Augmented Reality and Virtual Reality Market based on technology, the augmented reality (AR) market is projected to grow from USD 15.3 billion in 2020 to USD 77.0 billion by 2025; it is expected to grow at a CAGR of 38.1% from 2020 to 2025.
The virtual reality (VR) market is projected to grow from USD 6.1 billion in 2020 to USD 20.9 billion by 2025; it is expected to grow at a CAGR of 27.9% from 2020 to 2025. The increasing demand for AR devices and applications in healthcare, rising investments in AR market, and growing demand for AR in retail and e-commerce sectors due to COVID-19 are the key factors driving the AR market growth. The availability of affordable VR devices, growing adoption of HMDs in different industries, advancement of technologies and growing digitization, penetration of HMDs in gaming and entertainment sectors after COVID-19, and high investments in VR market are the key factors driving the VR market growth.
Augmented Reality and Virtual Reality Market Size, Forecast to 2025 With COVID-19 Impact Analysis
The COVID-19 pandemic is expected to positively impact the growth of the AR and VR market for healthcare application, as AR VR HMDs are expected to be majorly adopted by medical professionals as protective gear in the near future. COVID-19 has negatively impacted the supply chain of the market due to lockdowns and low cross-border trade. Due to the COVID-19 pandemic, the global consumer market for AR & VR is expected to witness sluggish growth in the coming years. The shutdown of consumer markets worldwide has affected the sale of products such as HMDs and projectors. However, the market for VR is expected to regain its complete momentum by 2023.
Augmented Reality and Virtual Reality Market Dynamics
Driver : Increasing demand for AR devices and applications in healthcare
AR plays an important role in the healthcare sector. AR can be used to provide a virtual view of a patient, in which a surgeon can see the condition of the patient’s body parts. This can help the surgeon to conduct minimally invasive surgeries. The use of AR modeling and 3D visualization is expected to help the healthcare sector. The use of AR for improving fitness, teaching complex subjects to medical students, training doctors, managing pharmacy, and caring and supporting patients after they leave the hospital is driving the growth of the augmented reality and virtual reality market in this sector.
Challenge: Display latency and limited field of view
The major challenge faced by these AR manufacturers is to provide a wide field of view (FOV). The field of view is defined as the extent of the observable world at any given moment. Ideally, a human eye has a visual field of ~200° horizontally and 135° vertically; though, currently, AR and VR are capable of providing a FOV of up to 90°. For AR devices to create immersive experiences, they must capture as much of the FOV as possible. Another major challenge for the AR device and application manufacturers is to offer low latency displays. The errors caused by latency often lead to image lagging, thus posing a major challenge for the AR device and application manufacturers. While playing a game, high input lag makes the gameplay feel sluggish and unresponsive. A lower input lag level allows gamers to enjoy a seamless control experience, as movements on the screen respond instantly to the commands. This has been one of the biggest technical challenges faced by AR manufacturers. All possible systems are bound to have some threshold latency, which comes from the content frame rate, the display’s refresh rate, and input lag. Furthermore, these devices are largely being adopted by healthcare and aerospace & defense applications, where any late response would have catastrophic results.