Virtual Reality Market

Virtual Reality Market Size

The global Virtual Reality Market size was valued at USD 15.85 billion in 2023 and is projected to grow from USD 18.48 billion in 2024 to USD 60.78 billion by 2031, exhibiting a CAGR of 18.54% during the forecast period.

The market is experiencing steady growth due to the extensive adoption of VR technology and its surging use in training pilots, technicians, engineers, mechanics, and defense personnel.

In the scope of work, the report includes services offered by companies such as Google LLC, Barco, Sony Corporation, SAMSUNG, Ultraleap Inc., Microsoft Corporation, HTC Corporation, Johnson Controls., Qualcomm Technologies, Inc., NVIDIA Corporation, and others.

The growing demand for VR in the gaming sector is driving the growth of the market. Gamers actively seek interactive and immersive experiences, prompting companies to integrate VR technology into their platforms.

Additionally, they are leveraging cloud technologies to further enhance the gaming experience, which include capabilities such as big storage capacity, live streaming, and linked devices. Companies are further adopting strategic initiatives such as mergers and acquisitions, and partnerships to deliver more immersive experiences.

• For instance, in October 2023, Yudiz Solutions, an Indian digital transformation and game development company, showcased its capabilities at India Mobile Congress 2023 by launching an exclusive VR combat shooting game in partnership with Vodafone India.

The adoption of 5G technology in gaming is fueling market growth. 5G technology is utilized in VR games, where users demand a low-latency experience.

Virtual reality (VR) is an advanced computer technology that utilizes specialized hardware, such as goggles or headsets, and interactive software to create realistic, computer-generated environments viewable in 360 degrees. It enables users to experience a virtual world replicating physical presence and visual interactions.

VR is widely adopted across industries for applications such as entertainment, simulations, teaching, and customer engagement, offering companies innovative ways to connect with users.

Types of VR include semi-immersive virtual reality, none-immersive virtual reality, immersive virtual reality, and augmented reality. Its applications span diverse fields such as arts, architecture, medicine, entertainment, sports, and architecture.

Analyst’s Review

Companies operating in the virtual reality market are focusing on the development ofhardware and software solutions for VR, leveraging cloud computing for seamless VR experience. They are further collaborating with partners to invest in VR content creation.

Key players are integrating VR with AI and IoT technologies, driving advancements in medical simulations. These technologies provide healthcare professionals with realistic, risk-free environments to practice procedures. AI assists in diagnosing diseases by analyzing medical data, supporting predictive analytics, and personalizing treatment plans.

Additionally, industry players are utilizing these technologies to enhance medical training, improve surgical procedures, and enhance patient care with real-time monitoring.

• In July 2024, MediSim VR established Chennai's first Virtual Reality (VR)-based Center of Excellence (CoE) for medical training at the Sri Ramachandra Institute of Higher Education and Research (SRIHER). The institute offers interactive and immersive virtual reality training to medical students nationwide.

Companies utilize AI to create immersive VR scenarios, enabling medical students and professionals to interact with patients in virtual environments. To spur innovation in wireless VR, they partner with VR hardware manufacturers, focusing on developing a comprehensive ecosystem encompassing VR content, platforms, and services.

Virtual Reality Market Growth Factors

The growing demand for experiential learning platforms in the education sector is propelling the growth of the virtual reality market. Education providers are adopting this technology to offer interactive learning experiences that increases student engagement and promote hands-on learning.

This technology facilitates experiential learning by immersing students in virtual environments, enabling active participation in experiments, activities, and problem-solving tasks.

• For instance, in April 2023, Coursera introduced three new VR technology courses to improve students learning experiences, offering Meta-Certified Augmented Reality (AR) course certifications upon completion.

Practical methods such as language learning, virtual field trips, and social and historical studies with time-travel experience in virtual environments enable learners to gain practical skills, insights, and knowledge through active participation and trial and error method.

The virtual reality market faces challenges due to high cost of equipment, including controllers, headsets, and computing hardware, which limits accessibility for consumers and businesses. To mitigate these challenges companies are focusing on lowering production costs through technological advancements and the use of lower-cost materials.

