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VR Global Revenue Forecast, 2020-2025

 

Executive Summary

Like many research & intelligence firms, one of the things that ARtillery Intelligence does is market sizing. A few times per year, we go into isolation and bury ourselves deep in financial modeling. This takes the insights and observations we accumulate throughout the year, and synthesizes them into revenue estimates for the current and future spatial computing industry (methodology details here).

In covering spatial computing for six years, our sector knowledge base and perspective continue to expand. That occurs on several levels, including insight and access to insider information, all of which informs our forecast models and inputs. Further reinforcing that knowledge position, the daily rigors of editorial production at our sister publication AR Insider reinforces our market insights.

Beyond knowledge position and market-sizing process, the focus of these forecasts likewise continues to evolve. Our first market forecast five years ago examined AR, VR and all their revenue subsegments. In recent years, we’ve begun to produce separate forecasts for AR and VR. Though they share technological underpinnings, their nuanced market dynamics deserve standalone examination.

This year, we continue that focused approach. After publishing forecasts in July on mobile AR*, and September on head-worn AR**, we now turn attention in this report to VR. This includes a revenue outlook for key categories such as hardware, software, consumer and enterprise spending. Other subdivisions include revenue categories like location-based entertainment.

So what did we find out? Our outlook continues to be best characterized as cautiously optimistic, especially when compared to several large research firms that turn attention to VR occasionally to publish eyepopping revenue estimates in the hundreds of billions of dollars. By comparison, we’re comfortably and confidently in the tens-of-billions range for aggregate VR spending in outer years of this financial outlook.

The question is how VR is materializing today? How are revenues trending? Which subsectors are most opportune? How will Meta’s ongoing investments accelerate the sector? And how will VR fare in the post-Covid era? We tackle these questions through numbers & narratives.

Figures reflect market factors at the time of creation. Always see chart date for context, and refer to newer projections if applicable.

 

Price: $1,499

The fastest and most cost-efficient way to get access to this report is by subscribing to ARtillery PRO (Startup or Enterprise Tier). You can also purchase it a la carte.

 

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What’s Covered?

 

Methodology

ARtillery Intelligence follows disciplined best practices in market sizing and forecasting, developed and reinforced through its principles’ 16 years in research and intelligence in tech sectors. This includes the past 6 years covering AR & VR as a main focus.

This report focuses on 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 (a key consideration when evaluating findings) see the above slide.

More about ARtillery Intelligence’s market-sizing methodology can be seen here and more on its credentials can be seen here.

Disclosure & Ethics Statement

Unless specified in its stock ownership disclosures, ARtillery Intelligence has no financial stake in the companies mentioned in its reports. The production of this report likewise wasn’t commissioned. With all market sizing, ARtillery Intelligence remains independent of players and practitioners in the sectors it covers, thus mitigating bias in industry revenue calculations and projections. ARtillery Intelligence’s disclosures, stock ownership and ethics policy can be seen in full here.

 

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Metaverse Reality Check: The What, When & Where

 

Executive Summary

If there’s one term that’s reverberated throughout AR and VR circles more than any other in 2021, it’s metaverse. Though it represents legitimate principles, the word itself has become co-opted and conflated through overuse… as it often goes with buzzwords.

In broad terms, ‘metaverse’ defines digital worlds that host synchronous human interaction. Mark Zuckerberg – intent on making Facebook a metaverse company – describes it as an “embodied internet,” offering the connectivity, utility, and entertainment of the web, but fleshed out in 3D.

This is usually discussed in VR terms, such as digital domains that host synchronous interaction between place-shifted participants. Today, these include Altspace VR, Rec Room, and VRChat. We also have non-VR worlds like Fortnite, Roblox and (much earlier) Second Life. But these are collectively missing one key metaverse property: interoperability.

Meanwhile, the metaverse concept also applies to AR, as companies like Niantic build experiences and platforms for digital interaction with a physical world. These experiences are synchronous (experienced together at the same time) and persistent (anchored to locations). This metavearth was the topic of last month’s ARtillery Intelligence briefing.

Meanwhile, metaverse components and building blocks are being developed today. That will include a sort of metaverse stack, with access hardware, creation tools, 5G connectivity, sensory inputs, payment networks and identity protocols. These are each at early stages and need time to evolve and converge.

