, such as holding meetings and developing policies and strategies. Event organizers provide visitors with engaging and diverse experiences by holding the event on a virtual platform and offering it as a VR experience. As a result, the growing prominence of virtual events is driving the growth of the VR market.

The increasing use of VR applications in the architecture and planning sector is another factor expected to drive the virtual reality market’s growth. The use of VR technology in architecture aids in decision-making and visualizing the effects of suggested urban designs and architectural plans.

It also enables the early detection and correction of faults, saving time and money. Moreover, several real-estate agencies have begun using virtual reality to give virtual tours of properties, increasing the likelihood of a sale. For instance, in September 2022, PropVR launched its virtual reality center in Mumbai, India for real estate developers to offer VR home tours to prospective buyers.

The entertainment and sports industries have gained significant benefits from VR technology. The market is projected to be widely adopted in location-based entertainment, gaming, theaters, and music. For instance, in September 2022, Shanghai Disney Resort introduced an immersive virtual reality (VR) experience at its Disneytown entertainment, dining, and shopping center. The increased popularity of VR in entertainment is expected to contribute to the growth.

Device Insights

The Head-Mounted Display (HMD) device segment recorded the largest revenue share of over 60% in 2022 and is anticipated to strongly lead the market till 2030. The rising use of virtual reality headsets in consumer and commercial applications is driving its market demand. The segment’s growth is attributed to the assortment and type of HMDs, for example, tethered, hybrid, and wireless HMDs.

The HMD devices are used to offer training in various industries such as research, aerospace, engineering, military, and medicine, as well as to exemplify a wide range of use cases using interactive features. Additionally, to offer customers a highly immersive experience, companies are regularly undertaking technological advancements and entering into strategic partnerships.

The Gesture-Tracking Device (GTD) segment is anticipated to account for the fastest growth with a CAGR of over 15% during the forecast period from 2023 to 2030. This segment development can be accredited to a significant rise in demand from basic gesture tracing to visually immersive gesture tracing, as gesture tracing is an innovative and rapidly applied technology that enables added immersive and almost natural interaction.

The various types of GTD virtual reality hardware include virtual reality projectors, processors, sensors, large displays, and multi-screen projection systems. Additionally, various firms are also involved in improving the efficiency of sensors and processors used in virtual reality systems to provide a significantly immersive application to users.

Technology Insights

The semi & fully immersive segment accounted for the largest revenue share of over 82.0% in 2022. The segment is also estimated to account for the highest CAGR of over 15% over the forecast period. The segment rise can be accredited to the constant rise in demand for virtual reality HMDs for educational and industrial applications.

Full and semi-immersive technology reproduces the architecture of actual surroundings in a virtual platform which is useful for complex tasks and planning. It includes the use of multifaceted emulators, high-processing personal computers, and high-resolution displays. Moreover, virtual reality technology is in demand for educational applications as it allows students to exercise reasoning and motor activities that would not be possible to conduct in a regular classroom.

The non-immersive segment accounted for a revenue share of around 17.0% in 2022. Non-immersive virtual reality technology offers users with a workstation-generated or virtual setting instead of an immersive lifelike world experience. This technology is in trend as it is more efficient in terms of network management and is more widely available.

Due to its restricted 2D interaction, the segment is limited to a few uses that include designing, gaming, medical assistance, and more. Additionally, input devices such as controllers, keyboards, mice, and displays are required for computers and consoles for non-immersive systems to function properly which positively impacts the market growth as investment in an entirely new system is not required.

Component Insights

The hardware segment accounted for the largest revenue share of over 65.0% in 2022. The high penetration and use of smartphones, tablets, and other advanced electronic handheld gadgets are expected to contribute to the segment’s growth as developers are introducing virtual reality-based features in more devices.

Additionally, the segment includes input devices, output devices, and consoles which users buy as accessories for virtual reality setups. Moreover, the growing use of virtual reality headsets in commercial applications, theme & amusement parks, and other places is anticipated to offer growth opportunities to original equipment manufacturers (OEMs) to become VR equipment providers.

The software segment is anticipated to record the highest CAGR of over 15.0% during the forecast period. The segment’s growth can be credited to the capability of the software to create feedback, analyze data, and handle input/output sources. Virtual reality technology is extensively used in product prototyping for its three-dimensional environment factor that enables users to impressively interact with applications and tasks.