Additionally, VR companies are offering cloud-based solutions that enable content viewing without the need for high-end software. Companies are exloring the use of mobile devices, such as smartphones, to deliver VR experiences with cost-effective headgear, making it more affordable for users.

Virtual Reality Industry Trends

The growing adoption of VR technology in the healthcare sector is propelling market growth. VR is considered an innovative tool with significant potential for patient treatment and the delivery of high-quality medical care. Its interactive nature allows the creation of solutions that help patients understand their bodies and medical conditions.

VR technology is used for addressing medical concerns, surgical procedures, and simulating real medical environments, enabling medical professionals to practice and refine their skills before working with patients.

Additionally, healthcare institutes are exploring VR for treating addiction disorders. Increased funding supports efforts to increase awareness and promote the adoption of this technology.

• For instance, in September 2024, Wundrsight, a digital therapeutics company, raised USD 400,000 funding from Inflection Point Ventures. This funding aims to support the expansion of its VR-based mental health solutions across India, facilitating partnerships with medical centers to advance treatments for disorders such as autism, and anxiety.

Key players across various sectors are leveraging VR technology for simulation, training and design purposes. In the construction industry, companies use VR to improve performance, reduce costs, boost productivity, and enhance safety. Additionally, some universities and companies are launching awareness programs for professionals in the sector.

• For instance, in July 2023, Sandals Corporate University, partnered with EON Reality, to launch an advanced XR Platform, which incorporates AI and VR technologies to improve hospitality education. This platform allows buyers to explore properties in a realistic, immersive environment, saving both time and money and transforming the real estate transaction process.

Segmentation Analysis

The global market has been segmented based on device, technology, component, application, and geography.

By Device

Based on device, the market has been categorized into head-mounted displays (HMDs), gesture-tracking device (GTD), and projectors & display wall (PDW). The head-mounted displays (HMDs) segment led the virtual reality market in 2023, reaching a valuation of USD 6.73 billion.

Surging use of HMDs in VR gaming, entertainment, and education has increased demand. Various types of HMDs are offered by companies such as hybrid, tethered, and wireless HMDs.

• In March 2024, LG Electronics announced a strategic partnership with Meta Platforms, Inc. (Meta), to advance its extended reality (XR) initiatives. This collaboration seeks to combine the strengths of both companies in products, content, services, and platforms, with the goal of driving innovation in virtual customer experiences.

Key players collaborate with companies to advance technologies, increasing widespread adoption. The demand for smartphone-compatible  VR headsets, such as Google Cardboard, is increasing due to their affordability. These headsets are increasingly utilized for training across various industries.

By Technology

Based on technology, the market has been bifurcated into semi & fully immersive and non-immersive. The semi & fully immersive segment captured the largest share of 42.15% in 2023. Increasing demand for VRs in industrial and educational, and healthcare applications is aiding segmental growth.

These systems, equipped with advanced monitors and projection systems, create immersive environments. In the construction sector, they enable wireless, room-scale virtual experience, aiding intricate planning and complex tasks. In healthcare; VR is integral to neurosurgeons to perform high-risk brain surgeries.

VR technology is crucial in neurosurgery for developing realistic surgical simulations and patient-specific 3D models, facilitating critical decision-making. By providing precise visualization and practice opportunities, it enhances surgical precision, improves patient outcomes, and mitigates risks. This technology utilized in gaming and healthcare sectors, with neurosurgeons utilizing it in high-risk brain surgeries.

By Component

Based on component, the virtual reality market has been segmented into hardware and software. The hardware segment is expected to garner the highest revenue of USD 30.65 billion by 2031.

The growing adoption of tablets, smartphones, gaming consoles, and other electronic devices is contributing significantly to segmental growth. Key components such as sensors, processors, HMDs, and motion controller are essential in improving VR environments.

Advancements in VR hardware, such as enhanced resolution, superior motion tracking, and improved visuals have made the technology more accessible to companies and individuals. Surging demand from healthcare and gaming sectors further fuels adoption.