Even the metaverse’s use cases are unknown, though everyone likes to speculate. Novel use cases often aren’t devised until new platforms seep into the developer mindset. Apps like Uber – utilizing the mobile form factor and 4G – weren’t imagined when these enabling technologies were first devised or launched.

For that reason, we should be realistic about the metaverse’s timing. Its fully-actualized form – involving interoperable networks and devices – is likely years or even decades away. This qualifier rarely makes its way into metaverse musings that dominate tech headlines today.

In fact, if the VR and AR sectors should have learned anything in the circa-2017 hype cycle, it’s to not overpromise and underdeliver. That has set these industries back in terms of public sentiment and trust. The same dynamics will apply to the metaverse and its hype cycle.

Moreover, the metaverse requires a dose of caution in how it’s constructed. Given the immersive levels of user interaction and biometric tracking of an “embodied internet” nefarious intent could run rampant. And a new interactive paradigm provides opportunity to fix things that are sub-optimal on today’s 2D web.

But how will all of this come together? How will economies develop in the metaverse? What are the missing pieces? And what lessons does today’s web teach us? We’ll tackle these questions throughout this report in our own analysis and that of top minds we’ve assembled to weigh in. The goal, as always, is to empower you with a knowledge edge.

 

Companion Video

 

Methodology

This report highlights ARtillery’s Intelligence viewpoints, gathered from its daily in-depth coverage of spatial computing. To support the narrative, data are cited throughout the report. These include ARtillery Intelligence’s original data, as well as that of third parties. Data sources are attributed in each case.

For market sizing and forecasting, ARtillery Intelligence follows disciplined best practices, developed and reinforced through its principles’ 15 years in tech sector research and intelligence. This includes the past 4 years covering AR & VR exclusively, as seen in research reports and daily reporting.

Furthermore, devising these figures involves the “bottom-up” market-sizing methodology, which involves granular ad revenue dynamics such as campaign pricing and spending. More about ARtillery Intelligence methodology can be seen here, and market-sizing credentials can be seen here.

Disclosure & Ethics Statement

Unless specified in its stock ownership disclosures, ARtillery Intelligence has no financial stake in the companies mentioned in its reports. The production of this report likewise wasn’t commissioned. With all market sizing, ARtillery Intelligence remains independent of players and practitioners in the sectors it covers, thus mitigating bias in industry revenue calculations and projections. ARtillery Intelligence’s disclosures, stock ownership and ethics policy can be seen in full here.

 

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Geolocal AR: The Metavearth Materializes

 

Executive Summary

One of AR’s fundamental properties is to fuse the digital and physical. As such, the real world is a key part of that formula… and real-world relevance is often defined by location. As the saying goes for real estate value, it’s all about three factors: location, location, location.

With that backdrop, one of AR’s battlegrounds will be in augmenting the world in location-relevant ways. That could be wayfinding with Google Live View, or visual search with Google Lens. Point your phone (or future glasses) at places and objects to contextualize them.

As these examples suggest, Google has a key stake in this “Internet of Places,” or what we’ve been calling the “metavearth.” It’s driven to future proof its core business, where the camera will be one of many search inputs. And it has valuable geo-local data from products like Maps and Street View to support its efforts.

But Google isn’t alone. Apple signals interest in location-relevant AR through its geo-anchors. These evoke AR’s location-based underpinnings by letting users plant and discover spatially-anchored digital content. Facebook is similarly building “Live Maps” as a component of its multi-sided AR master plan.

Then there’s Snap, the king of consumer AR. Erstwhile propelled by selfie-lenses, its larger AR ambitions will flip the focus to the rear-facing camera to augment the broader canvas of the physical world. Meanwhile, Niantic continues to rule geo-local AR gaming through Pokémon Go as well as its Lightship platform that will geo-enable third-party AR developers.

Beyond tech giants and other usual suspects, there are compelling startups positioning themselves at the intersection of AR and geolocation. These include Foursquare, Gowalla, ARWay, Resonai, Darabase, YouAR, and a growing list of others.

If any of this sounds familiar, it’s aligned with a guiding principle for AR’s future: The AR cloud. Otherwise known as AR’s metaverse, this is a conceptual framework in which invisible data layers coat the inhabitable earth to enable AR devices to trigger geo-specific experiences.

