Extended Reality Market Segmentation:
Component Segment Analysis
The hardware segment is projected to acquire a revenue share of 65.7% by the end of 2035, on account of the rapid technological advancements of hardware components, which have led to the development of affordable, miniaturized, and more powerful technologies. For example, in September 2024, Meta introduced Orion, an advanced pair of AR glasses. The lightweight glasses are best suited for use in both indoor and outdoor environments and are equipped with holographic displays and AI. Miniaturization of hardware components automatically leads to a decline in finished XR-based products and services, contributing to increasing market affordability.
Application Segment Analysis
By the end of 2035, the virtual reality (VR) segment is expected to account for extended reality (XR) market share of 56.1%, owing to rising demand across a wide range of industries, including healthcare, education & training, gaming, retail, automotive, and interior design, and healthcare. For example, in December 2022, Honda revealed its involvement in leveraging VR technology in the development of the full-electric 2024 Honda Prologue. The company boosted collaboration with different engineering and design groups with the use of VR environments. The growing availability of relevant hardware technologies, including VR headsets, is also expected to bolster the dominance of the segment.
Industry Vertical Segment Analysis
The gaming segment is anticipated to hold a 30.5% share of the extended reality (XR) market by the end of 2035. The gaming craze among youngsters and adults is creating a profitable environment for extended reality technology manufacturers. Companies are increasingly investing in research and development related to the integration of XR technology in gaming. As reported by NPR in April 2022, popular gaming company Epic Games received an investment of USD 2 billion from Kirkbi and Sony Group Corp for the acceleration of progress in building the metaverse and creating spaces for gamers, where they can have fun with friends through immersive experiences.
Our in-depth analysis of the extended reality market includes the following segments:
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