Extended Reality (XR) Market Size & Share, by Component (Hardware, Software, Services); Technology {Virtual Reality (VR), Augmented Reality (AR), Mixed Reality (MR)}; Solution (Consumer Engagement, Business Engagement); Device Type (Mobile, Personal Computer, Headset); End-user (Gaming, Education, Retail, Industrial, Manufacturing, Healthcare, Media, Entertainment, Aerospace, Defense) - Global Supply & Demand Analysis, Growth Forecasts, Statistics Report 2023-2035

  • Report ID: 4863
  • Published Date: Apr 29, 2023
  • Report Format: PDF, PPT

Global Market Size, Forecast, and Trend Highlights Over 2023-2035

Extended Reality (XR) Market size is estimated to cross USD 1423.73 Billion by the end of 2035, growing at a CAGR of 33.60% during the forecast period, i.e., 2023-2035. In the year 2022, the industry size of extended reality was over USD 44.03 Billion.The growth of the market can be attributed to the growing demand for advanced technologies such as virtual reality (VR), augmented reality (AR), and mixed reality (MR). The number of VR users around the world has reached more than 170 million. Currently, 79% of Americans are familiar with virtual reality technology. As of 2019, 15 million AR and VR devices had been sold. Globally, the number of VR/AR devices shipped in 2023 is expected to increase to 67 million. As technology advances, more companies are investing in extended reality technology in order to keep up with the competition and capitalize on the growing demand for immersive experiences. This demand is being driven by the need for more engaging content, such as video games, educational materials, and other entertainment.

In addition to these, factors that are believed to fuel the extended reality market growth of extended reality include the growing demand for 3D visualization in various applications, the development of sophisticated hardware and software solutions, and the emergence of artificial intelligence and IoT devices. Currently, there are 15 billion Internet of Things devices, which is expected to grow by over threefold by 2030 to 26 billion. A total of USD 745 billion was spent on IoT in 2020. A trillion dollars are predicted to be spent on IoT globally by 2022. With the help of machine learning algorithms, AI and IoT devices are capable of collecting and analyzing data in real-time, enabling them to make decisions based on the data collected. This can help create more immersive experiences in extended reality applications, such as virtual reality and augmented reality.

Extended Reality Market
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Extended Reality Sector: Growth Drivers and Challenges

Growth Drivers

  • The Rapid Acceptance Of Extended Reality In The Healthcare Industry - For instance, a new training model was added to the HoloSecnarios platform by immersive healthcare training solutions provider GigXR to enhance learning curves. The initiative integrates Basic Life Support (BLS) training into the HoloSecnarios platform that utilizes mixed reality (MR) technology to deliver immersive learning experiences to healthcare professionals. Extended reality market is being used in healthcare to help doctors and surgeons better understand complex anatomical structures and diseases. XR can be used to create 3D models of organs, simulate medical procedures, and provide real-time medical imagery for physicians. This technology can help improve medical accuracy, reduce costs, and facilitate better patient care.
  • Increasing Number of People Choosing Gaming As A Career- A survey of 1,500 respondents across 25 metros, Tier-1 and Tier-2 cities across India found that 85% of tier two gamers and 83% of tier one gamers are inclined toward gaming as a career. The increase in eSports professionals, streamers, and gaming influencers has enabled the extended reality market to reach new heights as the demand for gaming-related equipment and technology continues to rise. Also, among the most popular VR gaming headsets in 2019, PlayStation VR sold 5 million units.
  • Businesses Transitioning to Remote Working - On a global scale, about 17% of companies operate completely remotely, and around 63% of employees aged 22 to 65 claims that they work remotely sometimes. Extended Reality (XR) provides the tools to bridge the gap between the physical and digital worlds, providing businesses with the capability to replicate the office environment remotely. By using XR, businesses can reduce the costs associated with traditional office spaces, while also providing workers with more flexibility.
  • Rapidly Growing Entertainment Sector - For instance, a total of 27 billion was invested in the Indian Media & Entertainment sector in 2020, a 24% increase over the 17% contribution that they made in 2019. Companies are now investing heavily in technologies that can create realistic 3D VR environments for remote viewing of events. This will give viewers the feeling of being at the event in person, without having to leave the comfort of their homes.
  • Continuous Emergence of 5G Technology - Researchers estimate that about 1.6 billion people in the world will have access to 5G by the year 2024. Presently, China leads the global 5G race, accounting for 48% of 2020's investment. 5G technology has the potential to provide a seamless, high-definition experience for end-users. Furthermore, 5G offers high bandwidth, low latency, and improved scalability, which are all essential for supporting the large amount of data that Extended Reality (XR) applications require. This is expected to ultimately allow the market to expand and develop more quickly.