But true to the many tech-giant efforts just outlined, it won’t just be one cloud or metaverse, as these singular-tense terms suggest. Multiple geo-located AR networks and experiences will compete. Like the web today, the AR cloud will ideally have standards and protocols for interoperability, while allowing for proprietary content and networks to coexist.

But rather than websites, this proprietary content will be in “layers.” The thought is that AR devices can reveal certain layers based on user intent and authentication. You’ll activate the social layer for social-graph activity, and the commerce layer to find products.

There are of course several moving parts. 5G will help achieve millimeter-level precision for geolocated AR. LiDAR will meanwhile unlock advanced optics that can enable the high-scale crowdsourced 3D data needed to spatially map the inhabitable earth. It will be a group effort.

But how will this all come together? What are the missing pieces? And who’s doing what so far? We’ll tackle these questions throughout this report by profiling the biggest players that are planting their flags for the future of geo-local AR. The goal, as always, is to empower you with a knowledge edge.

 

Price: $999

The fastest and most cost-efficient way to get access to this report is by subscribing to ARtillery PRO. You can also purchase it a la carte.

 

Companion Video

 

Methodology

This report highlights ARtillery’s Intelligence viewpoints, gathered from its daily in-depth coverage of spatial computing. To support the narrative, data are cited throughout the report. These include ARtillery Intelligence’s original data, as well as that of third parties. Data sources are attributed in each case.

For market sizing and forecasting, ARtillery Intelligence follows disciplined best practices, developed and reinforced through its principles’ 15 years in tech sector research and intelligence. This includes the past 4 years covering AR & VR exclusively, as seen in research reports and daily reporting.

Furthermore, devising these figures involves the “bottom-up” market-sizing methodology, which involves granular ad revenue dynamics such as campaign pricing and spending. More about ARtillery Intelligence methodology can be seen here, and market-sizing credentials can be seen here.

Disclosure & Ethics Statement

Unless specified in its stock ownership disclosures, ARtillery Intelligence has no financial stake in the companies mentioned in its reports. The production of this report likewise wasn’t commissioned. With all market sizing, ARtillery Intelligence remains independent of players and practitioners in the sectors it covers, thus mitigating bias in industry revenue calculations and projections. ARtillery Intelligence’s disclosures, stock ownership and ethics policy can be seen in full here.

 

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Headworn AR Global Revenue Forecast, 2020-2025

 

Executive Summary

Like many research & intelligence firms, one of the things that ARtillery Intelligence does is market sizing. A few times per year, we go into isolation and bury ourselves deep in financial modeling. This takes the insights and observations we accumulate throughout the year and synthesizes them into hard numbers for the current and future spatial computing industry (methodology details here).

In covering spatial computing for six years, our sector knowledge base and perspective continue to expand. That occurs on several levels, including insight and access to insider information, all of which informs our forecast models and inputs. Further reinforcing that knowledge position, the daily rigors of editorial production at our sister publication AR Insider emboldens our market insights.

Beyond knowledge position and market-sizing process, the focus of these forecasts likewise continues to evolve. Our first market forecast five years ago examined AR, VR and all their revenue subsegments. Last year, we began to produce separate forecasts for AR and VR. Though they share technological underpinnings, their nuanced market dynamics deserve standalone examination.

We continue to double down on that segmentation by focusing this report on headworn AR specifically. Given its unique dynamics – in both technology and user adoption patterns – it compels its own focused analysis. This allows us to go deeper on key revenue sources like consumer, corporate & industrial, and AR-enablement software. We did the same earlier this year for mobile AR.

So what did we find out? Our outlook continues to be best characterized as cautiously optimistic, especially when compared to several large research firms that turn attention to AR occasionally to publish eyepopping revenue estimates in the hundreds of billions of dollars. By comparison, we’re comfortably and confidently in the tens-of-billions range for aggregate mobile AR spending in outer years of this financial outlook.

The burning questions: How is headworn AR pacing? Which subsectors are most opportune? And how is AR primed for the post-Covid era? We answer these questions through numbers & narrative in this slide-based report. The goal, as always, is to empower you with a knowledge position.

Figures reflect market factors at the time of creation. Always see chart date for context, and refer to newer projections if applicable.

