Virtual and augmented reality revenues to hit $150bn by 2020, report claims

Revenues made by businesses harnessing virtual and augmented reality technology could hit $150bn by 2020, according to a new report conducted by Digi-Capital.

The report claims virtual reality tech will reach markets such as core games, 3D films and niche enterprise. It anticipates however that augmented reality tech will be able to address much wider markets and could be similar in size to smartphones and tablets.

In fact, it predicts AR could have hundreds of millions of users if hardware is available at a similar price point to mobile.

Though gaming has been touted by Microsoft as a key aspect of its own augmented reality tech HoloLens, for example, Digi-Capital predicts this will form only a small portion of AR revenues. The proportion of revenue from games in VR however is anticipated to be much higher.

The table below suggests that by 2020, the VR market will be worth $30bn, while AR could be worth as much as $120bn.

“AR software and services could have similar economics to today’s mobile market, as they both cannibalise and grow it,” said Digi-Capital MD Tim Merel.

“A large AR user base would be a major revenue source for TV/film, enterprise, advertising, and consumer apps from Facebook to Uber to Clash of Clans. Amazon and Alibaba would have an entirely new platform for selling to a mass audience. Together with innovative applications nobody has thought of yet, AR’s scale could prove a bonanza for mobile networks’ voice and data businesses. Someone has to pay for all that mobile data.”