What are analysts saying are the biggest opportunities for growth (product or market) within the AR/VR industry over the next 5 years?
Hello, and thank your for using Wonder for your question about the AR/VR industry!
In short, the AR/VR industry is expected to grow significantly in the next 5 years, as more and more industries adopt the technology to expand their services, marketing, and customer experience. Even conservative estimates put the market revenue at $80 billion by 2025, but some even go as far as predicting a $150 billion by 2020.
We were able to find quite a lot about this market through media and industry websites.
Please find a detailed analysis — with a dedicated Swiss section — below.
POTENTIAL GROWTH IN RAW NUMBERS
Firstly, the global AR/VR market is expected to grow significantly in the coming years in terms of revenue and market size.
Goldman Sachs predicts a market worth $80 billion by 2025, with the hardware segment of the market contributing $45 billion and the software segment making up $35 billion in revenue.
Tim Merel from Digi Capital has a much more optimistic outlook, predicting a $150 billion market revenue by 2020, with about $120 billion coming from hardware and $30 billion from software, respectively.
Zion Market Research predicts a $133.78 billion market by 2021.
For now, gaming is still the biggest driver of the market. Data from Statista suggests that VR gaming revenue will reach $22.9 billion by 2020, a significant increase from the $660 million generated in 2015.
Analyst firm IDC predicts that VR and AR headset shipments will hit 100 million units by 2021. Again, this is a significant growth compared to the 10 million units from last year.
TREND PREDICTIONS FOR THE INDUSTRY
An article on the FuturePi section of medium.com predicts the following key advancements in the AR/VR/MR industry:
The human body (especially the hands) will be a key controller in AR/VR applications.
Eye-tracking will play a big role in the second wave of major VR devices.
There are many opportunities in introducing custom physical objects you can manipulate and feel in immersive experiences.
Artificial Intelligence (more specifically, conversational A.I.) will play a key role in VR/AR experiences, fundamentally changing how we interact within its boundaries.
When asked about what the potential future of VR holds for businesses, entrepreneurs had the following to say:
Brands Will Use VR to Improve Customer Loyalty — Businesses and brands will engage consumers with story-driven VR experiences that educate and entertain.
Teleconferencing will evolve — VR will allow business meetings to take on a more personal and natural feel.
It will improve e-commerce for products that require fitting — AR and VR will have a big impact on online shopping. Shopping for things that need to fit well (like clothing and furniture) will be helped by this technology.
Education — Companies that can offer educational products that use VR/AR have a real opportunity.
Product design — VR/AR will enhance the ability to design products.
Consumer experience -VR/AR provides the opportunity to create the “anywhere” experience so that a user can manipulate a product and get a better understanding of what they’re buying.
Entertainment — VR/AR can make you really feel like you're sitting at the Super Bowl, or get fully immersed in a gaming world or a movie.
Real Estate — There’s a huge opportunity for any company that will be able to assist realtors in capturing real-time imagery of each property in a manner that is timely and user-friendly.
HR — HR departments will be able to work remotely from anywhere in the world.
Health and Fitness -VR/AR will become a performance hack for anyone who wants to visualize the future.
Job experience — VR/AR will be able to facilitate learning and relationship building in a business setting.
Another article suggests there are many creative ways to utilize VR in starting a business. For example, one could open a VR Cafe with Google cardboard glasses, or even an Oculus or HTC Vive if you have the funds. Another idea is a VR marketing agency that helps companies run VR-based campaigns.
According to analysis by IDC, in the next 5 years — besides the massive overall growth of the market in general — "consumer spending will lead the way in Western Europe, with discrete manufacturing, retail, and process manufacturing showing strong growth by the end of the forecast."
SWITZERLAND, THE INNOVATOR
We can now move on to Switzerland specifically. All of the aforementioned market trends can be applied to the Swiss market as well. According to TechCrunch, there are several Swiss startups that utilize VR in ways that are predicted by industry analysts. As the article notes, Switzerland has a major advantage in terms of technological research and innovation.
MindMaze, for example, is a neuro-rehabilitation platform that helps stroke victims to recover faster by “fooling” the brain through VR/AR technology.
Artanim Interactive specializes in the development of cutting-edge immersive and interactive systems around motion capture and VR which they were invited to showcase at the 2016 Sundance Film Festival.
Another developer, OzweGames, created the first multiplayer game in the world for the Samsung Gear VR helmet. It doesn't require a controller and was developed by engineers and designers in Lausanne.
An article at Ondaco mentioned the MindMaze rehabilitation program as well, and also showcases another example of AR/VR implementation in Club Med Travel Store's services. Instead of catalogs, VR headsets are used to promote travel locations through an immersive experience, making the business the first of its kind.
To sum it all up, the entire AR/VR market is expected to grow significantly in the coming years. This is true for the Swiss market as well, but one notable edge that the country definitely has is that it's a hub of technological research and innovation.
Opportunities seem to be endless in terms of the adoption and utilization of the technology, ranging from VR-assisted marketing campaigns to products in rehabilitation and educational materials. Video games are still a major segment of the market as well.
It should be noted that most of these opportunities remain untapped for now, as there are only a handful of companies adopting the technology in ways other than gaming or entertainment. Part of the projected market growth is based on the expectation that this will change drastically as more and more people recognize the potential of AR/VR.
A Swiss company introducing any of the aforementioned creative uses of VR wouldn't be unexpected, however, since some of the earliest examples of creative VR adoption come from Switzerland.
Thank your for using Wonder!