As reviewed in PwC’s report, Power shifts: Altering the dynamics of the M&E industry, VR is the fastest-growing segment, with 2020-2025 revenues rising at a CAGR of 30.3% to reach $6.9 billion in 2025 from $1.8 billion in 2020.
According to the same PwC report, VR headsets saw solid revenue growth of 30.7% YOY in 2020, although it fell short of its full potential on the back of the Covid-19 pandemic. The growth has been led by new game developments, improving VR technology, and consumer interest in high-quality mobile headsets. At the same time, VR headset providers have benefited from growth in commercial HMD applications.
Within the product mix, mobile VR revenue continues to grow at a strong pace, overtaking market share from standalone VR units, primarily due to the increasing penetration of smartphones.
According to a market analysis report from Grandview Research, within the VR segment, head-mounted display (HMD) devices constituted over 60% of the overall market share in 2020. HMD’s dominance is due to adoption in the M&E industry plus its application in educational, therapeutic, and training purposes across sectors. This is followed by gesture tracking devices (GTD) with ~20% market share, and the remaining ~20% by projectors and display walls (PDW).
Several technology giants have realized that AR/VR will be among the most widely used technologies and are building products. Notable active companies in the segment include Microsoft, Meta, HTC, Sony, Google, and HP. Several examples include:
Although gaming produces most of the VR content today, VR video will also see a 2020-2025 CAGR of 17.9%. Bulky and expensive headsets are the main growth-inhibiting factors. Still, 360-degree videos like NASA’s 360 view of the moon (which do not require a VR headset to view), have become popular on social media and could be indicative of VR video growth.
The eSports industry has received wide attention, with competitions held for games such as Riot Game’s LoL eSports, Blizzard’s Overwatch League, Activision’s Call of Duty League, and EA Sports FIFA 21 Global Series.
AR/VR continues to grow in eSports: Aim Lab is partnering with Riot Games to develop a VR First Person Shooter game based on Riot’s Arcane-themed animation. In addition, VR Master Leagues has emerged as a VR eSports league since 2017 with games such as Onward, Echo Arena, Pavlov, and Snapshot. eSports video game developers continue to look for opportunities to play and view their games with AR/VR technologies.