Extended Reality (XR) Market - Growth, Trends, COVID-19 Impact, and Forecasts (2023 - 2028)

The Extended Reality (XR) Market is segmented by Solution (Consumer Engagement and Business Engagement), by Application (Virtual Reality, Augmented Reality, and Mixed Reality), by End-user Industry (Education, Retail, Industrial and Manufacturing, Healthcare,​ and Media and Entertainment and Other End-User Industries), and Geography.

Extended Reality (XR) Industry Overview

Extended Reality (XR) Market Summary
Study Period: 2018 - 2028
Fastest Growing Market: Asia-Pacific
Largest Market: North America
CAGR: 57.91 %

Major Players

Extended Reality (XR) Market Major Players

*Disclaimer: Major Players sorted in no particular order


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Extended Reality (XR) Market Analysis

The Extended Reality (XR) Market is expected to register a CAGR of 57.91% over the forecast period. Extended reality (XR) is among the emerging technologies and encompasses immersive technologies, such as augmented reality, virtual reality, mixed reality, and other future realities that may emerge. One of the main driving factors for the market is the increasing demand for reducing the distance between people and richer visual content.

  • Several companies are developing supporting technologies that may help commercialize XR technologies globally by identifying great potential in the XR domain.
  • In December 2021, Mawari, a leading XR streaming solution provider, announced that its 3DXR Content Streaming Platform for the Metaverse had made its debut on the AWS Marketplace, a managed and curated software catalog from Amazon Web Services that allows customers to find, buy, and immediately deploy third-party software.
  • The increasing adoption of Gesture-based computing is also aiding the market growth by opening up several applications and opportunities. Gesture-based computing refers to interfaces where the human body interacts with digital resources without using common input devices, such as a keyboard, mouse, game controller, or voice-entry mechanism. It is now ripe to be a part of gaming, TVs, devices, kiosks, medical, 3D sculpting, engineering, medical professionals, designers, advertisers, and even people with physical disabilities. Gesture-based gaming has moved beyond traditional gaming consoles and is witnessing increasing adoption in educational games for children.
  • For instance, Magic Touch Math is the first game that focuses on learning mathematics using custom gesture drawings. Thus, gesture-based recognition can also be used in applications apart from traditional gaming applications.​
  • In December 2021, Oppo unveiled the Air Glass, Augmented Reality (AR) glasses that feature a Cicada Wing Design and an internally developed Spark Micro Projector. The Air Glass offers diffraction, waveguide display that supports touch, voice, head tracking, and gestures. The frame uses a monocle design for the glass, with an attachable AR-capable display that latches on to existing prescription glasses. Furthermore, integration with the rest of its ecosystem has allowed the company to enable seamless experiences for its consumers. For instance, When an Air Glass is paired with an Oppo Watch 2, users can use hand movements to confirm, cancel, and switch application cards.
  • Physical lockdowns in light of the COVID-19 pandemic across significant regions may positively affect the XR technology demand. Enterprises worldwide are trying to find ways to get their internal and wider geographically dispersed teams to communicate, collaborate, and find a path forward during the crisis. The diverse potential of XR applications in recreating the tourism experience allows multi-stakeholders to overcome travel restrictions and lockdowns, thus, allowing the pandemic to act as an accelerator of existing trends for XR adoption.

Extended Reality (XR) Industry Segments

The study under consideration covers solutions for consumer and business engagement. The study also analyses different extended reality applications, such as virtual, augmented, and mixed reality. Market size is analyzed by considering the optimistic growth of the market over the forecast period. The report also covers the impact of COVID-19 on the market and stakeholders. The same has been considered for the current market estimation and future projections.​

The Extended Reality (XR) Market is segmented by Solution (Consumer Engagement and Business Engagement), by Application (Virtual Reality, Augmented Reality, and Mixed Reality), by End-user Industry (Education, Retail, Industrial and Manufacturing, Healthcare,​ and Media and Entertainment and Other End-User Industries), and Geography.