 

Price: $1,499

The fastest and most cost-efficient way to get access to this report is by subscribing to ARtillery PRO (Startup or Enterprise Tier). You can also purchase it a la carte.

 

Video Companion

 

What’s Covered?

 

Methodology

ARtillery Intelligence follows disciplined best practices in market sizing and forecasting, developed and reinforced through its principles’ 16 years in research and intelligence in tech sectors. This includes the past 6 years covering AR & VR as a main focus.

This report focuses on AR 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 (a key consideration when evaluating the figures) see slide 5.

More about ARtillery Intelligence’s market-sizing methodology can be seen here and more on its credentials can be seen here.

Disclosure & Ethics Statement

Unless specified in its stock ownership disclosures, ARtillery Intelligence has no financial stake in the companies mentioned in its reports. The production of this report likewise wasn’t commissioned. With all market sizing, ARtillery Intelligence remains independent of players and practitioners in the sectors it covers, thus mitigating bias in industry revenue calculations and projections. ARtillery Intelligence’s disclosures, stock ownership and ethics policy can be seen in full here.

 

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Web AR: Best Practices & Case Studies

 

Executive Summary

There’s growing sentiment in the mobile AR world that apps aren’t the optimal vessel. Yet the technology lives on a device where apps rule. 90 percent of mobile users’ time is spent in apps versus the browser. Can AR break that cycle? And if so, could web AR be the answer?

What is web AR? In short, it delivers AR experiences through the mobile browser. Advantages include dynamism for AR’s serendipity and short sessions, versus the friction of app stores and downloads. There, “activation energy” dampens AR adoption which is already challenged to begin with.

For example, will consumers spend 90 seconds downloading an app for an experience that lasts 30 seconds? Consider this in light of dynamic AR activations within a store aisle or real-world social interaction. These scenarios happen fast and need an AR delivery system that can be the same.

In these moments of dynamic activation, AR formats that can be launched quickly – and with broad compatibility – will find the most commercial success. These factors will also grow in importance as brands and retailers increasingly plant AR activation markers everywhere from websites to product packaging to public-space signage.

Web AR also inherits the qualities of the web, meaning interoperability with common web standards and functions. For example, web AR campaigns can utilize tools like Google Analytics for nuanced campaign metrics. The same level of performance tracking isn’t possible on other popular AR channels and walled gardens such as social apps.

Beyond functional advantages, one of web AR’s benefits is its potential reach. Because of mobile platform fragmentation, developers and marketers building app-based ads and experiences must choose a lane… or jump through hoops to develop creations that can be distributed across platforms.

The web is conversely operable across all smartphones. This allows for the widest range of devices that a given AR ad campaign can reach. This is an important consideration, given the relatively small size of the consumer AR base. Fragmenting that already finite universe diminishes addressable market.

Synthesizing all these factors, ARtillery Intelligence estimates that web AR’s addressable market is 3.06 billion global smartphones today – the greatest reach of any AR platform. Yet it’s among the least-used consumer AR formats, due mostly to its nascent status. Altogether, this means that web AR has more headroom and growth potential than any other AR delivery channel.

But how will web AR reach that potential? What are best practices for web AR experiences and marketing campaigns? And who’s doing it right so far? We’ll tackle these questions and others throughout this report, including numbers, narratives, and case studies. The goal, as always, is to empower you with a knowledge edge.

 

Price: $999

The fastest and most cost-efficient way to get access to this report is by subscribing to ARtillery PRO. You can also purchase it a la carte.

 

Video Companion

 

Methodology

This report highlights ARtillery’s Intelligence viewpoints, gathered from its daily in-depth coverage of spatial computing. To support the narrative, data are cited throughout the report. These include ARtillery Intelligence’s original data, as well as that of third parties. Data sources are attributed in each case.

For market sizing and forecasting, ARtillery Intelligence follows disciplined best practices, developed and reinforced through its principles’ 15 years in tech sector research and intelligence. This includes the past 4 years covering AR & VR exclusively, as seen in research reports and daily reporting.

Furthermore, devising these figures involves the “bottom-up” market-sizing methodology, which involves granular ad revenue dynamics such as campaign pricing and spending. More about ARtillery Intelligence methodology can be seen here, and market-sizing credentials can be seen here.

