Future of Virtual Reality – Market Trends And Challenges

This Tutorial Discusses the Future of Virtual Reality, Projected Growth Patterns, VR Market Trends,  Benefits, and Challenges:

According to different market studies, Virtual Reality is projected to grow exponentially in five years to come. This tutorial is about the future of virtual reality. We will start by looking at the outlook of the virtual reality market based on several top research studies and researches.

We will also look at the details related to projected growth for virtual reality products, components, and different market segments.

Future of virtual reality

Future Of Virtual Reality Market

The below image explains the potential of VR applications by category.

Potential of VR applications by category

#1) Virtual Reality(VR) and Augmented Reality(AR) will multiply 21-fold from 2019 – 2022

According to research by the International Data Corporation (IDC) research, VR and AR market will reach 15.5 billion euros by 2022. AR and VR spending would reach $18.8 billion in 2020, an increase of 78.5% over the $10.5 billion, achieving a five-year annual growth rate (CAGR) of 77.0% to 2023.

The below image displays a forecast of AR VR headset shipments in 2019–2023:

Forecast Unit Shipment 2019-2023

[image source]

AR and VR will be at the center of digital transformation and the spending of different companies and consumers will increase by an additional 80%, according to this report. Virtual and augmented reality hardware will comprise more than half of the projected spending.

The personal and consumer services will lead to this growth at $1.6 billion, followed by retail, and discrete manufacturing. AR is expected to overtake the VR market spending as early as this year or by the next year.

#2) Play Games In VR/AR on your Phones

According to a report by Valuates, the VR and AR market is expected to grow at a CAGR of 63.3 percent between 2018 and 2025. It will reach $571 billion CAGR by 2025. This growth will mostly result from the continued use of smart devices, an increase in Internet connectivity, and growth in mobile gaming.

North America continues to have the largest share of the VR and AR market but the Asia-Pacific market will expand the largest, with China, India, Japan, and South Korea experiencing the highest demand for head-mounted gaming device displays in the virtual reality market.

Nevertheless, the industry will continue to struggle due to the lack of effective user experience design and slow adoption in underdeveloped economies.

#3) VR and AR are coming to your regular smartphones and tablets.

According to a report by Vnyz Research, the AR and VR market will see a 48.8% growth CAGR during the projected period 2020 – 2025. It will reach 161.1 billion in revenue by 2025.

The market will grow due to increasing acceptance of AR and VR, and responsiveness about the technology. The industry will see the amalgamation of AR and VR to produce a mixed reality that will be implemented for prospective applications.

AR and VR Market will grow with 48.8 percent CAGR to 2025

In addition to technological development, the primary drivers for this growth will be the rapid growth in the adoption of tablets, computers, and smartphones, and the excessive concentration of major tech players in AR and VR worldwide.

Currently, the hardware market leads the software market in terms of revenue. However, the software market will witness a faster growth due to an increase in demand in the media and entertainment industry to meet needs such as AR-based simulating of games.

The healthcare and retail domain of the economy will lead to the adoption growth of AR and VR.

Between AR applications and VR applications, AR-based consumer application has the largest share according to this report, more than the commercial, aerospace and defense, enterprise, healthcare, and others. The largest demand for virtual reality applications is coming from commercial applications.

North America region was accounted for the majority of the share in the AR and VR industry last year, which is true so far. However, the Asia-Pacific market witnessed the fastest growth during the forecast period. The growth in the Asia-Pacific market would be led by increased investment in the defense and commercial domains in the region.

According to this report, the market would expand as a result of the increase in industrialists and technological enhancements.

The report says that the main players in the AR and VR market are Alphabet Inc., Oculus VR, LLC, Microsoft Corporation, Qualcomm Technologies Inc., Intel Corporation, Himax Technologies Inc., Samsung Electronics Co. Ltd., PTC Inc., and Sony Corporation.

#4) Make more money with virtual and augmented reality content

The below image depicts that VR and AR industry will grow with CAGR of 18.5% during 2018 – 2025. 

VR AR Content Creation Market Statistics

According to this AlltheResearch study, the growth of content in this market will result from an increase in demand for AR and VR devices, as well as an increase in the number of AR VR headset manufacturers such as Google, HTC, Oculus, and others.

Users continue to download the VR and AR content on their smartphones – especially AR capable mobile devices – from Google store, Oculus store, and others.

The growth in demand for 360 degrees videos will continue providing opportunities for content creators to provide this kind of content.

The training sector, especially in employers for training and promotional purposes, is expected to dominate the growth of VR and AR market in the coming years. According to this report, companies such as Walmart, Boeing, UPS, and others are using AR VR for training purposes and this is or has been generating demand for the content.

