AR/VR Worldwide Spending to Hit $18.8B in 2020

More affordable viewing models for entertainment expected to be a key driver.
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FRAMINGHAM, Mass.—Augmented and virtual reality are expected to get a shot in the arm in 2020 to the tune of $18.8 billion in global spending.

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That forecast comes from a report by International Data Corporation and its “Worldwide Augmented and Virtual Reality Spending Guide.” If the $18.8 billion figure comes true, it would represent a 78.5% growth over the $10.5 billion IDC projects as the final figure for 2019. This would be the start of what IDC sees as growing spending habits until 2023, as the organization is projecting a five-year compound annual growth rate of 77%.

A key for the growth of the AR/VR market, per IDC, is the declining cost of entry. Commercial industries are expected to use the technology primarily for training (projected $2.6 billion in spending) and industrial maintenance ($914 million). On the consumer side, it will be VR gaming ($3.3 billion) and VR feature viewing ($1.4 billion). Public fields are also expected to see significant growth in spending, especially in post-secondary and K-12 education and onsite assembly and safety.

“Across enterprise industries, we are seeing a strong outlook for standalone viewers play out in use case adoption,” said Marcus Torchia, research director, Customer Insights & Analysis. “Enterprises will drive much of these high-end headset adoption trends. In the consumer segment, more affordable viewer models for gaming and entertainment purposes will see the broadest industry adoption.”

In terms of what these companies will be buying, hardware is expected to account for nearly two-thirds of AR/VR spending over the five-year period, followed by software and services. Services will include systems integration, consulting services and custom application development.

U.S. projected spending ($5.1 billion) in 2020 is expected to trail only China ($5.8 billion). The U.S. and Western Europe are the two regions expected to see the fastest growth—104.2% CAGR for the Western Europe and 96.1% for the U.S.

More information on the report can be found on IDC’s website.