There is no doubt that we have just entered into a tremendous growth spurt within the virtual reality industry, and soon augmented reality will also follow suit. Affordable virtual reality, which had been promised to us gamers for nearly two decades, is finally coming to fruition, and with it will come billions of dollars of potential revenue. While gaming may seem to be the killer application for VR and AR, it will likely only represent around a third of the total revenue realized within the industry over the next 4-5 years.
So, just how fast with the VR and AR markets expand? A recent report by BCC Research has indicated that the VR and AR market, worth an approximate $4.5 billion last year (2015), is expected to grow around 2,500% by 2020 to $105.2 billion. If accurate, this rate of growth is simply staggering, and would have a curve that’s similar to that of the early smartphone market between 2006 and 2010. At the same time, both these technologies could provide even greater utility to users in the long run and even replace smartphone use to some extent.
“Many of the AR/VR applications being developed for smartphones and tablets are designed to enhance communication with the real world, which aligns with context-aware computing technology. For example, in sensor-based smart cities,” says BCC Research analyst Sinha G. “As a result, the increase in sales of smartphones and tablets has acted a driver for the virtual and AR market.”
While gaming is at the forefront of the industry right now, story telling, education, adult content and military use will all rank highly among virtual and augmented reality applications. The young industry we all know and love today will look completely different in just a couple of years as new companies enter the space, and new and improved hardware, peripherals, software, sensors and applications explode onto the scene. While investment may have leveled off as of late, once headsets are in the hands of consumers and developers begin figuring out just what the market wants, the interest of venture capitalists should pick up once more.
Let’s hear your thoughts on these staggering growth projections within the VR and AR industry. Discuss in the Future of Virtual Reality forum on VRTalk.com.