Disclosure & Ethics Statement

ARtillery Intelligence has no financial stake in the companies mentioned in its reports, unless specified in footnotes and endnotes. The production of this report likewise wasn’t commissioned. With respect to market sizing, ARtillery Intelligence remains independent of players and practitioners in the sectors it covers, thus mitigating bias in industry revenue calculations and projections. Disclosure and ethics policy can be seen in full here.

 

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Mobile AR Global Revenue Forecast, 2020-2025

 

Executive Summary

Like many research & intelligence firms, one of the things that ARtillery Intelligence does is market sizing. A few times per year, we go into isolation and bury ourselves deep in financial modeling. This takes the insights and observations we accumulate throughout the year and synthesizes them into hard numbers for the current and future spatial computing industry (methodology details here).

In covering spatial computing for six years, our sector knowledge base and perspective continue to expand. That occurs on several levels, including insight and access to insider information, all of which informs our forecast models and inputs. Further reinforcing that knowledge position, the daily rigors of editorial production at our sister publication AR Insider emboldens our market insights.

Beyond knowledge position and market-sizing process, the focus of these forecasts likewise continues to evolve. Our first market forecast five years ago examined AR, VR and all their revenue subsegments. Last year, we began to produce separate forecasts for AR and VR. Though they share technical underpinnings, their nuanced market dynamics deserve deeper and focused treatment.

We continue to double down on that segmentation by focusing this report on Mobile AR specifically. Given its leading revenue position among AR segments, and its hardware installed base, it compels its own focused analysis. This allows us to go deeper on key revenue sources like consumer, corporate & industrial, advertising and commerce. We’ll do the same later this year for head-worn AR.

So what did we find out? Our outlook continues to be best characterized as cautiously optimistic, especially when compared to several large research firms that turn attention to AR occasionally to publish eyepopping revenue estimates in the hundreds of billions of dollars. By comparison, we’re comfortably and confidently in the tens-of-billions range for aggregate mobile AR spend in outer years of this financial outlook.

The burning questions: How is mobile AR pacing? Which subsectors are most opportune? And how is AR primed for the post-Covid era? We answer these questions through numbers & narrative in this slide-based report. The goal, as always, is to empower you with a knowledge position.

Figures reflect market factors at the time of creation. Always see chart date for context, and refer to newer projections if applicable.

 

Price: $1,499

The fastest and most cost-efficient way to get access to this report is by subscribing to ARtillery PRO (Startup or Enterprise Tier). You can also purchase it a la carte.

 

What’s Covered?

 

Methodology

ARtillery Intelligence follows disciplined best practices in market sizing and forecasting, developed and reinforced through its principles’ 16 years in research and intelligence in tech sectors. This includes the past 6 years covering AR & VR as a main focus.

This report focuses on AR 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 (a key consideration when evaluating the figures) see slide 5.

More about ARtillery Intelligence’s market-sizing methodology can be seen here and more on its credentials can be seen here.

Disclosure & Ethics Statement

Unless specified in its stock ownership disclosures, ARtillery Intelligence has no financial stake in the companies mentioned in its reports. The production of this report likewise wasn’t commissioned. With all market sizing, ARtillery Intelligence remains independent of players and practitioners in the sectors it covers, thus mitigating bias in industry revenue calculations and projections. ARtillery Intelligence’s disclosures, stock ownership and ethics policy can be seen in full here.

 

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Camera Commerce: AR Monetization Materializes

 

Executive Summary

In AR’s early stages, a few areas stand out for their monetization potential and business case. We’ve examined such areas in past reports, including AR’s role in enterprise productivity, and its use in helping consumer brands add dimension to their product marketing.

But another branch of AR has potentially greater experiential impact for consumers, and revenue impact for brands: immersive shopping. Related to – but separate from – AR advertising, this is when AR is used as a tool to visualize and contextualize products for more informed consumer purchases.

This is a subset of AR that we call camera commerce. It comes in a few flavors, including visualizing products on “spaces and faces,” to see if they fit. It also includes visual search, which involves pointing one’s smartphone camera at a given product to get informational, identifying or transactional overlays.

Among these formats, product visualization is out of the gate first and has the most traction. Visual search is meanwhile less mature due to more complex technological underpinnings like computer vision. But it has greater monetization potential, given the high-intent use case of actively scanning items.