By Solution
Consumer Engagement
Business Engagement
By Application
Virtual Reality (VR)
Augmented Reality (AR)
Mixed Reality (MR)
By End-user Industry
Industrial and Manufacturing
Media and Entertainment
Other End-user Industries
By Geography
North America
Asia Pacific
Rest of the World

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Extended Reality (XR) Market Trends

This section covers the major market trends shaping the Extended Reality (XR) Market according to our research experts:

Virtual Reality Segment to Drive the Market

  • Virtual reality involves the usage of computer technology to create a simulated environment. Unlike the traditional user interface, VR places the user inside an experience. This means that, instead of viewing a monitor screen in front of them, users are immersed in and can interact with a three-dimensional world. With the simulation of as many senses as possible, such as vision, touch, hearing, and smell, the usage of this technology has been transformed.
  • Moreover, across various educational fields, teachers have been increasingly turning to virtual reality technology to help provide a better standard of education. For instance, on a basic level, the introduction of VR in the education sector has enabled the students to be immersed in a VR environment far from the confines of the physical classroom. The technology also gives students a more visual and absorbing lesson, which can be provided at lower costs.
  • Virtual reality technology has also carved its space within the gaming industry in the past few years. VR has given shape to a new generation of gaming that is giving the players immersive, first-person perspective experiences. In the past few years, developers such as Oculus and HTC have worked toward making virtual reality more accessible and affordable. Previously, Oculus launched its Oculus Quest, which is a standalone wireless virtual reality headset.
  • Moreover, the growing pervasiveness of AI technology across VR applications is also enhancing the intelligence of virtual characters. Google’s machine learning tools add 6DoF controller-tracking capabilities to any standalone headset, while Facebook’s DeepFocus framework makes use of AI to create focus effects in VR, and LG makes use of AI to minimize motion sickness among VR users. The Chinese tech leaders Baidu and Tencent are also working on integrating AI and VR into mobile solutions and video games.
  • Cloud technologies are also promising scalability to the VR vendors. As VR-generated data is increasing in volume, the cloud services will store apps, data, and memory in virtual servers and will stream them on-demand. This is also expected to drive innovation in VR and service updates in an uninterrupted cycle.
  • The healthcare industry also adopted VR technology in an intrinsic manner where some of the high-grade institutions have been using the images that a computer has generated to do multiple types of diagnoses. The virtual reality simulations make use of these diagnostic images from the CAT scans to form various 3D models of a patient’s anatomy. The high-tech virtual reality models are helping surgeons, primarily to ensure the position of any tumor or cyst.
Extended Reality (XR) Market : Share of Game Developers Working on Projects for Select VRAR Platforms, In %, Global, 2022