This is even, as companies such as Boeing and Agco, continue to see benefits of using AR for purposes of training such as a reduction in operational time. Boeing has seen a decrease of 25% in its operational time as a result of using augmented reality headsets.

The report divides content type as games, 360-degrees videos; by application such as 3D modeling, training, monitoring, and others; and by end-users such as automotive, consumer industry, aerospace, defense, healthcare, logistics, and retail industry.

#5) There will be high demand for AR/VR chipsets

This report says that the growth of the AR/VR chip market will represent a CAGR of 23 percent growth from 2019 to 2026.

It profiles many AR/VR chip manufacturers including Qualcomm Technologies Inc., NVIDIA Corporation, Imagination Technologies Limited, MEDIATEK Inc., Intel Corporation, Spectra 7, Advanced Microdevices Inc, International Business Machine Corporation, Samsung Electronics Co. Ltd, and Huawei Technologies Co. Ltd.

The increase in usage of the chips will result from the competitive consumer electronics market as players continue upgrading the quality of smartphones, laptops and digital recorders, and others. An increase in penetration of mobile devices and gaming consoles, and an expanding gamer’s community will fuel this growth during the focus period as due to the advancement in technology.

For instance, the number of video gamers will expand by 90%.

VR AR experts by Region:

VR AR experts by region

VR AR experts by Designation:

VR AR experts by designation

#6) Attend Live Events in VR/AR

According to this study by Goldman Sachs Global Investment Research, the consumer applications including video games, live events, and video entertainment will in the coming 9 years, lead to $18.9 billion with video games sector, leading at $11.6 billion; while enterprise categories led by healthcare at $5.1 billion, engineering, real estate, retail, military, and education will attract $16.1 billion in market value.

Future Virtual Reality Trends

The below image depicts some VR/AR use cases:

AR VR future use cases

[image source]

#1) Learning, Training, and Treatments in VR/AR

The below image depicts the VR/AR users graph in the USA.

VR AR users in USA

Currently, usage of mixed reality is increasing in healthcare, education, shopping, and tourism industries in the recent past, even during coronavirus pandemic. For instance, in healthcare, it is being trialed or implemented in virtual-home-based therapy and surgery. In this case, it is being used alongside other technologies such as video, sensors, and monitors.

Virtual reality could be adopted largely in treating patients with phobias and anxiety disorders. It is used in therapy for people with autism to help them develop social and communication skills. Eye-tracking technologies based on AR and VR are employed in the diagnoses of patients with visual or cognitive impairments.

In education and training, remote VR and AR training systems are being increasingly employed during COVID-19 outbreak even as lockdowns or partial economic inactivity continues. The same is happening in the field of tourism.

The merger of artificial intelligence, augmented reality, and virtual reality will enhance the customization of VR and AR content as the customers would like. That said, about 30 million people will use VR in the USA in the year 2021, according to a survey by eMarketer.

#2) Experience VR/AR on Your Mobile Phone and Headset on-the-go

AR VR headset sales forecast by IDC:

AR VR headset sales forecast by IDC

The size challenge for AR and VR – especially VR, is huge because powerful processing hardware that is usually large is needed for generating graphics that are contained within the headset.

Recommended Reading =>> Best Augmented Reality Glasses

We have seen the tendency for tethered experiences where high-end VR experiences have mostly been capable when the headsets are being tethered on personal computers where the computer is the main processing device. However, this presents a huge mobility problem because the cable can’t go that long.

We are now seeing non-tethered high-end virtual reality headsets, for instance on HTC Vive, Oculus Quest, Valve, and others. We also have Apple’s forthcoming 8K combined VR/AR glasses which will not be a tethered headset.

#3) Experience VR/AR Without Downloading Apps And on the Web

The below image shows a consumer use-case roadmap to 5G:

A consumer use case roadmap to 5G

[image source]

The impact of 5G on mobile apps will be big and so will be its impact on AR and VR, especially AR. By default, AR and VR, especially VR, require high data transfer even on cloud, processing, and formation of virtual images. This will improve with the introduction of 5G support on more mobile and Internet devices.

Additionally, 5G is set to boost experience level even in low bandwidth and low-powered environments. Hence, 5G will allow people to enjoy many better-augmented experiences on cheaper headsets and devices.

In addition to 5G, WebVR is already increasing the adoption of virtual reality. For one, WebVR makes it possible to watch VR and AR content without having to download native apps on the user’s mobile phones or computer devices. This is because it allows users to experience VR and AR on Google Chrome, Mozilla Firefox, and other web browsers.

#4) Immersive Sporting And Events

Here is a Video on Immersive Sporting and Events:

Sporting events are now joining gaming in the world of immersive experiences. Big sporting companies and events are already investing in virtual and augmented reality for purposes of enhancing sporting and events.