By Application

Based on application, the market has been categorized into aerospace & defense, consumer, commercial, enterprise, healthcare, and others. The consumer segment is expected to garner the highest revenue of USD 21.23 billion by 2031.

The increasing affordability of VR devices in gaming, healthcare, and education sectors is supporting segmental growth. The rising adoption of VR for health and fitness applications further support this trend.

Additionally, VR is increasingly utilized in events, tourism, and training, enabling businesses to conduct site surveys and virtual tours, thereby enhancing safety and operational efficiency. 

Virtual Reality Market Regional Analysis

Based on region, the global market has been classified into North America, Europe, Asia-Pacific, MEA, and Latin America.

The Asia-Pacific virtual reality market accounted for the largest revenue share of 36.12% in 2023, with a valuation of USD 3.24 billion. This growth is largely attributed to the rising adoption of VR technology across education, gaming, and healthcare sectors. Major countries such as China, India, Japan, and South Korea benefit from robust technological infrastructure and expanding manufacturing capabilities.

• For instance, in October 2024, DPVR, a Shanghai-based company specializing in virtual reality (VR) hardware and software, unveiled the P1 Pro Cam, a standalone mixed reality (MR) headset designed to improve educational experiences.

South Korea and Japan are focusing on advancements in technology to enhance VR applications. The growing adoption of VR in training and education programs is fostering regional market growth.  

Europe virtual reality market is anticipated to witness substantial growth, recording a CAGR of 18.93% over the forecast period. The widespread adoption of VR technology across various sectors, including gaming and education, is fueling regional market growth. Several european countries have VR startup ecosystems and innovation centers.

VR is utilized in healthcare sector for applications such as VR-based therapies and training purpose. Key players continually enhancing their product offerings, driving innovation and contributing to a dynamic and evolving market environment. 

The region's large gaming population, coupled with the rapid production and distribution of high-performance VR equipment tailored for gamers has signiifcantly boosted regional market expansion.

Competitive Landscape

The global Virtual Reality market report will provide valuable insight with an emphasis on the fragmented nature of the industry. Prominent players are focusing on several key business strategies such as partnerships, mergers and acquisitions, product innovations, and joint ventures to expand their product portfolio and increase their market shares across different regions.

Companies are implementing impactful strategic initiatives, such as expanding services, investing in research and development (R&D), establishing new service delivery centers, and optimizing their service delivery processes, which are likely to create new opportunities for market growth.

List of Key Companies in Virtual Reality Market

• Google LLC
• Barco
• Sony Corporation
• SAMSUNG
• Ultraleap Inc.
• Microsoft Corporation
• HTC Corporation
• Johnson Controls
• Qualcomm Technologies, Inc.
• NVIDIA Corporation

Key Industry Developments

• August 2024 (Launch): HTC VIVE launched VIVERSE Create, a set of tools that allows creators to design and share collaborative multiplayer environments across devices without requiring coding expertise.
• December 2023 (Launch): Sony Corporation launched VR2, a second-generation VR headset PlayStation in India, featuring a sense controller and adjustable headset band for a customized fit.
• February 2023 (Acquisition): Meta Platforms Inc. acquired Within Unlimited, Inc., a virtual reality (VR) company known for its popular VR fitness software, Supernatural.

The global virtual reality market is segmented as:

By Device

• Head-Mounted Displays (HMDs
• Gesture-Tracking Device (GTD)
• Projectors & Display Wall (PDW)

By technology

• Semi & Fully Immersive
• Non-Immersive

By Component

• Hardware
• Software

 By Application

• Aerospace & Defense
• Consumer
• Commercial
• Enterprise
• Healthcare
• Others

By Region

• North America
  • U.S.
  • Canada
  • Mexico
• Europe
  • France
  • UK.
  • Spain
  • Germany
  • Italy
  • Russia
  • Rest of Europe
• Asia-Pacific
  • China
  • Japan
  • India
  • South Korea
  • Rest of Asia-Pacific
• Middle East & Africa
  • GCC
  • North Africa
  • South Africa
  • Rest of Middle East & Africa
• Latin America
  • Brazil
  • Argentina
  • Rest of Latin America