North America is Expected to Hold a Significant Market Share

  • The North American segment of the extended reality market is expected to grow significantly over the forecast period, primarily due to the presence of multiple vendors, such as Microsoft and Qualcomm, among others, making considerable investments in market innovations. Countries such as the US have been among the highly innovative Augmented Reality (AR), Virtual Reality (VR), and Mixed Reality (MR) markets. Most companies developing these technological advancements are based out of the US. Higher technology exposure and ease of smart devices have created strong demand in the region. Microsoft’s AR product, Hololens, first released in the US and Canada, received a positive response from users.
  • As AR technology becomes more innovative and business applications are expanding in the region, the demand and investments in the regional AR market might increase further. For instance, in December 2021, HTX Labs, a provider of immersive learning solutions, declared that it had been awarded a new Small Business Innovation Research (SBIR) Phase II contract by the US Air Force’s 821 Contingency Response Squadron (CRS). SBIR contract seeks to expand the company’s EMPACT immersive training platform to enable the better development, creation, deployment, and measurement of immersive environments and interactive, virtual training content, in support of global mobility operations for the 821 CRS. The company’s primary goal is to adapt its EMPACT Platform to enable Airmen to rapidly create large-scale, geospatially accurate virtual environments, augment and annotate those environments with 3D objects and other digital media and save and publish these environments for use in mission planning.
  • Additionally, end-user industries such as education and the corporate sector have shifted their focus toward technology, which aids them in creating an engaging environment. For instance, the United States Department of Education makes use of virtual reality primarily to help students with autism and learning disabilities in schools across the nation. Moreover, previously, the office of special education and programs announced an investment of USD 2.5 million toward a program that will also use VR to nurture social skills in students with disabilities.
  • According to the GSMA, the number of smartphone subscribers in the North American region is expected to reach 328 million by 2025. Moreover, by 2025, the region is also expected to witness an increase in the penetration rates of mobile (86%) and internet (80%), recording the second-highest rates globally. As smart devices, especially smartphones, play a major role in the development of AR technology, the region offers a huge opportunity for the market studied over the forecast period.
  • Furthermore, in the United States, the COVID-19 pandemic helped to build consumer education on the value of XR experiences. According to Forbes, in 2021, 58.9 million people will use virtual reality, and 93.3 million people will use augmented reality at least monthly in the United States.
Extended Reality (XR) Market - Growth Rate by Region (2022-2027)

Extended Reality (XR) Market Competitor Analysis

The Extended Reality (XR) Market is concentrated and consists of a few players. Some players are expanding their services across the emerging market to gain a market share. However, with advancements in immersive technology trends across the virtual platform, new players are increasing their market presence by enhancing their services and expanding their business footprint across emerging economies.

  • December 2021 - Oppo unveiled the Air Glass, Augmented Reality (AR) glasses that feature a Cicada Wing Design and an internally developed Spark Micro Projector. The Air Glass offers diffraction, waveguide display that supports touch, voice, head tracking, and gestures. The frame uses a monocle design for the glass, with an attachable AR-capable display that latches on to existing prescription glasses. Furthermore, integration with the rest of its ecosystem has enabled the company to enable seamless consumer experiences. For instance, when an Air Glass is paired with an Oppo Watch 2, users can use hand movements to confirm, cancel, and switch application cards.
  • December 2021 - Solotech acquired XR Studios, a full-service agency specializing in extended reality, comprised of augmented reality technology for live broadcast and virtual productions. As part of the strategic plan, XR Studios will continue to operate as a separate entity and brand, progressing its strong trajectory in market leadership. The transaction accelerates the path of Solotech and XR Studios' visions to become the leading provider of extended reality solutions globally.
  • November 2021 - Immersivecast announced the XR Metaverse Workspace, a service environment that supports multi-dimensional Web 3.0 with NFT, AR, and VR and simplifies the content development process. The offering was revealed on an initial 5G network slicing trial with Deutsche Telekom, Samsung, and Ericsson at MWC 2021. It encouraged the company to expand its market presence in Korea and the US.
  • September 2021 - Facebook Inc. announced that it would invest USD 50 million to work with organizations to sustainably construct the so-called Metaverse, a digital world in which people may move and communicate in a virtual environment using various devices. The corporation has invested extensively in virtual reality and augmented reality, creating Oculus VR headsets and working on AR glasses and wristbands. The money will be invested globally over two years by the new XR Programs and Research Fund to ensure that Metaverse technology is developed in a way that is inclusive and empowering.

Extended Reality (XR) Market Top Players

  1. Qualcomm Technologies Inc.

  2. Accenture PLC

  3. Northern Digital Inc.

  4. SoftServe Inc.

  5. SphereGen Technologies

*Disclaimer: Major Players sorted in no particular order

Extended Reality (XR) Market Concentration

Extended Reality (XR) Market Recent Developments

  • April 2022 - Pico Interactive, a virtual reality (VR) solution maker for consumers and businesses, unveiled the 'Pico Neo 3 Link' gadget, its newest standalone VR headset for consumers and gamers. Pico indicated that their new Link headgear would be aimed at VR and gaming enthusiasts. Pico's strategy for introducing its most unique consumer VR product in Europe will entail directly collecting feedback from a committed community of virtual reality enthusiasts, from which the firm will draw product feedback to influence the development of its platform and services.
  • December 2021 - Varjo Base, the company's latest software update, improves Varjo's accessibility by adding more flexibility and support for even more creative activities. Varjo Base 3.4 includes full support for the new Varjo Aero and the ability to create personal accounts and a new virtual backdrop experience. Varjo Cabin is a cabin in Varjo, Finland.

