We project global XR revenues to grow from $3.8 billion in 2017 to $56 billion in 2022.
ARtillery Intelligence’s latest industry forecast quantifies XR revenue and that of its sub-sectors including AR, VR and the enterprise and consumer segments of each. What are the breakdowns and strategic takeaways? To access the 90-slide report, subscribe to ARtillery PRO, or purchase a la carte.
There’s been volatile interest and investment in AR & VR over the past 24 months. But how big are these sectors, and how big will they get? ARtillery Intelligence has quantified the revenue opportunity in several AR & VR product areas. The result is our latest XR revenue forecast.
Applying market sizing and forecast experience from 15 years of analyst work (see methodology section), ARtillery Intelligence has devised a disciplined and independent revenue forecast for XR, segmented into sectors like AR, VR and enterprise and consumer sub-divisions of each.
The following pages provide market revenue projections within each product category, and bulleted insights all along the way. This is meant to qualify the revenue drivers and rationale behind the numbers. And we’ll go deeper on specific data segments in future monthly reports.
Lastly, to characterize ARtillery Intelligence’s overall position on XR revenue growth, we maintain a cautiously optimistic view. Growth and scale will come but slower than previous industry excitement and rhetoric indicated, due partly to the pace of adoption and other signals we track.
Excerpt: Key Takeaways
Takeaways and growth dynamics for XR and its sub-sectors.
Consumer AR will grow from $* million in 2017 to $* billion in 2022, a 105 percent compound annual growth rate (CAGR). Near-term revenues will be dominated by the mobile form factor. Revenues will also be software-centric during that time (mobile device sales aren’t counted in this forecast) and will include premium apps and in-app purchases. The latter will dominate software revenues in the near term, due to consumer hesitance to pay upfront for AR apps, as well as the in-app revenue model validated by Pokémon Go. Niantic will find success in its platform… see full report for the rest.
Enterprise AR will grow from $*million in 2017 to $*billion in 2022, a 120 percent compound annual growth rate (CAGR). This makes it the largest XR sub-sector in 2022. Scale will result from wide applicability across enterprise verticals; and a form factor that supports all-day use and clear ROI (e.g. manufacturing efficiencies). Adoption is currently dampened by typical organizational inertia, enterprise risk aversion and sales cycles. ARtillery Intelligence believes these factors will continue to stunt enterprise AR growth but will be outweighed eventually by the momentum … see full report for the rest.
Consumer VR will grow from $*million in 2017 to $*billion in 2022, a 29 percent compound annual growth rate (CAGR). Like enterprise VR, it will be hardware-dominant in early years as its installed base is established. Over time, software (in this case, games and apps) will eclipse hardware revenues with a faster refresh cycle. A greater installed base of hardware will also incentivize VR content creators to invest in long-form content, resulting in more robust VR content libraries and greater software spending per user (ARPU). Premium apps will dominate software… see full report for the rest.
Enterprise VR will grow from $*billion in 2017 to $*billion in 2022, a 53 percent compound annual growth rate (CAGR). Though strong in its own right, it will hold the smallest share of XR revenues among the sub-sectors measured in this forecast. VR will be stronger as a consumer play (see previous slide), while AR is stronger in the enterprise. These VR shortcomings (relatively speaking) in the enterprise stem from the medium’s inherent isolation, which inhibits some job functions and share of time per working day. This is especially true in industrial functions where … see full report for the rest.
ARtillery Intelligence follows disciplined best practices in market sizing and forecasting, developed and reinforced through its principles’ 18 years in research and intelligence in the tech sector. This includes the past 2.5 years covering AR & VR as a main focus.
This report focuses on AR and VR revenue projections in various sub-sectors and product areas. ARtillery Intelligence has built financial models that are customized to the specific dynamics and unit economics of each. These include variables like unit sales, company revenues, pricing trends, market trajectory and several other micro and macro factors that ARtillery Intelligence tracks.
This approach primarily applies a bottom-up forecasting methodology, which is secondarily vetted against a top-down analysis. Together, confidence is achieved through triangulating revenues and projections in a disciplined way. For more information on what’s included and not included in the forecast, see the slide above.
Price: $699 (w/ analyst briefing) $499 (w/o briefing)
This 90-slide report is available by subscribing to ARtillery PRO, or purchasing a la carte. The individual report price is $699. including a briefing with the report’s author to discuss takeaways and answer any questions you may have. It can also be purchased without a briefing for $499.
Disclosure and Ethics Statement
ARtillery Intelligence has no financial stake in the companies mentioned in this report, nor received payment for its production. With respect to market sizing, ARtillery Intelligence remains independent of players and practitioners in the sectors it covers. It doesn’t perform paid services or consulting for such companies, thus mitigating bias — real or perceived — in market sizing and industry revenue projections. Disclosure and ethics policy can be seen in full here.