For instance, so many people and companies have been turning to virtual and augmented reality during the lockdowns related to COVID-19 to host virtual but immersive meetings and events beyond the ordinary video meetings. Examples include the National Football League teams such as the Dallas Cowboys, New England Patriots, and San Francisco 49ers.

Better VR and AR technologies will enable fans to feel immersed in games and employees and partners can feel immersed and engaged in meetings and events.

AR and VR marketing campaigns are now common in virtual shopping, product reviews, virtual retail walkthroughs. They are making it possible for companies to produce immersive and better consumer experiences than the usual video-based campaigns.

#5) Cheaper VR/AR Headset And Devices

High-end VR and AR experiences are less affordable on average these days, mainly because of the high price of VR headsets, which cost the tune of $400 at the minimum, although it is still possible to afford the cheap cardboard devices – which give very low-quality experiences, at the tunes of $20.

The mid-range headsets such as the Samsung VR headset, which provide mid-range quality of experiences, cost slightly more or less than $150. At the organizational level, virtual reality technologies such as the simulation training and health systems and developer kits are highly-priced even for many mid-sized organizations to afford.

However, virtual and augmented reality technologies, like mobile phone technologies, will also become more affordable with time with continued investment in them. This is already beginning to happen, especially for AR, even as more companies keep manufacturing, sponsoring, or branding headsets and related devices and content.

Benefits Of Virtual Reality

#1) More enjoyable than traditional video

Here is a video on the Benefits of VR:

 

The immersive nature of VR and AR makes the content enjoyable. The fact that the user is viewing something they like is one thing and immersing them into it is another. With life-size images and interactivity, customers enjoy doing what they like with the power of the feeling of presence in what they are viewing.

#2) Another dimension of interactivity

The below image shows an example – the Tesla suit is a full-body VR suit with haptic feedback, motion capture, and a biometric system.

Tesla suit is a full body VR suit

[image source]

Virtual and augmented reality engages the user in real-time, to participate in what they are exploring, for instance through VR controllers and with eyes in the gaze control mode.

As such, users can control avatars and characters in the immersive video the way they want. This is another dimension of immersion and has opened many opportunities for VR gamers, learners, trainers, remote maintenance teams, and VR users in marketing and other fields.

#3) Self-guided tours and explorations

The fact that VR users can view 360-degree and VR and AR content from their point of view which can be different from the story-teller is a huge shift from the ordinary video content.

The story-teller won’t have to twist the story the way they want and influence the viewers because the latter can look for more and detailed evidence (than in an ordinary video story) for what is being narrated, in the same content.

#4) Virtual and without risking your life

Organizations can recreate, test, and simulate real-world activities whether for military, healthcare provisioning, and education-based training or other purposes without having to risk their staff and employees by exposing them to dangerous scenarios.

#5) Saves on cost

This is self-explanatory. When students and their trainers engage in VR-based virtual training, which is beneficial due to its immersive and engaging nature, instead of going to the field, organizations save on travel and other expenses.

Challenges For VR Industry

#1) Affordability

The high price is discouraging regular and ordinary usage.

#2) No or very little demand from the customer side

For companies venturing into and adopting virtual reality, there is virtually no competition in the market. This discourages the development of VR and AR systems and its acceleration in adoption. Mostly, the technology is adopted by tech enthusiasts and early adopters. This is improving even as adoption move beyond gaming and entertainment.

There is also lacking viable business models. Companies are lacking viable cost-effective business models and strong industry standards and vision to drive the industry are lacking.

#3) Technology is unproven

Not just content-wise, but there is a low application of technology in real life with only a handful of total users globally. There is also a handful of VR content platforms and not as much of VR content is available.

That said, many people don’t care about VR because they do not use it on a day-to-day basis. Many people have no idea of VR and what it is capable of, and VR is not reaching the target audience money-wise. There are only a few demonstrations and examples of use-cases.

#4) Customers lacking options

Low adoption means there are not many headsets or VR systems out there, and this then limits customer options, especially in the high-end device categories.

#5) Health concerns

Virtual reality is not proven to have serious long term health effects but the studies containing proof for any benefits are few. The technology also requires improving for customers to stop experiencing temporary side-effects such as blurred vision, nausea, headache, and queasiness.

Conclusion

This virtual reality tutorial discusses the future of virtual reality technology. Most studies show the potential of the technology that will be observed soon – in the range of 5 to 10 years – given advances in technologies such as smartphones and Internet technologies and as devices and technologies become more affordable and less costly.

We saw that the benefits of VR have proved its potential in the future, although there are challenges to be overcome for VR to reach its full potential.