Virtual reality market poised for quick growth

According to a recent report from SuperData, while AR (augmented reality) and VR (virtual reality) technologies have experienced a slow start, they’re poised for fast growth as the adoption of more products from the sector increases. The report states that the XR (extended reality) market will reach a combined revenue of $7.7 billion in 2018, over both hardware and software sales.

SuperData report that AR and MR (Mixed Reality) revenue will grow exponentially this year, more than doubling 2017’s revenue to $3.2 billion in 2018. The lion’s share of these earnings, around 58%, will be generated by mobile AR games such as Pokemon Go, and the upcoming Harry Potter: Wizards Unite. The reason for this is that consumers are still willing to spend money more readily on games via microtransactions than they are on large pieces of hardware, such as VR headsets.

A number of case studies from SuperData’s gold standard XR report demonstrate the XR market’s growth, and provide some insight into how the market is still forming and growing.

For Bethesda Doom VFR may have had a disappointing launch, but with Fallout 4 on PC and Skyrim VR on PlayStation VR they still managed to beat out most other VR games. The advantage Bethesda had with these titles is that a player base was already established, and most consumers knew they were purchasing something they enjoyed rather than taking a risk on a new, unfamiliar piece of software.

Almost half of all enterprise VR users are educational institutions or companies. While schools and hospitals have limited spending power they are taking advantage of VR technology and the unique way it can aid in education. However, there are a small number of companies such as retailers and automobile manufacturers who are open to heavily investing in the industry.

AR and MR technologies are set to bring in $1.4 billion of the $1.9 billion invested in immersive technology in 2018. While VR is experiencing a spate of disappointment, as most new technologies do, AR solutions and MR technology is becoming a better prospect for potential investors.

Finally, mobile AR will generate the majority of XR revenue through to 2021, raking in about twice as much as software and AR/MR headsets. Mobile AR is already well established in the market and consumers have demonstrated their preference for spending there, while AR/MR headsets are still costly, an will remain so for the general public for a number of years.