Virtual Reality (VR) – Thematic Research
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Virtual reality (VR) is a technology that immerses the user in an entirely artificial world, which has the illusion of reality. According to GlobalData forecasts, in 2020, the global VR market was valued at $5 billion. The VR market is expected to grow at a CAGR of more than 25% during 2021-2030. The estimate includes revenues generated by VR hardware (i.e., headsets) and software. The market remains heavily gaming-oriented, but VR is gaining traction in areas such as social media and live streaming. Consumer-focused VR companies are striving for a semi-mythical killer app that would make VR a mainstream hit. Meanwhile, VR headset makers are increasingly exploring growth among enterprises.
VR has been around for over six decades, in one form or another, but is still not a mainstream technology. Both VR hardware and software have evolved significantly in recent years, but issues like latency, nausea, high prices, privacy concerns, and a dearth of compelling content prevent widespread adoption. While technologies such as 5G, cloud services, and motion tracking are used to address latency and nausea issues, improving content and developing effective data privacy practices will be paramount for VR’s success.
The number of emerging enterprise use cases reflects VR’s growing adoption and, as such, VR headsets will become critical tools, mainly for training, in the long run. On the consumer front, VR is primarily associated with gaming but has other uses, including accessing social media and viewing video content. VR will play an essential role in the metaverse, an emerging mega-theme that could potentially revolutionize the digital media industry.
Overview of virtual reality market
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What are the market dynamics of virtual reality market?
The market remains heavily gaming-oriented, but VR is gaining traction in areas such as social media and live streaming. Consumer-focused VR companies are striving for a semi-mythical killer app that would make VR a mainstream hit. Meanwhile, VR headset makers are increasingly exploring growth among enterprises. The COVID-19 pandemic triggered a shift to remote working that has boosted the adoption of VR by enterprises for training, collaboration, data visualization, and customer experience. VR will be a key technology in the future of work, and the development of enterprise-grade metaverse platforms will further enhance its appeal.
COVID-19 has hit the VR market on both the supply and demand sides. According to GlobalData forecasts, shipments of VR headsets fell by 50% in 2020, and revenues declined compared to 2019. Consumer spending on non-essential products, including VR headsets, was negatively impacted by the economic recession. VR will be a key technology in the future of work. Today, VR is used in industries such as retail (e.g., Walmart), aerospace (e.g., Boeing), airlines (e.g., Qatar Airways), oil and gas (e.g., Saudi Aramco), and healthcare (e.g., Johnson & Johnson), mainly for training and collaboration. The explosion in remote working during the COVID-19 crisis has fueled the use of VR in enterprises. VR-based collaboration and training will become key use cases for the emerging enterprise-grade metaverses in the coming years.
What are the segments involved in the virtual reality market by end-user and platform?
In terms of end-users, the VR market is segmented into Enterprise VR and Consumer VR. The consumer VR segment accounted for more than 70% of total VR revenue in 2020. However, by 2030 the enterprise segment will be dominant, accounting for more than 60% of total revenue. In terms of platform, the VR market is segmented into VR software and VR hardware. VR software accounted for more than 50% of the total global VR market in 2020, with the remaining coming from the sale of hardware. VR software market observed a slight decline in 2020 compared to 2019. VR software comprises of VR apps and content distributed via app stores. It does not include revenues generated by services like app development platforms and VR arcade operators. VR hardware declined in 2020 due to production and supply issues during the pandemic. The market will recover as the pandemic subsides.
Virtual reality market, by end-user
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What are the value chain segments in the virtual reality market?
As per Globaldata’s report, the Augmented reality value chain is split into five segments: semiconductors, components, headsets, platforms, and applications and content.
- Semiconductors: Several chipmakers are investing in developing VR-specific chipsets, which will enhance the standalone capabilities of devices and make them more versatile. It is further segmented into Central processing units (CPUs), Graphics processing units (GPUs), Vision processing units (VPUs), Image processors, Communication chips, Micro-electromechanical systems (MEMS), and Memory chips.
- Components: The aim is to reduce the lag between the user’s motion and the computer-generated response inside the VR headset. It is further segmented into Motion tracking, Batteries, Displays, Cameras & 3D lenses, Audio components, and Machine vision.
- Headsets: VR requires headsets – also called HMDs or goggles – that completely cover the eyes for an immersive experience. It is further segmented into Console-tethered, PC-tethered, Smartphone-tethered, and Untethered.
- Platforms: Long-term success in the VR industry will come to those who build an entire ecosystem for users rather than simply manufacturing hardware. It is further segmented into Application programming interfaces (APIs) and SDKs, VR engines – games and enterprise, Application delivery networks (ADNs), and content delivery networks (CDNs).
- Apps and content: The main bottleneck for VR is content. While the first generation of VR was primarily interested in hardware development, the second generation is more focused on content.
Which are the key players in the virtual reality market?
The key players in the virtual reality market include ByteDance, DPVR, Meta, HTC, Microsoft, Qualcomm, Sony, Unity, Valve, and Walt Disney.