In each case, AR brings additional context and confidence to product purchases. And this value has been elevated during a pandemic when eCommerce itself has inflected. AR has brought back some of the product dimension and tactile detail that’s been taken away from consumers during retail lockdowns.

Beyond the pandemic, AR brings sustained value as a shopping tool as it’s proven to boost conversions in several eCommerce scenarios. For example, Shopify reports that products that offer 3D and AR visualization achieved 94 percent greater conversions on average than non-AR equivalents.

In addition to boosting conversion rates, the informed purchases that AR engenders can reduce return rates. For example, SeekXR reports that AR-guided purchases have 25 percent fewer returns than non-AR benchmarks. This is a welcome benefit for online merchants who suffer from margin-depleting product returns.

Beyond online shopping, camera commerce could find a home in brick & mortar retail. Specifically, it could develop as a utility for in-aisle interactions such as evoking product details. This could also support “touchless” retail shopping if epidemiological health measures sustain into the post-Covid era.

Synthesizing these factors – along with AR’s broader growth and cultural acclimation – ARtillery Intelligence estimates that AR will influence $36 billion in consumer spending by 2024. This means that AR will play a role in some part of the consideration funnel for these transactions.

But how will this all come together? What cultural and technological barriers loom? And who’s doing what? We’ll tackle these questions throughout this report, including numbers, narratives and case studies for camera commerce. The goal, as always, is to empower you with a knowledge edge.

 

Price: $999

The fastest and most cost-efficient way to get access to this report is by subscribing to ARtillery PRO. You can also purchase it a la carte.

 

Video Companion

 

Methodology

This report highlights ARtillery’s Intelligence viewpoints, gathered from its daily in-depth coverage of spatial computing. To support the narrative, data are cited throughout the report. These include ARtillery Intelligence’s original data, as well as that of third parties. Data sources are attributed in each case.

For market sizing and forecasting, ARtillery Intelligence follows disciplined best practices, developed and reinforced through its principles’ 15 years in tech sector research and intelligence. This includes the past 4 years covering AR & VR exclusively, as seen in research reports and daily reporting.

Furthermore, devising these figures involves the “bottom-up” market-sizing methodology, which involves granular ad revenue dynamics such as campaign pricing and spending. More about ARtillery Intelligence methodology can be seen here, and market-sizing credentials can be seen here.

Disclosure & 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, thus mitigating bias in industry revenue calculations and projections. Disclosure and ethics policy can be seen in full here.

 

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VR Usage & Consumer Attitudes, Wave V

 

Executive Summary

How do consumers feel about VR? Who’s using it? How often? And what do they want to see next? Perhaps more important, what are non-users’ reasons for disinterest? And how can VR software and hardware developers optimize product strategies accordingly?

These are the questions we set out to answer. Working closely with Thrive Analytics, ARtillery Intelligence wrote questions to be presented to more than 46,000 U.S. adults through Thrive’s established consumer survey engine. The results are in and we’ve analyzed the takeaways in a narrative report.

This follows similar reports we’ve completed over the past five years (and last month’s similar report on AR). Wave V of the research now emboldens our perspective and brings new insights and trend data to light. All five waves represent a significant sample of U.S. adults for robust longitudinal analysis. This will continue to expand with each survey wave.

So what did we find out? At a high level, 23 percent of households own or have access to a VR headset, up from 19 percent in 2020. More importantly, VR users indicate high levels of satisfaction with the experience: 70 percent are either satisfied or extremely satisfied.

As for price sensitivity, demand inflects in the $200-$400 price range. This is notably the price range where Oculus Quest 2 resides. This validates evidence we’ve seen elsewhere – and market-sizing estimates we’ve made – for Quest 2’s growth. It continues to hold a quality edge, aggressive price competition, and accelerating VR market share.

Furthermore, standalone VR – embodied by Quest 2 and other emerging headsets – represents a key inflection point. Though still early, standalone VR addresses many consumer objections to PC-based VR including cost, confinement, and setup friction.

However, it’s not all good news: Non-VR users report relatively low interest in VR ownership – 20 percent, down from 29 percent in Wave IV – and explicit ambivalence towards the technology. This downward trend is concerning for VR, as public interest in the technology continues to wane from its peak during the industry’s circa-2017 hype cycle.

