Augmented and Virtual Reality Market by Type (Augmented Reality, Virtual Reality), Offering (Hardware, Software), Device (AR Devices, VR Devices), Application (Health and Safety, Training), End-use Industry and Geography - Global Forecast to 2032

The Augmented and Virtual Reality Market is projected to reach $ 367.5 billion by 2032, at a CAGR of 33.6% from 2025 to 2032. The growth of this market is attributed to the surging adoption of AR and VR technology by manufacturers and enterprises, the rising adoption of AR in the healthcare sector, the enormous rise in gaming and entertainment applications, and favorable initiatives by governments to propel the adoption of AR and VR technology in several sectors. However, the privacy and security concerns associated with AR and VR technology restrain the market growth to a certain extent.

The penetration of head-mounted displays for training purposes and increasing advancements in gadgets and digitization are expected to create significant opportunities for this market. However, the need for strong network infrastructure and health-related concerns associated with excessive AR usage pose challenges to the growth of this market.

Rising Adoption of AR in the Healthcare Sector Drives the Growth of the Augmented and Virtual Reality Market

With the integration of immersive technologies, AR technology is securing its footprints across multiple sectors; however, it is witnessing a gradual rise in healthcare and medical operations. The demand for graphics and input systems that enable users to interact with physical and digital objects in real time is increasing steadily. Integrating AR in healthcare is paving the way for better health results, providing more precise and accurate solutions.

The AR technology is used for medical training & learning, assists surgeons during operations by overlaying digital images onto the patient’s body, provides real-time guidance, and reduces the need for invasive procedures. This has led healthcare solutions providers to integrate immersive technologies for training and learning. For instance, in June 2025, Amrita Hospital (India) launched an extended reality (XR) supported ecosystem in healthcare with the integration of augmented reality (AR), virtual reality (VR), and mixed reality (MR) technologies to significantly enhance capabilities in patient care, medical training, and research.

Also, in January 2025, Education Management Solutions, LLC (U.S.), the industry leader in healthcare education solutions, launched its intelligent, immersive reality learning solution at the 2025 International Meeting for Simulation in Healthcare (IMSH). This solution blends traditional instruction with augmented reality to create a fully immersive simulation experience by fusing visual, virtual, wearable, biometric, and haptic feedback devices in medical simulation training to measure in three dimensions. Such developments in the healthcare sector to use immersive technologies for learning and training purposes are expected to support the growth of the market during the forecast years.

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Key Findings in the Global Augmented and Virtual Reality Market Study:

In 2025, the Augmented Reality Segment is Expected to Dominate the Global Augmented and Virtual Reality Market

Based on type, the global augmented and virtual reality market is segmented into augmented reality and virtual reality. In 2025, the augmented reality segment accounted for the largest share of the global augmented and virtual reality market. The large market share of this segment is attributed to its versatility and practical applications in various sectors such as gaming, retail, and education and increasing development in 5G technology. AR technology provides three features, including the combination of the digital and physical world, interactions made in real time, and accurate 3D identification of virtual and real objects. It offers users an interactive experience using software, apps, and hardware such as AR glasses, headsets, and head-up displays.

Some of the recent developments in this market space are as follows:

• In October  2025, XREAL, Inc. (U.S.) launched Xreal Air 2 and Xreal Air 2 Pro AR glasses. These glasses connect with smartphones, game consoles, and other devices, allowing users to open an app and view it on a virtual screen up to 330 inches.
• In June 2025, Apple Inc. (U.S.) launched Vision Pro, an augmented reality (AR) headset with a 3D camera that allows users to capture live events with spatial audio and blend digital content with the physical world, allowing users to stay present and connected to others.
• In October  2022, Almer Technologies AG (Switzerland) launched Almer Arc, an augmented reality (AR) remote assistance glasses aimed at the tech industry to connect remote workers and improve their communication.
• In June 2022, Burberry Group plc (U.K.) launched augmented reality (AR) functionality on Burberry.com to allow customers to virtually place a true-to-scale model of the signature bag within their environment.

Based on Offering, the Software Segment is Projected to Register the Highest CAGR During the Forecast Period

Based on offering, the global augmented and virtual reality market is segmented into hardware and software. The software segment is expected to grow at the highest CAGR during the forecast period. The growth of the segment is attributed to the capability of the software to create feedback, analyze data, and handle input/output sources, and the growing demand for training, simulation, developing virtual tools, AR and VR applications, game development, learning experience platforms, and segment reality.

In 2025, the AR devices Segment is Expected to Dominate the Global Augmented and Virtual Reality Market

Based on device, the global augmented and virtual reality market is segmented into augmented reality and virtual reality. In 2025, the AR devices segment accounted for the larger share of the global augmented and virtual reality market. The large market share of this segment is attributed to the increasing adoption of AR head-up displays (HUD) by the military, police, and firefighters to display tactical information such as maps or thermal imaging data while viewing a real scene and growing consumer demand, for gaming, advertising, and recreational activities.

Based on Application, the Gaming and Recreational Activities Segment is Projected to Register the Highest CAGR During the Forecast Period

Based on application, the global augmented and virtual reality market is segmented into gaming and recreational activities, designing, prototyping and manufacturing, travel and tourism, journalism, health and safety, advertising and retail, training, and other applications. The gaming and recreational activities segment is expected to grow at the highest CAGR during the forecast period. Over the years, technological advancements have played a significant role in the growth of the gaming industry. From powerful hardware to high-speed internet connections, the availability of tools enables gamers to immerse themselves in virtual worlds more seamlessly than ever before.

In 2025, the Augmented Reality Segment is Expected to Dominate the Global Augmented and Virtual Reality Market

Based on end-use industry, the global augmented and virtual reality market is segmented into augmented reality by end-use industry and virtual reality by end-use industry. In 2025, the augmented reality, by end-use industry segment, is expected to account for the largest share of the global augmented and virtual reality market. The large share of the segment is attributed to its ability to enhance user experiences, improve productivity, and provide innovative solutions. Such as immersive storytelling and interactive experiences in media and gaming, training simulations and maintenance tasks in aerospace and defense, assembly processes, and remote assistance in the manufacturing industry, among others, are gaining traction.

Asia-Pacific is Slated to Register the Highest CAGR During the Forecast Period

Based on geography, the global augmented and virtual reality market is segmented into North America, Europe, Asia-Pacific, Latin America, and the Middle East & Africa. The Asia-Pacific is expected to grow at the highest CAGR during the forecast period. The growth of this region is attributed to the existence of countries such as China, South Korea, India, and Japan, the major users, producers, and suppliers of AR software and VR-related hardware. In addition, the region is home to a large number of industries and factories that are using VR in various processes due to the trend of automation. Furthermore, the growing penetration of handheld devices with VR support and gaming and recreational activities with AR applications in Asia Pacific is expected to offer lucrative opportunities.

Augmented and Virtual Reality Market Research Summary

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