The AR and VR consumer market swelled by an impressive 72% in 2017 to reach a value of $3.2 billion, according to analysis from IHS Markit.
Key factors in this growth are a steadily increasing user base that is proving happy to put more of their money into the ballooning number of content, apps and location-based VR entertainment. While VR is likely to remain a fairly niche market for the next few years, IHS Markit still sees it hitting 75.7 million users by 2021.
“The consumer AR market is inherently better positioned than VR, because AR features are relevant to a wider cross-section of content and application categories,” said Piers Harding-Rolls, research and analysis director, IHS Markit.
“A smartphone-driven AR market offers a huge addressable audience, but this scale will be offset to an extent by the more limited use cases for handheld and small-screen dedicated AR experiences. Even so, consumer AR’s overall market potential will significantly outweigh VR over the next five years.”
AR technology is beginning to find widespread use among apps in a wide verity of sectors. Spending on apps with AR features across the entertainment, games, retail, social and communications sectors was $2 billion in 2017.
“Consumer use of AR technology will be dominated by smartphones over the next few years,” Harding-Rolls said. “AR headsets are making progress, but we expect to find early consumer traction within niche applications — such as training for sports and drone flying — but not as devices for general use.”
The growth in the VR market has not been sluggish or disappointing though. The installed base rose to 28 million in 2018, up from 18 million in 2016. There has also been a significant increase in location-based VR venues, with a 52% growth from 2016 to 8,945.
The entry of standalone headsets into the market over the next few years is also likely to a bump in install numbers. This, plus a general reduction in the cost of headsets, will see the VR hardware market hit $5.9 billion in 2021.