GVR Report cover Virtual Reality Market Size, Share & Trends Report

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, And Segment Forecasts, 2021 - 2028

  • Published Date: Mar, 2021
  • Base Year for Estimate: 2020
  • Report ID: GVR-1-68038-831-2
  • Format: Electronic (PDF)
  • Historical Data: 2016 - 2019
  • Number of Pages: 150

Report Overview

The global virtual reality market size was valued at USD 15.81 billion in 2020 and is expected to grow at a compound annual growth rate (CAGR) of 18.0% from 2021 to 2028. Virtual Reality (VR) is a digitally created experience where a three-dimensional environment is simulated with the real-world. The technology offers an immersive experience to the viewers with the help of VR devices, such as headsets or glasses, gloves, and bodysuits. The technology has brought a transformation in the gaming and entertainment industries by allowing users to experience immersion in a highly virtual realm. In addition, the increasing usage of this technology in instructive training, such as for training mechanics, engineers, pilots, soldiers in defense, field workers, and technicians, in the oil & gas and manufacturing sectors is driving the market growth.

The U.S. virtual reality market size, by device, 2016 - 2028 (USD Million)

Besides providing training and fulfilling educational purposes, the technology is widely accepted across industries for various other purposes. For instance, in the automotive industry, it allows engineers to experiment with the design and structure of a vehicle at the concept stage before initiating expensive prototypes of the vehicle. The technology is also being used to provide treatments to patients with mental health challenges with the help of VR exposure therapy. Moreover, the tourism industry allows potential customers to go on a virtual tour of landmarks, famous locations, restaurants, and hotels with the use of VR technology. Thus, the rising adoption of VR across several industries for various applications is fueling the growth of the market.

The Covid-19 outbreak affected various business’ functioning due to temporary shutdowns of several industries and lockdowns imposed across various regions. However, VR technology has experienced a surge in demand during the pandemic due to the necessity of companies to continue their business operations virtually. Companies have shifted to virtual platforms for attending meetups to formulate various policies and strategies for their ongoing business. It is also emerging as a very promising technology for virtual events as it assists in event planning. Event organizers deliver engaging and plentiful event experiences to individual attendees by hosting the event on a virtual platform and deploying it as a VR experience. Hence, the increasing adoption of virtual events is contributing to the market growth.

Moreover, the rising deployment of VR applications in the architecture and planning sector, as it assists in decision-making and visualizing the outcomes of suggested architectural plans and urban designs, is expected to have a positive impact on the market. The application of VR technology in architecture enables identifying and amending errors in the early stages of designing, consequently saving time and money. Furthermore, many real-estate companies have started deploying VR technology for the virtual tour of properties, which increases the chances of purchase, thus further propelling the industry growth. In 2018, ThyssenKrupp Elevator, a passenger transportation systems provider, launched VR showrooms across the Middle East and Asia that allowed customers to experience the company’s new transport solutions. In addition, the company, along with Zühlke, rolled out HoloLinc, an Industry 4.0 solution that uses Microsoft HoloLens to transform delivery and measurement in the stairlift industry.

VR technology has witnessed substantial opportunities in the entertainment and sports industry. Gaming, location-based entertainment, theaters, and music are expected to witness the benefits of VR technology. For instance, an amusement park in Germany called Europa-Park has deployed VR rollercoasters, Eurostat Coastality, attracting riders to explore the world based on the film Valerian and the City of a Thousand Planets. In 2018, China opened the VR Star Theme Park that hosts more than forty VR-focused rides. The growing attraction toward VR-based entertainment is expected to drive market growth.

Device Insights

The Head-Mounted Display (HMD) device segment accounted for the largest revenue share of over 60.0% in 2020 and is anticipated to maintain its dominance over the forecast period. The increasing importance of VR HMDs in enterprise and consumer applications is driving the segment growth. The different variety and flexibility in HMDs, consisting of tethered, hybrid, and self-contained HMDs, is further propelling the segment growth. The major applications of HMDs involve offering training in various industrial verticals, such as aerospace, military, engineering, medical, and research, and demonstrating a broad spectrum of use cases through interactive virtual images. Companies are continually innovating in this space to provide users with a better immersive experience.