Furthermore, the segment is expected to witness an increased demand as the technology can be used in training, simulation, developing virtual tools, VR applications, VR game development, learning experience platforms, and segment reality.

Application Insights

The commercial segment accounted for the largest revenue share of around 55.0% in 2022. The increasing use of virtual reality headsets and virtual reality experience rooms in the commercial sector, including real estate, vehicle showrooms, and retail stores, provides new growth potential in the market.

Furthermore, the growing presence of mobile devices and other handheld devices is expected to drive the usage of VR technologies in the commercial sector. Similarly, businesses are using virtual reality to launch new products to the public to attract buyers with a more immersive experience.

The healthcare segment is expected to register the highest CAGR of over 15% over the forecast period. This can be attributed to the use of virtual reality in the healthcare sector, majorly in disease awareness, operational processes, learning, and training.

The demand for the segment is expected to grow as hospitals and medical colleges use VR solutions and tools to train students and doctors. Moreover, the trend of surgeries conducted remotely and other complex operations is expected to drive the segment’s growth. For instance, challenging surgeries can be attempted by doctors in VR to confirm probability before operating on the actual patient.

Regional Insights

Asia Pacific accounted for the largest revenue share of around 40% in 2022, which can be credited to the growing developments in VR technology. The regional market growth can be attributed to countries such as China which are major producers and suppliers of virtual reality-related hardware.

Additionally, the region is home to a large number of industries and factories that are using virtual reality in various processes due to the trend of automation. Furthermore, the growing penetration of handheld devices with VR support in Asia Pacific is expected to drive market growth.

Europe is estimated to emerge as the fastest-growing regional market with a CAGR of over 15% during the forecast period. This is due to the widespread deployment of VR technology in a variety of applications across several industry sectors, particularly in the gaming and automobile industries.

Europe has a larger gaming population, which helps to drive the adoption of cutting-edge VR headsets in the region. The rapid development and sale of powerful VR hardware aimed at the gaming community in European countries have accelerated the growth of the regional market during the forecast period.

Key Companies & Market Share Insights

The key players adopt strategies, such as partnerships, acquisitions, ventures, innovations, R&D, and geographical expansions, to solidify their industry position. Companies are also focusing on improving their product offerings to better suit the changing needs of users to stay competitive. For instance, in February 2023, Meta Platforms Inc. acquired Within Unlimited, Inc. for its virtual reality expertise and popular VR application called Supernatural.

Furthermore, key companies are expanding their portfolio by launching new products or by significantly developing existing products in their portfolio. As technological developments in the VR industry occur at a significant pace, modern products are launched with new features and tools.  For instance, in January 2023, HTC Corporation launched its new virtual reality & augmented reality headset named Vive XR Elite. According to the company, the product is equipped with a high-resolution display for an immersive experience. Some prominent players in the global virtual reality market include:

• Alphabet Inc.

• Barco NV

• CyberGlove Systems, Inc.

• Meta Platforms Inc.

• HTC Corporation

• Microsoft Corporation

• Samsung Electronics Co., Ltd.

• Sensics, Inc.

• Sixense Enterprises, Inc. (Penumbra, Inc.)

• Ultraleap Limited

Virtual Reality Market Report Scope

Global Virtual Reality Market Report Segmentation

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2018 to 2030. For this study, Grand View Research has segmented the global virtual reality market report based on device, technology, component, application, and region:

• Device Outlook (Revenue, USD Million, 2018 - 2030)

  • Head-mounted Display (HMD)

  • Gesture-tracking Device (GTD)

  • Projectors & Display Wall (PDW)

• Technology Outlook (Revenue, USD Million, 2018 - 2030)

  • Semi & Fully Immersive

  • Non-immersive

• Component Outlook (Revenue, USD Million, 2018 - 2030)

  • Hardware

  • Software

• Application Outlook (Revenue, USD Million, 2018 - 2030)

  • Aerospace & Defense

  • Consumer

  • Commercial

  • Enterprise

  • Healthcare

  • Others

• Regional Outlook (Revenue, USD Million, 2018 - 2030)

  • North America

    • U.S.

    • Canada

    • Mexico

  • Europe

    • U.K.

    • Germany

    • France

    • Italy

  • Asia Pacific

    • China

    • Japan

    • India

    • South Korea

  • South America

    • Brazil

    • Argentina

  • Middle East & Africa

    • South Africa

    • Saudi Arabia