Extended Reality (XR) Market Report - Table of Contents


    1. 1.1 Study Assumptions and Market Definition

    2. 1.2 Scope of the Study




    1. 4.1 Market Overview

    2. 4.2 Industry Attractiveness - Porter's Five Forces Analysis

      1. 4.2.1 Bargaining Power of Suppliers

      2. 4.2.2 Bargaining Power of Buyers

      3. 4.2.3 Threat of New Entrants

      4. 4.2.4 Threat of Substitute Products

      5. 4.2.5 Intensity of Competitive Rivalry

    3. 4.3 Technology Snapshot

    4. 4.4 Impact of COVID-19 on the Market


    1. 5.1 Market Drivers

      1. 5.1.1 Increasing Adoption of Gesture-based Computing

      2. 5.1.2 Growing Trend of Miniaturization in Smart Devices

    2. 5.2 Market Restraints

      1. 5.2.1 Complexity in the Implementation Process in Terms of Technology and Cost

      2. 5.2.2 Vulnerability for Cyber Attacks, Along with the High Cost of Implementation


    1. 6.1 By Solution

      1. 6.1.1 Consumer Engagement

      2. 6.1.2 Business Engagement

    2. 6.2 By Application

      1. 6.2.1 Virtual Reality (VR)

      2. 6.2.2 Augmented Reality (AR)

      3. 6.2.3 Mixed Reality (MR)

    3. 6.3 By End-user Industry

      1. 6.3.1 Education

      2. 6.3.2 Retail

      3. 6.3.3 Industrial and Manufacturing

      4. 6.3.4 Healthcare

      5. 6.3.5 Media and Entertainment

      6. 6.3.6 Other End-user Industries

    4. 6.4 By Geography

      1. 6.4.1 North America

      2. 6.4.2 Europe

      3. 6.4.3 Asia Pacific

      4. 6.4.4 Rest of the World


    1. 7.1 Company Profiles

      1. 7.1.1 Qualcomm Technologies Inc.

      2. 7.1.2 Accenture PLC

      3. 7.1.3 SoftServe Inc.

      4. 7.1.4 SphereGen Technologies

      5. 7.1.5 Northern Digital Inc.

      6. 7.1.6 Microsoft Corporation

      7. 7.1.7 Softweb Solutions Inc.

      8. 7.1.8 VertexPlus Softwares Pvt. Ltd

      9. 7.1.9 Varjo Technologies OY

      10. 7.1.10 Talespin Reality Labs Inc.

    2. *List Not Exhaustive


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Extended Reality (XR) Market Research FAQs

The Extended Reality (XR) Market is studied from 2018 - 2028.

The Extended Reality (XR) Market is growing at a CAGR of 57.91% over the next 5 years.

Asia-Pacific is growing at the highest CAGR over 2018 - 2028.

North America holds highest share in 2021.

Qualcomm Technologies Inc., Accenture PLC, Northern Digital Inc., SoftServe Inc., SphereGen Technologies are the major companies operating in Extended Reality (XR) Market.

Extended Reality (XR) Industry Reports

In-depth industry statistics and market share insights of the Extended Reality (XR) sector for 2020, 2021, and 2022. The Extended Reality (XR) research report provides a comprehensive outlook of the market size and an industry growth forecast for 2023 to 2028. Available to download is a free sample file of the Extended Reality (XR) report PDF.

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