Extended Reality (XR) Market: Key Insights

Base Year


Forecast Year




Base Year Market Size (2022)

~ USD 44.03 Billion

Forecast Year Market Size (2035)

~ USD 1423.73 Billion

Regional Scope

  • North America (U.S., and Canada)
  • Latin America (Mexico, Argentina, Rest of Latin America)
  • Asia-Pacific (Japan, China, India, Indonesia, Malaysia, Australia, Rest of Asia-Pacific)
  • Europe (U.K., Germany, France, Italy, Spain, Russia, NORDIC, Rest of Europe)
  • Middle East and Africa (Israel, GCC North Africa, South Africa, Rest of the Middle East and Africa)
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Extended Reality Segmentation

Technology {Virtual Reality (VR), Augmented Reality (AR), Mixed Reality (MR)}

The global extended reality market is segmented and analyzed for demand and supply by technology into virtual reality (VR), augmented reality (AR), mixed reality (MR). Out of these, the virtual reality (VR) segment is estimated to gain the largest market share of about ~39% in the year 2035. The growth of the segment can be attributed to the increasing use of virtual reality in various industries such as entertainment, education, healthcare, and retail, owing to its immersive experience. Moreover, a virtual reality system has become as common in homes as a laptop or a television, and the number of VR users is continuously growing each year as the technology becomes more widely available. Approximately 170 million people around the world use VR in some way. 68 percent of VR users intend to increase their VR usage in the coming year. According to reports, there are predicted to be more than 10 million VR units sold in the year 2021. Furthermore, the increasing availability of VR hardware and software, and the declining cost of VR headsets are also expected to drive the growth of the VR segment.

Component (Hardware, Software, Services)

The global extended reality market is segmented and analyzed for demand and supply by component into hardware, software, and services. Out of these, the hardware segment is estimated to gain a significant market share of about ~47% in the year 2035. The growth of the segment can be attributed to the increasing demand for the development and adoption of head-mounted displays, smartphones, motion sensors, and other hardware components in extended reality applications. The hardware segment is also projected to witness the highest growth rate owing to the increasing investments in the development of extended reality technology. Companies are investing heavily in the research and development of extended reality hardware, such as headsets and haptic gloves, which are necessary for a fully immersive experience.

Our in-depth analysis of the global market includes the following segments:

      By Component

  • Hardware
  • Software
  • Services

     By Technology

  • Virtual Reality (VR)
  • Augmented Reality (AR)
  • Mixed Reality (MR)

      By Solution

  • Consumer Engagement
  • Business Engagement

      By Device Type

  • Mobile
  • Personal Computer
  • Headset

       By End User

  • Gaming
  • Education
  • Retail
  • Industrial and Manufacturing
  • Healthcare
  • Media and Entertainment
  • Aerospace and Defense
  • Others

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Extended Reality Industry - Regional Synopsis

North American Market Forecast

The extended reality market in North America is projected to be the largest with a share of about ~35% by the end of 2035. The growth of the market can be attributed majorly to the increasing demand for immersive technologies in the aerospace and defense sectors. Having a strong manufacturing base, a highly skilled workforce, and access to research and development resources, the United States is home to the world's largest aerospace industry. The A&D industry is increasingly using extended reality technologies such as VR, AR to improve the efficiency and accuracy of their operations. These technologies help in simulating and training aircraft pilots, personnel maintenance and repair, and logistics. In addition, it was announced in 2021 that Microsoft had been awarded a contract from the U.S. Army for 120,000 Microsoft HoloLens augmented reality headsets, worth up to USD 20 billion over a ten-year period. Moreover, high adoption rate of AR and VR technologies in various end use industries, along with the availability of high-speed internet connectivity, and the presence of leading technology companies in the region is projected to drive regional market growth.

