The AR/VR market will recover strongly in 2020 amid the pandemic

Strategy Analytics’ newly released free report, “The Impact of COVID-19 on the AR and VR Markets,” predicts that the global AR/VR market will see a strong recovery in 2021 after the COVID-19-induced market slump in 2020. 

Key findings from the report include:

Total XR shipments (VR headset forecast and dedicated AR headset forecast combined) will grow six-fold by 2025.

XR hardware revenue to exceed $28 billion by 2025

Vendors such as Samsung and startup Nreal will commercialize lightweight, consumer-friendly AR headsets to drive strong growth in the low- and mid-range markets after these smartphone-based VR devices enter the market.

At the low end of the market, we expect a slight recovery in smartphone-based VR headsets in 2021-22, driven by the rollout of 5G by mobile operators.

While we raise our overall VR headset forecast, we again slightly reduce console-based VR shipments due to Microsoft’s decision not to support VR on the next Xbox.

David MacQueen, Director of Virtual and Augmented Reality at Strategy Analytics, noted: “We expect AR headsets that connect to smartphones (such as the Nreal and Samsung AR headsets shown at CES earlier this year) to increase in late 2020/early 2021. Due to the new work and lifestyle under the "new normal" caused by the epidemic, we have raised our long-term forecast data for XR hardware. Working from home, training, education and other industries will benefit from AR/VR.”

David Kerr, Vice President at Strategy Analytics, added: “Originally appealing to a ‘hardcore’ gaming audience willing to pay for a premium experience, these devices are now beginning to broaden their audience and extend into the enterprise. The use of fully immersive 3D environments is beginning to prove its value in design, particularly in engineering, automotive and architecture. VR is also finding a home in other verticals such as training and education.”