AR/VR Markets Forecasted to Recover from 2021 to 2025, Increasing Shipments Substaintially -- Strategy Analytics

Strategy Analytics predicts a strong recovery for the global Augmented Reality (AR) and Virtual Reality (VR) markets in 2021 after COVID-driven contraction in 2020. This recovery is expected to be spurred on by a 6 fold increase in XR (the combination of AR and VR) shipments, recent consumer-friendly innovations to AR headsets, and the adoption of smartphone-tethered VR.

David MacQueen, Director of the Virtual and Augmented Reality Service at Strategy Analytics noted, “We expect that the launch of smartphone-tethered AR headsets, such as those from Nreal and Samsung seen at CES at the start of the year to ramp up in late 2020/early 2021. We have raised our longer term forecast for XR hardware as a result of new work and life patterns in the 'new normal.' Work at home, training, education, and collaboration will all benefit from AR/VR.”

David Kerr.jpg — David Kerr, Strategy Analytics

David Kerr, VP at Strategy Analytics added, “ Initially attracting a 'hardcore' gaming audience willing to spend for a good quality experience, the audience for these devices has since broadened to include enterprises as well. The use of a fully immersive 3D environment started to prove its worth in design, particularly in the fields of engineering, automotive and architecture. Training and education are other verticals where VR has found a home.”

Key findings from the research include:

Total XR shipments will increase 6 fold through 2025.
XR hardware revenues will surpass $28 billion annually in 2025.
Samsung and start-up Nreal and other vendors will commercialize lightweight, consumer friendly AR headsets to drive strong growth in from the mid and low tier once these smartphone tethered devices reach the market.
At the lower end of the market, we anticipate 2021-22 seeing a slight comeback of smartphone-tethered VR headsets as a result of 5G launches by mobile operators.
Although we have increased our overall forecast for VR headsets, we have decreased slightly our anticipated shipments of console-tethered VR as a result of Microsoft’s decision not to support VR in the next generation Xbox.