Augmented Reality & Mixed Reality Market - Growth, Trends, Covid-19 Impact, and Forecasts (2023 - 2028)

Augmented Reality & Mixed Reality Market - Growth, Trends, Covid-19 Impact, and Forecasts (2023 - 2028)

The augmented reality market is expected to register a CAGR of 83.3% over the forecast period 2021 to 2026. This market was valued at USD 5.06 billion in 2020 and is expected to reach a value of USD 225.77 billion by 2026. The mixed reality market was valued at USD 376.1 million in 2020 and is expected to reach a value of USD 3,915.6 million by 2026 with an expected CAGR of 41.8% over the forecast period 2021 to 2026. The world is fully engrossed with the two technologies, Virtual Reality (VR) and Augmented Reality (AR). An incredible merger of these two has come into existence, which is an extended reality, known as mixed reality. It is a seamless intersection between Augmented Reality and Virtual Reality and combines the best of both virtual worlds.

• Augmented reality (AR) achieved product realization slowly, owing to the complex nature of the technology. Microsoft Hololens project started in 2010, took six years for development and launched the developer's edition in the first quarter of 2016. While AR is still over a decade away from achieving its full market potential, technological advancements in the space industry have accelerated the market studied, over the past two years.
• The current market scenario has observed a greater focus on creating content and tools with more smartphone compatibility. This is expected to be driven by Photorealistic AR-enabled by the combination of software and hardware advances. Further, many social media applications, including Facebook, Instagram, and Snapchat, are including augmented reality experiences through various fun filters.
• The automobile industry is also moving towards the augmented reality business. Many automobile companies are using artificial intelligence technologies, along with augmented reality(through Head-up displays), to mark their presence in the market. Manufacturers, including BMW, Mercedes-Bez, Chevrolet, Toyota, and Volvo, among others, have included augmented reality features already.
• On the other hand, Mixed reality is gaining widespread recognition across business processes, and the momentum is expected to grow further. However, initial costs have been at higher price points, thus, making it hard for consumers, but they are still relatively inexpensive for enterprises.
• For businesses, MR devices can vastly increase people's knowledge of the world around them by overlaying information in the context of the real world. It can also improve collaboration by enabling remote teams to see precisely the work in real-time so that they can provide better feedback. For the entertainment sector, successful mixed reality content requires an emotional connection between the viewer and what they experience.
• The mixed reality trend is being fueled by investments in hardware devices, platforms, and software ecosystems. A few investments are primarily focusing on replacing keyboards and flat displays with entirely new paradigms for collaboration and communication.
• Covid-19 has impacted positively on AR/VR hardware demand, and enterprises across the world are trying to find ways to get their internal and wider geographically spread teams to communicate, collaborate, and find a path forward during the crisis. Even after the lockdown ends, the behavioural change it has caused is likely to last for a considerably longer period of time. People are expected to remain socially distant, but with the usage of technologies and extended reality they will be virtually close. These platforms and technologies may primarily allow multiple businesses to run and grow irrespective of the challenges posed by social distancing.

• Due to the various advancements in the gaming industry, the significant technologies which are earning a lot of market attention are Virtual Reality (VR), Augmented Reality (AR), and Extended Reality, i.e., Mixed Reality (MR). For an avid gamer, nothing could be more exciting than the prospect of being transported inside the game, battling demons, aliens, and spies, exploring amazing environments beyond imagination.
• The AR gaming market is mainly driven by technological developments, acquisitions, and partnerships. In June 2021, the gaming chat app giant, Discord, acquired the augmented reality startup, Ubiquity6. Ubiquity6 had a vision of building a consumer-facing platform for hosting augmented reality content, and the acquisition by Discord may attract a wider audience to its products.
• The two technologies, AR and VR collectively, have already created scenarios that once seemed impossible, by years of innovations. For instance, products like the Oculus Go will allow users to download games, apps, and other experiences right from their phone and sync the games to the headset, eliminating the need to connect it to a VR-ready computer, which was required by Oculus Rift.
• However, with the introduction of mixed reality, the major factors driving the mixed reality in the gaming market is the unceasing growth of the gaming industry. Mixed reality in gaming provides an immersive virtual environment and enables gamers to experience virtual reality on their gadgets. For example, the launch of Microsoft Hololens motion controllers and developer kits is serving to aid market players to stimulate the development of mixed reality in gaming.
• Furthermore, the increasing adoption of mixed reality in gaming technology in amusement parks and military training is likely to stimulate the application of mixed reality in the gaming industry. For instance, the large theme parks in developed countries such as the U.S. are making hefty investments to integrate mixed reality in gaming technology to provide an immersive gaming experience. Brand name theme parks are also investing to design and develop mixed reality in gaming technology-based theme parks.

• The North American segment of the AR & MR market studied is expected to grow significantly over the forecast period, owing to the presence of a large number of vendors that are also making considerable investments in market innovation and strategic partnerships.
• Globally, United States is expected to be one of the highly innovative AR markets. Most of the companies advancing in this technology are based in United States. High technology exposure and ease of availability of smart devices have created a strong AR market in the region.
• The region has the highest adoption rate of smart devices, especially smartwatches and smart glasses. As smart devices, especially smartphones, play a significant role in the development of the AR market, the region offers a vast opportunity for the growth of the market studied, over the forecast period.
• Additionally, According to Statistics Canada, 17.5% and 16% of the population in Canada and United States were 65 or above in 2018. Rockwell Automation has mentioned that over 25% of their workforce are of age 55 or above, and their jobs are not pursued by the younger generation, creating a skill gap. This gap can be filled by using a mixed reality headset to train in a digital environment safely.
• Further, the region is one of the highest spenders on its military and defense. The US, which spends around USD 14 billion a year in digital training of the army, with a prime focus of military innovation, collaborated with Microsoft for its MR headsets HoloLens, to enable the army to detect enemies while on the battlefield. In November 2018, Microsoft was awarded USD 480 million for the supply of 2,500 HoloLens headsets within the next two years.
• Moreover, the investors in this region are actively looking to invest in diverse AR/VR/MR technology startups working on mixed reality in the region. For instance, the GFR Fund has invested in 17 North American startup companies based on VR/AR/MR technology. Such investments are expected to continue and are estimated to drive market growth in the forecast period.

The augmented reality and mixed reality market are moderately fragmented due to the presence of many players in the market, contributing significantly towards the growth of the market. The vendors are working incessantly towards strategic partnerships and innovations to gain maximum market traction and increase their market size.

• March 2021 - The company has closed a USD 5 million Pre-Series A Funding Round, co-led by Chroma Ventures, 4J Studios, and West Coast Capital. The new investment reinforces the company’s position in the AR market and will be used for research and development activities and to accelerate its growth in the US, European, and Asian markets.
• April 2021 - PTC opened a new research and development facility at Technion – Israel Institute of Technology, under which PTC will invest USD 5 million New Israeli Shekels into the campus. The facility has been opened for research in Industrial IoT, Augmented Reality (AR), Simulation, and Generative Design technologies.
• July 2021 - Wikitude Gmbh released, SDK 9.9, that delivers location-based AR, image and object tracking, markerlessAR, and a wide range of features allowing Flutter developers to augment the world around them in just a few hours.

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