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

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

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

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



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
Alphabet (Google)
Alphabet (YouTube)
Analog Devices
Applied Materials
BAE Systems
Baobab Studios
BBK Electronics
Blu Wireless
ByteDance (Pico)
Carl Zeiss
CBAK Energy Technology
Chukong Technologies
Cirrus Logic
Dassault Systèmes
Dialog Semiconductor
Digital Domain (3Glasses)
Dish Network (Sling TV)
Dolby Labs
Elbit System
Electronic Arts
EON Reality
Epic Games
F5 Networks
Fable Studio
Felix & Paul Studios
Firsthand Technology
Genius Electronic Optical
Gravity Sketch
Invensense (TDK)
Japan Display
Knowles Electronics
LG Chem
LG Display
LG Electronics
Lockheed Martin
LVMH (Christian Dior)
Mantis Vision
Manus Machinae
Medical Realities
Merge Labs
Mimi (3D Sound Labs)
Mozilla (Hubs)
Nanya Tech
Northrop Grumman
NXP Semiconductors
Osso VR
Oxford VR
Penrose Studios
Resolution Games
Samsung Electronics
Seiko Epson
Shanghai Optics
Shenzhen Arashi
Sine Wave
SK Hynix
Softbank (Arm)
Spatial Systems
Square Enix
TDK (InvenSense)
Tencent (WeChat)
Texas Instruments
Tsinghua Unigroup
Unity Technologies
Universal Display
Vicarious Surgical
VR Lens Lab
Walt Disney
Western Digital
Wild Technology
Wookey Technologies
Young Optics
Yulio Technologies

Table of Contents

Executive summary


Technology briefing


Industry analysis

Value chain


Sector scorecards


Further reading

Thematic methodology

Frequently asked questions

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