USA Augmented Reality and Virtual Reality Market Outlook to 2028

USA Augmented Reality and Virtual Reality Market Overview

In 2023, the USA Augmented Reality and Virtual Reality Market was valued at USD 10.5 Bn driven by increasing adoption of AR and VR technologies across various sectors, including gaming, healthcare, retail, and education. The advancements in hardware, such as VR headsets and AR glasses, and the development of immersive content have further propelled market expansion.

The USA AR & VR market is highly fragmented and include major technology giants and specialized companies. Prominent players including Microsoft Corporation, Facebook (Meta Platforms, Inc.), Google LLC, Sony Corporation, and Apple Inc.

In 2023, a major development in the AR/VR market was Facebook's (Meta Platforms, Inc.) release of the Oculus Quest 3, an advanced standalone VR headset. This new device offers higher resolution displays, improved tracking, and enhanced user experiences, driving consumer interest and market growth.

California leads the USA AR and VR market, driven by the concentration of technology companies and investment in innovation. The presence of major tech companies, a robust startup ecosystem, and substantial venture capital funding contribute to the region's dominance in the market.

USA Augmented Reality and Virtual Reality Market Segmentation

The USA AR & VR market is segmented by various factors like product, application, and region.

By Product: The USA AR and VR market is segmented by product type into hardware, software, and services. In 2023, the hardware segment dominated the market. The segment includes AR glasses, VR headsets, and related accessories. This dominance of the hardware segment is attributed to the continuous advancements in AR/VR devices and the increasing consumer demand for high-quality immersive experiences.

By Application: The USA AR and VR market is segmented by application into gaming, healthcare, retail, and education. In 2023, the gaming segment held the largest market share. The dominance of this segment is due to the high consumer demand for immersive gaming experiences and the continuous development of advanced VR gaming consoles and AR mobile games.

By Region: The USA AR and VR market is segmented by region into north, south, east, and west. The North region dominated the market in 2023. The North region is home to prestigious universities and research institutions such as MIT, Harvard, and Stanford's East Coast operations, which are at the forefront of technological research and development.

USA Augmented Reality and Virtual Reality Market Competitive Landscape

Company

Establishment Year

Headquarters

Microsoft Corporation

1975

Redmond, WA

Meta Platforms, Inc.

2004

Menlo Park, CA

Google LLC

1998

Mountain View, CA

Sony Corporation

1946

Tokyo, Japan

Apple Inc.

1976

Cupertino, CA

Sony Corporation: In 2023, Sony Corporation introduced a new Play Station VR2, featuring improved resolution, wider field of view, and advanced tracking capabilities. This development is expected to further solidify Sony's position in the VR gaming market. Moreover, Microsoft's integration of Holo Lens with AI and machine learning technologies is poised to revolutionize enterprise applications and training programs.

Meta Platforms, Inc.: In 2023, Meta Platforms, Inc. launched the Oculus Quest 3, a state-of-the-art standalone VR headset. This new device features higher resolution displays, improved tracking, and enhanced user experiences. The launch has been met with consumer interest, leading to a surge in sales and further driving the adoption of VR technologies.

USA Augmented Reality and Virtual Reality Market Analysis

USA Augmented Reality and Virtual Reality Market Growth Drivers

Increasing Demand in Healthcare Applications: The AR and VR market in the USA is witnessing substantial growth due to their increasing use in healthcare. In 2023, hospitals and medical institutions invested around USD 1.7 billion in AR and VR technologies for training, remote surgeries, and patient care, demonstrating an important uptake in these technologies for practical medical applications. The demand for AR/VR solutions in this sector is expected to rise further, driven by their effectiveness in enhancing medical training and improving patient outcomes.

Expansion in the Gaming Industry: The gaming industry remains a pivotal driver for the AR and VR market in the USA. Major game developers and platforms are increasingly adopting AR and VR to create immersive gaming experiences. This trend is supported by substantial investments in gaming content and hardware, such as Meta’s Oculus Quest and Sony’s Play Station VR2, which continue to attract a large consumer base. Additionally, the AR headset market is expected to ship over 50 million units by 2026 compared to 11 million units in 2021.

Growth in Remote Collaboration Tools: The rise in remote working and virtual collaboration has fueled the demand for AR and VR tools. Over 500 US companies had either incorporated VR into their operations or were actively in the process of doing so as of 2022. These technologies help bridge the gap in physical distance, providing effective solutions for remote communication and collaboration, thus driving market growth.

USA Augmented Reality and Virtual Reality Market Challenges

Limited Consumer Accessibility: Despite technological advancements, the high cost of AR/VR hardware limits consumer accessibility. In 2024, the average price of a high-end VR headset was around USD 600, which is an important expenditure for average consumers. This price barrier restricts the widespread adoption of AR and VR technologies among the general public, impacting market growth.

Technical Limitations: AR and VR technologies still face technical challenges, such as limited battery life, motion sickness, and the need for high computing power. In 2023, studies indicated that one third of VR users experienced motion sickness during extended use. These technical limitations can hinder user experience and slow down the adoption rate of AR/VR technologies.

USA Augmented Reality and Virtual Reality Market Government Initiatives

Department of Defense Investments: In 2023, the US Department of Defense allocated a substantial amount for the development and integration of AR/VR technologies in training and simulation programs. This initiative aims to enhance the training efficiency of military personnel, providing realistic and immersive simulation environments. Such substantial government investments are driving the growth and innovation in the AR/VR market.

Educational Technology Programs: In 2024, the Department of Education announced an initiative to incorporate AR and VR technologies into the education system. This program aims to enhance interactive learning experiences in K-12 and higher education institutions, facilitating better student engagement and understanding of complex subjects through immersive learning environments.

USA Augmented Reality and Virtual Reality Future Market Outlook

The USA AR & VR market is poised for remarkable growth, driven by advancements in AR/VR hardware, integration with 5g technology, and expansion into new industries.

Future Market Trends

Advancements in AR/VR Hardware: Over the next five years, advancements in AR/VR hardware are expected to drive market growth. Companies will develop lighter, more comfortable devices with higher resolutions and improved battery life. By 2028, these innovations will make AR/VR technologies more accessible and appealing to a broader consumer base, further expanding the market.

Integration with 5G Technology: The rollout of 5G technology will enhance the capabilities of AR and VR by providing faster data speeds and lower latency. By 2028, the widespread availability of 5G will enable seamless AR/VR experiences, supporting applications in gaming, healthcare, and remote collaboration, and driving significant market growth.

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