For instance, in March 2019, Oculus VR launched its next-generation Rift S VR headset that incorporates an inside-out tracking and offers a screen with higher resolution as compared to its precursor. The Gesture-Tracking Device (GTD) segment is anticipated to witness the fastest growth rate of over 20.0% from 2021 to 2028. This is attributed to a positive shift in demand as visual gesture recognition is an emerging and growing technology that enables more immersive and intuitive interaction between humans and computers. The GTD VR hardware includes processors, sensors, VR projectors, multiple projection systems, and large screen monitors. Furthermore, several companies are working on enhancing the quality of sensors and processors used in VR devices.

Technology Insights

The semi & fully immersive segment accounted for the largest revenue share of over 80.0% in 2020 and is anticipated to register the highest CAGR as well from 2021 to 2028. This is attributed to the continuous rise in demand for VR HMDs. The semi & fully immersive technology moderately or completely recreates real-world environments’ design into a digital platform and requires high-resolution displays, hard simulators, and high processing PCs to experience the immersion technology.

The technology provides the prospect of practicing motor and cognitive activities, which cannot be experienced within the educational or clinical environment. The semi & fully immersive technology is widely accepted across industry verticals, such as aviation, construction, entertainment, automotive, and education. For instance, Boeing, a-U.S. based aerospace company, deploys hard flight simulators for the training and reevaluation of piloting skills.

The non-immersive technology offers the viewers a digital or computer-generated environment without any immersive experience into the virtual world. The non-immersive technology is believed to be more efficient in terms of the network management system and is highly accessible. However, it is limited to very few applications, such as for designing, gaming, and medical assistance in healthcare, due to its 2D technology. Non-immersive systems need computer and video game consoles, display, and input devices, such as a mouse, controllers, and keyboards, to function.

Component Insights

The hardware component segment accounted for the largest revenue share of over 68% in 2020 and is expected to lead the market even during the forecast period. This growth is attributed to the rapid penetration of smartphones, tablets, and other digitally advanced electronic devices. The hardware segment includes output devices, input devices, and consoles. The increasing usage of VR headsets in amusement and theme parks, commercial applications, and other places is expected to provide new growth opportunities to the OEMs.

Moreover, the advancements in lightweight wearable technology are anticipated to create elevated growth prospects for the VR head-mounted display market. The software component segment is anticipated to register the highest CAGR from 2021 to 2028, which may be attributed to the role of software in analyzing incoming data, generating proper feedback, and managing I/O devices. The VR technology is beneficial for product prototyping or training with the help of its immersive 3D technology. The segment can be categorized into software types, such as simulation, training, virtual tool, game development, application, a learning experience platform, gamification, and segment reality.

Application Insights

The commercial application segment dominated the global virtual reality market with a share of over 53% in 2020 and is anticipated to maintain its lead for the next seven years. The growing adoption of VR headsets in the commercial sector, such as retail stores, car showrooms, and real estate, is providing new growth opportunities to VR companies. The rapid penetration of smartphones has resulted in the vast application of VR technology in the commercial segment. Many companies are incorporating VR technology for introducing their new products to reach the masses. For instance, in April 2020, AUDI AG, a luxury automobile manufacturer, declared that it will unveil the Audi e-Tron Sportback using the VR event, Virtual Market 4, as a digital platform dedicated to its customers.

Global virtual reality market share, by application, 2020 (%)

The healthcare segment is expected to witness the fastest growth rate from 2021 to 2028, which is attributed to the wide spectrum of opportunities for VR in the healthcare sector, such as in medical learning and training, medical marketing, and disease awareness. Companies, such as Ossi VR and ImmersiveTouch, offer VR solutions to train surgeons and medical students. There is an on-going demand for emergency training, virtual surgeries, and VR anatomy applications to help educate medical professionals with more precision. The consumer segment is estimated to have a significant growth due to the increasing demand for VR technology in the gaming and entertainment industry. The need for effective enterprise training and better communication and collaboration tools across organizations is driving the growth of the enterprise segment.

Regional Insights

Asia Pacific accounted for the largest revenue share of over 40.0% in 2020 due to increasing developments in VR technology. Within the region, China captured the largest market share as the country is the major distributor for HMDs. The technological developments in Southeast Asian nations are further propelling the growth of the market. In 2019, Japan launched 5G commercial services, which led to the strategic ingenuities taken by telecom businesses to offer VR/Augmented Reality (AR) viewing platforms, exploiting 5G connectivity. The promising initiatives by administrations, such as investments and funds to benefit VR firms, are also encouraging the adoption of VR technology in the region.

