April 16, 2024

Extended Reality is Estimated to Witness High Growth Owing to Advancements in Mixed Reality Technologies

Extended reality (XR) includes augmented reality (AR), virtual reality (VR), and mixed reality (MR) and allows users to experience digital environments, overlays, and virtual objects. AR overlays digital images and information on the physical world, while VR recreates an immersive 3D environment. MR combines elements of AR and VR to produce new environments where physical and digital objects can coexist. XR solutions are being adopted across various industries like healthcare, education, retail, and entertainment for training purposes, design visualization, marketing & advertising, and gaming. The growing need for enhanced user experiences is one of the major drivers for the growth of the XR market.

The Global Extended Reality Market is estimated to be valued at US$ 70.05 Bn in 2024 and is expected to exhibit a CAGR of 23.% over the forecast period 2024 to 2031.

Key Takeaways
Key players operating in the Extended Reality market are Meta Inc., HTC Corporation, Unity Technologies, Microsoft Corporation, Samsung Electronics Co., Ltd., Magic Leap, Sony Corporation, Vuzix Corporation, Apple Inc, Niantic Inc., Northern Digital Inc., Snap Inc., SoftServe, and Accenture.

The key opportunities in the extended reality market include increased demand from small and medium enterprises for commercializing the technology, rising focus on omni-channel retailing, and growing need for virtual training and simulation across industries. Advancements in mixed reality technologies that bring together physical and virtual content are also expanding the scope of applications for XR.

Market drivers
The increasing demand for remote work solutions during the Covid-19 pandemic accelerated the adoption of XR technology for collaboration, virtual meetings, and interactive training. Wide availability of 5G networks is expected to boost the delivery of advanced immersive experiences through XR. High investments by tech giants in developing lightweight and advanced XR devices will further fuel the growth of the extended reality market over the forecast period.

Current Challenges in Extended Reality Market
The extended reality market is still in a nascent stage of development and commercialization. Majority of extended reality devices and applications are technology demonstrators and prototypes. The technology is yet to achieve required level of maturity, affordability and user experience benchmark for mass adoption. Extended reality technology poses several technological challenges in terms of safety, comfort, and health issues. Prolonged usage of head-mounted displays can cause discomfort, eyestrain and other physical issues. The components and devices also need to be lightweighted, compact and cost-effective for popularity among consumers and enterprises. Further standardization of platforms, hardware specifications and ensuring privacy and security of user data are key challenges for the industry.

SWOT Analysis
Strength: The growing engagement with immersive technologies and increasing investment in extended reality provide significant growth opportunities. Wide range of applications across sectors is a key strength.
Weakness: High costs of devices, lack of content and network issues are major weaknesses restricting mass adoption.
Opportunity: Growth of 5G, widespread availability of cloud computing and rising demand from industrial and commercial sectors present opportunities.
Threats: Concerns around cybersecurity, privacy, and health effects are key threats along with technological disruptions. Regulations around data collection and usage also pose threats.

Geographical Regions
North America accounted for the largest share in the Extended Reality Market in terms of value in 2024 due to strong technology adoption and significant investments from leading tech companies in the region. Presence of major players and rapid deployment of 5G networks in countries like the US and Canada are driving growth.

Asia Pacific is expected to witness the fastest growth during the forecast period from 2024 to 2031. Rising disposable income, growing millennial population and increasing penetration of smartphones are augmenting the demand. Counties like China, Japan, South Korea and India are emerging as lucrative markets for extended reality solutions. Initiatives around smart cities and manufacturing are favoring regional market growth.

*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it