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Consumers to Spend $27B on Virtual and Augmented Reality Next Year, 25% More than in 2022

Do you believe in the Metaverse?  Is the Metaverse the future of digital social interaction or a bizarre fad that among other things has dragged the share price of Facebook (now META) down by close to 30% this year alone?  Many large consumer brands from fashion to beverages are securing their space in this future virtual world at costs that seem outright ridiculous for a made-up world but, perhaps that’s just the price to “play” and many years from now we will be reading books on the brilliant minds that secured their place in the Metaverse for a song compared to the prices to come.  In just a few years, augmented reality (AR) and virtual reality (VR) have become one of the hottest tech trends, with millions of users worldwide. From social interactions in VR games and photo editing, to the enhanced and personalized shopping experience, AR and VR apps have found their use across different markets.

Photo: Trading Platforms

According to new data, global consumer spending on augmented and virtual reality is expected to hit almost $27bn next year, 25% more than in 2022. Virtual reality has been on the verge of becoming mainstream for years and now that some of the  biggest tech players, like Meta, have gambled the future of the company on virtual reality VR may be moving from fringe to mainstream.

In 2022, consumers worldwide are forecast to spend close to $10bn on VR hardware and software, according to a Statista survey. With the entire market thriving, user spending will jump by 27% to $12.7bn next year. Statista expects VR hardware revenues to hit $9.39bn in 2023, showing a 23% YoY growth. VR software spending is set to jump by 40% to $3.3bn.

Facebook Meta man at work hologram

The AR market has gone far from Snapchat filters, and Pokemon Go, the most popular examples of this technology, and revenue figures confirm that. Consumer spending on AR software and hardware will hit $11.5bn in 2022 and jump by another 20% to almost $14bn next year.

AR software revenues, the largest revenue stream of the entire market, will grow by 10% YoY to $11.6bn in 2023. On the other hand, AR hardware revenues will more than double, rising from $1.04bn to almost $2.4bn worldwide.

Statistics show that most AR/VR revenues come from the United States, China, and Japan as the top three markets. In 2022, US consumers are forecast to spend $6.1bn on AR and VR technology, or 22% of the total spending. This figure is expected to jump by 20% to $7.5bn next year.

China, the second largest market, will also witness a 20% growth next year, with AR and VR revenues rising from $4.5 to $5.5bn. Japanese consumers will spend $1.63bn on AR and VR technology in 2023, up from $1.31bn this year.

Besides surging revenues, the entire industry will also witness impressive user growth. Statista expects the whole market to reach over 2.2 billion people next year, or 200 million more than in 2022.