The U.S. led the North America regional market in 2020 as it represents the most attractive and largest technology market with extensive research activities in the field of VR. The region witnesses high acceptance for the technology and is a hub for key companies, such as Microsoft Corp., Apple, Inc., Google LLC, and Magic Leap. The U.S. government is also encouraging market growth by deploying virtual training sessions on public health veterinary. South America is anticipated to witness steady growth due to rapid internet penetration and developments in immersive technology.

Europe is projected to be the fastest-growing regional market from 2021 to 2028. This is attributed to the significant adoption of VR technology in various application areas across different industrial verticals, primarily in the automotive and gaming industries. Europe has a wider gamer base that fuels the adoption of innovative VR headsets in the region. The region witnesses prominence due to the rapid development and launch of advanced VR hardware, targeted mainly at the gaming community in European countries. The Middle East and Africa region is likely to witness sluggish growth, owing to the slow deployment of VR technology.

Key Companies & Market Share Insights

The ongoing trend of technology giants getting commercial products to the industry has directed the collaboration of start-ups to integrate and absorb VR technology that drives the industry growth. The key players in the market are engaging in mergers & acquisitions and partnerships with technology start-ups to gain a competitive advantage. For instance, in June 2020, Facebook Technologies, LLC acquired Ready at Dawn, a VR-based video game development company, with an agreement of creating games with immersive VR-based content for Oculus Studios. In May 2020, Apple Inc. acquired NextVR Inc. to boost Apple’s VR ingenuities for entertainment and sports. With increasing competition in the market, companies focus on offering quality services to their viewers with continuous innovation in their content and exploring various industries with VR technology solutions.

The key companies are significantly investing in R&D to incorporate state-of-the-art technologies with various features in their offerings. The launch of Sony’s PlayStation 5 and Microsoft’s Xbox Series X and Series S are expected to provide VR industry players new opportunities to make rapid strides in the consumer VR space. Industry players are realizing that there is a lot of potential in the enterprise sector and have swiftly forayed into the lucrative space. Major companies, such as Microsoft and Samsung, are committed to innovating VR headsets with immersive experiences in an attempt to bring VR into the mainstream. Prominent players in the global virtual reality market include:

  • Barco

  • CyberGlove Systems, Inc.

  • Facebook Technologies, LLC

  • HTC Corporation

  • Microsoft

  • Samsung Electronics Co., Ltd.

  • Sensics, Inc.

  • Sixense Enterprises, Inc.

  • Ultraleap Ltd.

Virtual Reality Market Report Scope

Report Attribute


Market size value in 2021

USD 21.83 billion

Revenue forecast in 2028

USD 69.60 billion

Growth Rate

CAGR of 18.0% from 2021 to 2028

Base year for estimation


Historical data

2016 - 2019

Forecast period

2021 - 2028

Quantitative units

Revenue in USD million/billion and CAGR from 2021 to 2028

Report coverage

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

Segments covered

Device, technology, component, application, region

Regional scope

North America; Europe; Asia Pacific; South America; MEA

Country scope

U.S.; Canada; Mexico; U.K.; Germany; France; China; Japan; India; Brazil

Key companies profiled

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

Customization scope

Free report customization (equivalent to up to 8 analysts working days) with purchase. Addition or alteration to country, regional & segment scope.

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Segments Covered in the Report

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 2016 to 2028. For the purpose of this study, Grand View Research has segmented the global virtual reality market report on the basis of device, technology, component, application, and region:

  • Device Outlook (Revenue, USD Million, 2016 - 2028)

    • Head-Mounted Display (HMD)

    • Gesture-Tracking Device (GTD)

    • Projectors & Display Wall (PDW)

  • Technology Outlook (Revenue, USD Million, 2016 - 2028)

    • Semi & Fully Immersive

    • Non-Immersive

  • Component Outlook (Revenue, USD Million, 2016 - 2028)

    • Hardware

    • Software

  • Application Outlook (Revenue, USD Million, 2016 - 2028)

    • Aerospace & Defense

    • Consumer

    • Commercial

    • Enterprise

    • Healthcare

    • Others

  • Regional Outlook (Revenue, USD Million, 2016 - 2028)

    • North America

      • U.S.

      • Canada

      • Mexico

    • Europe

      • U.K.

      • Germany

      • France

    • Asia Pacific

      • China

      • Japan

      • India

    • South America

      • Brazil

    • Middle East & Africa (MEA)

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