Moreover, the disparity between current-user satisfaction and non-user disinterest underscores a key challenge for VR: you have to “see it to believe it.” In order to reach high satisfaction levels, VR has to first be tried. This presents marketing and logistical challenges for the industry to push that first taste.

But if anything is going to bring that accessibility and interest to mainstream markets, it’s the lowered pricing and compelling play of standalone VR headsets like Quest 2. The device continues to turn heads and break pricing barriers, given Oculus’ loss-leader pricing strategy to subsidize hardware in order to build a network effect.

These points join several other strategic implications that flow from the latest consumer VR sentiments. We’ll examine those takeaways in the coming pages, including the latest wave of findings, and our analysis for what it means. The goal, as always, is to empower you with a knowledge edge.

 

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Methodology

ARtillery Intelligence has partnered with Thrive Analytics by writing the questions for the Virtual Reality Monitor consumer survey. These questions were fielded to more than 46,000 U.S. Adults. ARtillery Intelligence wrote this report, containing its insights and viewpoints on the survey results.

For market sizing and analysis, ARtillery Intelligence follows disciplined best practices, developed and reinforced through its principles’ 15 years in tech sector research and intelligence. This includes the past 5 years covering AR & VR exclusively, as seen in research reports and daily reporting.

Thrive Analytics likewise follows best practices in consumer research, developed over its long tenure as a consumer research firm. More details about the survey sample can be seen in this report’s introduction and more on ARtillery Intelligence research and methodology can be read here.

Disclosure & 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, thus mitigating bias in industry revenue calculations and projections. Disclosure and ethics policy can be seen in full here.

 

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Credentials & context

AR Usage & Consumer Attitudes, Wave IV

 

Executive Summary

How do consumers feel about mobile AR? Who’s using it? How often? And what do they want to see next? Perhaps more important, what are non-users’ reasons for disinterest? And how can app developers and anyone else building mobile AR apps optimize product strategies accordingly?

These are the questions we set out to answer. Working closely with Thrive Analytics, ARtillery Intelligence wrote questions to be presented to more than 43,000 U.S. adults through Thrive’s established consumer survey engine. The results are in and we’ve analyzed the takeaways in a narrative report.

This follows several months of ARtillery Intelligence Briefings that examine various segments of, and developing use cases for, consumer AR. Now a deeper view into real consumer usage and attitudes validates those narratives while providing new dimension on mobile AR strategies and opportunities.

So what did we find out? At a high level, mobile AR usage has grown to 29 percent of U.S. adults. Many of these users experience AR through dedicated AR apps, such as those built on Apple’s ARkit and Google’s ARCore. But there’s greater engagement with lower-friction experiences such as “AR-as-a-feature.”

Mobile AR users also appear active and engaged, with 59 percent reporting that they use it at least weekly. The top app category is gaming, which we attribute to Pokémon Go’s popularity. But other categories such as social AR and visual search continue to make headway. Mobile AR users also indicated high levels of satisfaction with their experiences.

But beyond these and a few other positive signals, there are negative signs and areas for improvement. For example, non-mobile AR users report low likelihood of adopting, and an explicit lack of interest.

This disparity between current-user satisfaction and non-user disinterest continues to underscore a key challenge for AR: you have to experience it to “get it.” But there’s little drive for non-users to get that first taste. This boils down to a classic “chicken & egg” dilemma that represents a core marketing challenge for AR.

Put another way, AR’s highly visual and immersive format is a double-edged sword. It can create strong affinities and high engagement levels. But the visceral nature of its experience can’t be communicated to prospective users through traditional marketing, such as ad copy or even video.

The same chicken & egg challenge was uncovered in corresponding VR consumer research that we’ll produce in a report like this next month. This makes it a common challenge for immersive tech, though AR is relatively advantaged by mobile ubiquity. Still, it will take time and acclimation before AR reaches a more meaningful share of the population.

Meanwhile, there are strategies to accelerate that process and to build AR apps that align with consumer affinities. In this report, we’ll examine such strategies and unpack the latest survey results. We’ll also examine the ways that Covid-19 impacted this year’s results. As always, the goal is to empower ARtillery Pro subscribers with a greater knowledge position.