Virtual reality market, key companies
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Market report scope
Market size (Year – 2020) | $5 billion |
Growth rate (CAGR) | >25% |
Base year for estimation | 2020 |
Forecast period | 2021-2030 |
Key Companies | ByteDance, DPVR, Meta, HTC, Microsoft, Qualcomm, Sony, Unity, Valve and Walt Disney |
Key Segments by the end-user | Enterprise VR & Consumer VR |
Key Segments by platform | VR software and VR hardware |
Key Value Chain segments | Semiconductors, Components, Headsets, Platforms and Applications and Content |
Scope
This report provides an overview of the virtual reality theme.
- It identifies the key trends impacting the growth of the theme over the next 12 to 24 months, split into four categories: technology trends, macroeconomic trends, regulatory trends, and media trends.
- It includes comprehensive industry analysis, including forecasts for virtual reality revenues to 2030. These forecasts are split by end-user (consumer and enterprise) and platform (hardware and software). There is also market share information for the VR headsets markets.
- It contains details of M&A deals driven by the virtual reality theme, and a timeline highlighting milestones in the development of virtual reality.
- The detailed value chain comprises five segments: semiconductors, components, headsets, platforms, and applications and content. Leading and challenging vendors are identified across all five segments.
Reasons to Buy
- This report tells you the need to know about VR, including market forecasts to 2030 and profiles of the leading companies
AAC Technologies
AdHawk Microsystems
AG Microsystems
Airbnb
Airbus
Akamai
Alibaba
Alphabet (Google)
Alphabet (YouTube)
Amazon
Ambarella
Analog Devices
ANIMA RES
ANTVR
ApertusVR
AppGameKit
Apple
Applied Materials
AppliedVR
Autodesk
BAE Systems
Baidu
Baobab Studios
BBK Electronics
BigScreenVR
Blu Wireless
Boeing
Bosch
Broadcom
Burberry
BYD
ByteDance (Pico)
Cadence
CAE
Canbor
Capcom
Carl Zeiss
CBAK Energy Technology
Chukong Technologies
CineVR
Cirrus Logic
Cloudflare
Cognex
Colopl
Crytek
Dassault Systèmes
Dialog Semiconductor
Digital Domain (3Glasses)
Dish Network (Sling TV)
Dolby Labs
DPVR
eBay
Elbit System
Electronic Arts
Enhance
EON Reality
Epic Games
F5 Networks
Fable Studio
Fastly
Felix & Paul Studios
Firsthand Technology
Fove
Foxconn
Fulldrive
FundamentalVR
Garmin
G'Audio
Genius Electronic Optical
GestureTek
Godot
Goertek
Gravity Sketch
HaptX
Himax
HP
HTC
Huawei
ImmersiveTouch
Infineon
Intel
Invensense (TDK)
iQiyi
Japan Display
JD.com
jsDelivr
Kinicho
Kioxia
Knowles Electronics
Leica
Lenovo
LG Chem
LG Display
LG Electronics
Lockheed Martin
LVMH (Christian Dior)
Macronix
Mantis Vision
Manus Machinae
Matterport
MediaTek
Medical Realities
MeetinVR
Merge Labs
Micron
Microsoft
Mimi (3D Sound Labs)
MindMotionPro
Mozilla (Hubs)
Murata
Myer
Nanome
Nanya Tech
NetEase
Netflix
Nexon
Nikon
Nintendo
Northrop Grumman
Nvidia
NXP Semiconductors
Occipital
Olympus
OmniVision
Omron
Oncomfort
OnSemi
OpenXR
Osso VR
Oxford VR
Panasonic
Penrose Studios
Pimax
Psious
Qorvo
Qualcomm
Resolution Games
Ricoh
Safran
Samsung Electronics
Seiko Epson
Sennheiser
Sensata
Shanghai Optics
Shenzhen Arashi
Shinecon
SideQuest
Sine Wave
Sixense
SK Hynix
Skyworks
Softbank (Arm)
Sony
Spatial Systems
Square Enix
StackPath
STMicroelectronics
Suning.com
SUPERHOT
TDK (ATL)
TDK (InvenSense)
Tencent
Tencent (WeChat)
Texas Instruments
Toshiba
Tsinghua Unigroup
TSMC
Ubisoft
Ultrahaptics
Unity
Unity Technologies
Universal Display
USound
Valve
Varjo
Verizon
Vicarious Surgical
Vicon
VR Lens Lab
VRChat
Walt Disney
WearVR
Western Digital
Wild Technology
Wookey Technologies
WorldViz
Xiaomi
Xilinx
Young Optics
Yulio Technologies
Table of Contents
Frequently asked questions
-
What was the size of the virtual reality market in 2020?
The virtual reality market was valued at $5 billion in 2020.
-
What was the growth rate of virtual reality market?
The virtual reality market is expected to grow at a CAGR of more than 25% during 2020-2030.
-
What are the key segments of virtual reality market by end-user and platform?
By end-users, the VR market is segmented into enterprise VR and consumer VR. In terms of platform, the VR market is segmented into VR software and VR hardware.
-
Which are the key players in virtual reality market?
The key players in virtual reality market include ByteDance, DPVR, Meta, HTC, Microsoft, Qualcomm, Sony, Unity, Valve, and Walt Disney.
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