AR & VR - Asia

Asia

Revenue in the AR & VR market market in Asia is projected to reach €13.3bn in 2024.
Revenue in this region is expected to show an annual growth rate (CAGR 2024-2029) of 9.14%, resulting in a projected market volume of €20.6bn by 2029.
The largest market within the AR & VR market market in Asia is VR Hardware, which is expected to have a market volume of €4.3bn in 2024.
Most revenue is anticipated to be generated the United States, with a projected market volume of €10,110.0m in 2024.
In the AR & VR market market in Asia, the number of users is expected to amount to 2,423.0m users by 2029.
User penetration will be 52.7% in 2024 and is expected to reach 56.7% by 2029.
The average revenue per user (ARPU) in Asia is expected to amount to €6.1.
As of late 2023, Japan is witnessing a surge in AR and VR adoption, particularly in gaming and remote collaboration sectors, reflecting its innovative technological landscape.

Definition:

Augmented reality (AR) and virtual reality (VR) make it possible to combine the real and virtual worlds. AR is generally accessed via mobile phones and primarily relies on lenses. AR effects can be created by using lenses in social media apps, for example. AR is also used for displaying digital 3D objects in our surroundings, e.g., in gaming or eCommerce apps. Meanwhile, VR technology allows users to dive into the virtual world, and, unlike AR technology, it requires a headset device which enables the creation of virtual worlds.

Structure:

The AR & VR market consists of six different markets: AR Advertising, AR Hardware, AR Software, VR Advertising, VR Hardware, and VR Software. AR Advertising covers mobile advertising that is displayed in the most prominent social media apps. AR Hardware comprises AR headsets and glasses. AR Software is divided into three different application types, namely social media, gaming, and eCommerce applications, which can be accessed via the most prominent app stores. VR Advertising covers in-game advertising as well as advertising in VR videos. VR Hardware comprises both tethered head-mounted displays (HMDs) and stand-alone HMD headsets. Lastly, VR Software covers VR games and VR videos, which require headsets.

Additional information:

The market comprises revenues, users, average revenue per user, and penetration rates. Revenues are generated through in-app purchases, advertising spending, and consumer spending on apps, games, and hardware such as headsets or glasses. Sales channel data shows both online and offline revenues, which include VAT. The market only displays B2C revenues and users for the above-mentioned markets and markets; B2B and B2G revenues are not included. Additional definitions for each market can be found on the respective market pages.
Market numbers for VR headsets are also featured in the Consumer Market Insights, namely in the Gaming Equipment market of the Consumer Electronics market. Unlike the VR Hardware market in the Advertising & Media Outlook, the Gaming Equipment market also covers smartphone VR devices.
Key players in the market include companies such as Meta (Oculus VR), Microsoft (HoloLens), Snap Inc. with different lenses, and Nvidia, which offers computing hardware components.
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Analyst Opinion

The AR & VR market in Asia has been experiencing significant growth in recent years, driven by customer preferences for immersive and interactive experiences, as well as advancements in technology.

Customer preferences: Customers in Asia are increasingly seeking immersive and interactive experiences, which has fueled the demand for AR & VR technology. These technologies allow users to engage with content in a more immersive and realistic way, enhancing their overall experience. Additionally, the younger population in Asia, who are more tech-savvy and open to new experiences, are driving the demand for AR & VR products and services.

Trends in the market: One of the key trends in the AR & VR market in Asia is the adoption of these technologies in various industries. For example, in the gaming industry, virtual reality (VR) headsets are being used to provide gamers with a more immersive gaming experience. In the education sector, augmented reality (AR) is being used to enhance learning by providing interactive and engaging content. The healthcare industry is also leveraging AR & VR technologies for training purposes and to improve patient outcomes. Another trend in the market is the increasing availability and affordability of AR & VR devices. As technology advances and production costs decrease, AR & VR devices are becoming more accessible to a wider range of consumers. This has led to an increase in the adoption of these technologies across different segments of society, including both businesses and individuals.

Local special circumstances: Asia is a diverse region with different countries having their own unique characteristics and market dynamics. For example, in countries like China and South Korea, there is a strong gaming culture, which has contributed to the rapid growth of the AR & VR market in these countries. On the other hand, countries like Japan and Singapore have a strong focus on technology and innovation, which has also driven the adoption of AR & VR technologies.

Underlying macroeconomic factors: The rapid development of the AR & VR market in Asia can also be attributed to underlying macroeconomic factors. Asia has experienced strong economic growth in recent years, leading to an increase in disposable income and consumer spending. This has created a favorable environment for the adoption of new technologies, including AR & VR. Furthermore, Asia is home to some of the world's largest technology companies, which have been investing heavily in AR & VR research and development. These companies have the resources and expertise to drive innovation and bring new AR & VR products and services to the market. In conclusion, the AR & VR market in Asia is experiencing significant growth due to customer preferences for immersive and interactive experiences, as well as advancements in technology. The adoption of AR & VR technologies in various industries, the increasing availability and affordability of devices, and the unique market dynamics in different countries are all contributing to the growth of the market. Additionally, underlying macroeconomic factors, such as strong economic growth and investments from technology companies, are further driving the development of the AR & VR market in Asia.

Methodology

Data coverage:

The data encompasses B2C enterprises. Figures are based on the AR & VR market. AR and VR enable consumers to experience a new dimension, using either a headset or installed units, as they combine the real and virtual worlds. Consumer revenue figures refer to revenues relating to AR hardware, AR software, VR hardware, VR software, and spending on AR and VR advertising. Both digital and non-digital revenues are included.

Modeling approach / Market size:

Market sizes are determined through a top-down approach, building on specific predefined factors for each market market. As a basis for evaluating markets, we use annual financial reports of the market-leading companies and industry associations, as well as third-party studies and reports. In addition, we use relevant key market indicators and data from country-specific associations, such as consumer spending, internet penetration, 4G coverage, and historical developments. This data helps us estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the relevant market. For example, the S-curve function and exponential trend smoothing are well suited for forecasting digital products and services due to the non-linear growth of technology adoption. The main drivers are level of digitalization, adoption of technology, GDP per capita, and internet penetration.

Additional notes:

The market is updated twice a year in case market dynamics change. The data is modeled using current exchange rates. The impact of the COVID-19 pandemic and the Russia-Ukraine war are considered at a country-specific level. In some cases, the data is updated on an ad hoc basis (e.g., when new, relevant data has been released or significant changes within the market have an impact on the projected development).