 

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Methodology

ARtillery Intelligence has partnered with Thrive Analytics by writing the questions for the Virtual Reality Monitor consumer survey. These questions were fielded to more than 43,000 U.S. Adults. ARtillery Intelligence wrote this report, containing its insights and viewpoints on the survey results.

For market sizing and analysis, ARtillery Intelligence follows disciplined best practices, developed and reinforced through its principles’ 15 years in tech sector research and intelligence. This includes the past 5 years covering AR & VR exclusively, as seen in research reports and daily reporting.

Thrive Analytics likewise follows best practices in consumer research, developed over its long tenure as a consumer research firm. More details about the survey sample can be seen in this report’s introduction and more on ARtillery Intelligence research and methodology can be read here.

Disclosure & 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, thus mitigating bias in industry revenue calculations and projections. Disclosure and ethics policy can be seen in full here.

 

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Credentials & context

Enterprise AR: Best Practices & Case Studies, Volume I

 

Executive Summary

Though we spend ample time examining consumer-based AR endpoints, greater near-term impact is seen today in the enterprise.

This takes many forms including data visualization in corporate settings, or software to create customer-facing AR experiences for brands. But the greatest area of enterprise AR impact today is realized in industrial settings.

These industrial use cases include AR visualization to support assembly and maintenance in manufacturing facilities. The idea is that AR’s line-of-sight orientation can guide front-line workers. Compared to the “mental mapping” they must do with 2D instructions, line-of-sight support makes them more effective.

This effectiveness results from AR-guided speed, accuracy and safety. These micro efficiencies add up to worthwhile bottom-line impact when implemented at scale in industrial operations. Macro benefits meanwhile include lessening job strain and the “skills gap,” which can lead to preserving institutional knowledge.

For example, AR leader PTC reports up to 40 percent improvements in new employee productivity, 30 percent greater first-time fix rates, 50 percent reductions in training costs, and 25 percent reductions in materials scrap.

But it’s not all good news. Though all of these advantages are valid, it’s challenging to get to the point of realizing them. Practical and logistical barriers stand in the way, such as organizational inertia, politics, change management and fear of new technology among stakeholders like front-line workers.

The biggest symptom of these stumbling blocks is the dreaded “pilot purgatory.” As its name suggests, and as you may have heard in AR industry narratives, this is when AR is adopted at the pilot stage, but never progresses to full deployment. It’s the biggest pain point in industrial AR today.

In the past, ARtillery Intelligence has identified the sources and solution areas for pilot purgatory as the “3 Ps.” Comprising people, product and process, they’re the top areas where effective AR implementation strategies should focus.

With that backdrop, we continue the narrative in this report with an update on the enterprise AR opportunity, including new ARtillery Intelligence market sizing data. Moreover, we devote the bulk of this report to “show rather than tell.” We’ll do this through several case studies that demonstrate enterprise AR best practices and business cases.

To adequately represent these factors, we’ve reached out to leading enterprise AR players to collect their top case studies. We’ve then relayed these through our own lens and analytical rigor. We’ve prioritized case studies that have quantifiable results, actionable takeaways, and a wide variety of business verticals and use cases.

The goal in all of the above is to reveal the why and how of enterprise AR. Through the lens of industry best practices, why should enterprises invest in AR? And how should it be optimally implemented? The name of the game is to set up enterprise AR to succeed by deploying it from a position of confidence and knowledge.

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Methodology

This report highlights ARtillery’s Intelligence viewpoints, gathered from its daily in-depth coverage of spatial computing. To support the narrative, data are cited throughout the report. These include ARtillery Intelligence’s original data, as well as that of third parties. Data sources are attributed in each case.

For market sizing and forecasting, ARtillery Intelligence follows disciplined best practices, developed and reinforced through its principles’ 15 years in tech sector research and intelligence. This includes the past 4 years covering AR & VR exclusively, as seen in research reports and daily reporting.

Furthermore, devising these figures involves the “bottom-up” market-sizing methodology, which involves granular ad revenue dynamics such as campaign pricing and spending. More about ARtillery Intelligence methodology can be seen here, and market-sizing credentials can be seen here.

Disclosure & 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, thus mitigating bias in industry revenue calculations and projections. Disclosure and ethics policy can be seen in full here.

 

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Credentials & context