APAC Market Statistics

The Asia Pacific extended reality market is estimated to be the second largest, registering a share of about ~26% by the end of 2035. The growth of the market can be attributed majorly to the increasing demand for immersive experiences, growth in the gaming industry, and increasing investments in the development of extended reality solutions. These factors, coupled with the growing popularity of extended reality-based devices such as smart glasses, are driving the growth of the market. Consumer-facing smart glasses are becoming increasingly popular in China. In October 2022, Hangzhou-based Rokid released a new intelligent terminal for AR glasses, Rokid Station, which is aimed at enriching the content ecology and bringing users more applications. Additionally, Xiaomi's AR glasses hold the fourth largest market share in China. Additionally, the increasing disposable income of citizens and the rising demand for virtual reality media are also factors that are driving the growth of the market in the Asia Pacific region.

Europe Market Forecast

Further, the extended reality market in the Europe, amongst the market in all the other regions, is projected to hold a majority of the share by the end of 2035. The growth of the market can be attributed majorly to the rising demand for Head-mounted displays (HMDs) from the ever evolving gaming and entertainment sector in the region. With the emergence of 5G technology and increasing investments in the entertainment sector, HMDs are becoming increasingly popular among consumers. This is expected to boost the demand for extended reality products, such as HMDs, in Europe. Governments of European countries are heavily investing in the development of extended reality technologies, which is resulting in increased adoption of these technologies in various industries. For instance, as part of the Virtual and Augmented Reality Industrial Coalition's roadmap for VR/AR in Europe, over 40 EU organizations are operating and investing in these technologies. The roadmap has been endorsed by the European Commission.

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Extended Reality Market Size
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Companies Dominating the Extended Reality Landscape

    • Accenture plc
      • Company Overview
      • Business Strategy
      • Key Product Offerings
      • Financial Performance
      • Key Performance Indicators
      • Risk Analysis
      • Recent Development
      • Regional Presence
      • SWOT Analysis
    • Qualcomm Technologies Inc.
    • Varjo
    • SoftServe Inc.
    • Northern Digital Inc.
    • Sony Corporation
    • Facebook Inc.
    • Unity Technologies
    • Adobe Inc.
    • Alphabet Inc.


In The News

  • Varjo has launched an Unreal Engine and Unity platform for its VarjoReality Cloud platform. As a ready-to-use enterprise software as a service (SaaS), this product allows for full-scale VR/XR cloud streaming to be performed anywhere, at any time, and with any device that is supported.
  • Qualcomm Technologies Inc. announced the launch of the Snapdragon XR2+ Gen 1 platform for mixed and virtual (MR and VR) devices. In the latest Snapdragon XR2+ Gen 1 premium-tier XR platform, OEMs will be able to offer richer metaverse experiences packed into the lighter form factor thanks to new power and thermal improvements.

Author Credits:  Abhishek Verma, Hetal Singh

  • Report ID: 4863
  • Published Date: Apr 29, 2023
  • Report Format: PDF, PPT

Frequently Asked Questions (FAQ)

Increasing demand for advanced technologies, such as augmented reality (AR), virtual reality (VR), and increasing use of extended reality technology in various industries, such as manufacturing, healthcare, and entertainment are the major factors driving the market growth.

The market size of extended reality is anticipated to attain a CAGR of ~33.60% over the forecast period, i.e., 2023 – 2035.

High costs associated with the development and implementation of extended reality technology are estimated to be the growth hindering factors for the market expansion.

The market in the North America region is projected to hold the largest market share by the end of 2035 and provide more business opportunities in the future.

The major players in the market are Accenture plc, Qualcomm Technologies Inc., Varjo, SoftServe Inc., Northern Digital Inc., Sony Corporation, Facebook Inc., Unity Technologies, Adobe Inc., Alphabet Inc. and others.

The company profiles are selected based on the revenues generated from the product segment, the geographical presence of the company which determines the revenue generating capacity as well as the new products being launched into the market by the company.

The market is segmented by component, technology, solution, device type, end-user industry and by region.

The virtual reality segment is anticipated to garner the largest market size by the end of 2035 and display significant growth opportunities.
Extended Reality (XR) Market Report Scope

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