While AR and VR work to gain traction in gaming, their widespread adoption depends on expanding into practical, everyday uses beyond entertainment. Current headsets remain bulky, limiting appeal and the types of experiences they can offer. However, as AR/VR technology becomes more user-friendly, it could see breakthrough applications in education, training, healthcare, and design. Interest in AR and VR remains modest at best, with the most popularity among men aged 18-54. Challenges like motion sickness and confusion between AR and VR among older adults persist, but focusing on practical applications beyond gaming can help drive engagement by showcasing real-world practical value.
The market continues to evolve, with Meta’s Quest devices leading in sales and usage, although high financial losses suggest a need for sustainability. However, other companies like Valve and Apple face challenges with high-priced models. Inflation and economic dynamics influence consumer spending, which affects the AR/VR market as a whole.
This report looks at the following areas:
- Market context and economic influences on AR/VR
- Consumer insights into AR/VR usage and interest
- Meta’s performance and challenges in the AR/VR market
- Gender and age dynamics in AR/VR technology adoption
- Innovative marketing strategies for AR/VR technologies
AR and VR have found modest success in gaming, but their future growth depends on expanding into practical, everyday applications beyond entertainment.
Brian Benway, Senior Tech and Gaming Analyst
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EXECUTIVE SUMMARY
- What you need to know
- The AR/VR Market in 2025
- Market predictions
- AR and VR are still in need of a killer use case beyond gaming
- Younger audiences dominate ownership
- Gaming is important, but focus on current strengths limits growth
- Flakey feelings and buyer’s remorse detected among expensive device owners
- Opportunities
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MARKET DYNAMICS
- Market context
- Economic growth is expected to decline in Q1 2025
- Graph 1: quarterly real GDP growth, 2021-25
- Both annual and core inflation increased by more than expected in January
- Graph 2: headline CPI and core CPI, 2021-25
- Consumer sentiment declined by 10% from January – falling to its lowest level since late 2023.
- Graph 3: consumer sentiment index, 2022-25
- AR/VR market
- Meta is performing well but facing significant losses to maintain its position
- Meta’s Quest devices dominate VR usage among PC gamers
- Market drivers
- Meta’s affordable Quest devices soar while high-end model flops
- Sony and Apple may remix their struggling products together
- Niantic reportedly selling its AR gaming portfolio
- Tariffs, trade wars, armed conflicts, and rare earth minerals
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CONSUMER INSIGHTS
- Consumer fast facts
- AR/VR tech usage and interest
- Gaming is good but not for all, AR and VR are still in need of a killer use case
- Graph 4: AR/VR tech usage and interest, 2024
- Women aren’t absent from the AR/VR picture, but men lead usage
- Graph 5: AR/VR tech usage in the last 12 months, by gender, 2024
- AR/VR tech usage is driven primarily by younger demographics
- Graph 6: AR/VR tech usage in the last 12 months, by age, 2024
- Tech still has many scratching their heads or worse, feeling queasy
- Graph 7: the risk of feeling ill because of AR/VR makes the technology unappealing to me (% agree), by age and gender, 2024
- Graph 8: “I don’t really understand what the difference between AR and VR is” (% agree), by age and gender, 2024
- AR/VR tech isn’t an iPhone level tech revolution – price accordingly
- Graph 9: used any AR or VR device in the last 12 months, by household income and age, 2024
- For pricey electronics, a video demo just doesn’t wow like a hands on in-store experience can
- Graph 10: future interest in AR/VR tech among those who have not used in the last 12 months, 2024
- AR/VR technology needs to be grounded in use cases people already enjoy
- Graph 11: future interest in AR/VR tech among those who have not used in the last 12 months, by gender, 2024
- AR/VR device ownership
- It still feels like it’s taking off, but a surprising number of consumers own devices
- Graph 12: AR/VR device ownership, 2024
- AR/VR owners are likely to own multiple devices
- Graph 13: AR/VR device ownership, by ownership of each device, 2024
- AR is a more accessible technology unbound by headset constraints
- Graph 14: used any AR or VR device, by device ownership, 2024
- Increasing women’s interest will require more than movies and games
- Graph 15: AR/VR device ownership, by gender, 2024
- Younger audiences present the clearest path to success
- Graph 16: AR/VR device ownership, by age, 2024
- Meta is spending big to build a VR ecosystem, and it looks like it’s working
- Graph 17: AR/VR device ownership, by age (18-54) and household income, 2024
- Consumers are right to consider VR a fad until Meta Reality Labs turns a profit
- Graph 18: attitudes towards AR/VR (% agree), by age and gender, 2024
- Flakey feelings and buyer’s remorse detected among expensive device owners
- Graph 19: “VR headsets are a fad” (% agree), by device ownership, 2024
- AR/VR usage frequency
- Among AR/VR owners the technology is still a nice to have not a must have
- Graph 20: AR/VR usage frequency, 2024
- Owners of expensive headsets are more personally invested in the potential of the tech but perhaps disappointed by its execution
- Graph 21: at least once a week, by device ownership, 2024
- Encouraging women usage may require thinking beyond the device
- Graph 22: AR usage frequency, by gender, 2024
- Graph 23: VR usage frequency, by gender, 2024
- Meta is on the right track, AR needs to combine style and substance to succeed
- Graph 24: attitudes towards AR/VR (% agree), by gender, 2024
- AR & VR preferred use cases
- VR needs to branch out beyond watching videos and gaming to find it’s place
- Graph 25: current use/would be interested in using a VR headset for, 2024
- VR gaming reigns supreme among current users, but there’s a catch
- Graph 26: current use/would be interested in using a VR headset for, VR users in the last 12 months vs overall, 2024
- Gaming is important, but users focus on current strengths, limiting growth
- Graph 27: current use/would be interested in using a VR headset for, by age, 2024
- Premium live content may be another untapped well of potential
- Graph 28: current use/would be interested in using a VR headset for (select), by gender, 2024
- Graph 29: current use/would be interested in using a VR headset for (select), by VR users in the last 12 months and gender, 2024
- Current apps are only beginning to scratch the surface of AR possibilities
- Graph 30: current use/would be interested in using AR technology for, 2024
- AR tech could bridge the gap between in-store and online shopping experiences
- Graph 31: current use/would be interested in using AR technology for, by AR users in the last 12 months vs overall, 2024
- Older adults have more interest in adopting AR use cases than VR
- Graph 32: current use/would be interested in using AR technology for, by age, 2024
- The gender gap is smaller among AR uses, but some standout
- Graph 33: current use/would be interested in using AR technology for, by gender, 2024
- Graph 34: current use/would be interested in using AR technology for, by AR users in the last 12 months and gender, 2024
- Younger adults hope AR tech can broadly enhance everyday life experiences
- Graph 35: attitudes towards AR/VR (% agree), by age, 2024
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INNOVATION AND MARKETING STRATEGIES
- Launch activity and innovation
- Move over smell-o-vision, introducing VR lollipops
- Google is back in the AR glasses game; will it outlive Google Glass?
- Virtual AR try on mirrors in stores and displays
- The amazing future of health care powered by AR. Thanks, I hate it
- Meta teaming up with Oakley for Athleisure AR
- Marketing and advertising
- VR may be a game changer for the venerable Civilization series
- Augmented reality car customization on TikTok
- Jane Fonda and Meta Quest take to TikTok and YouTube to promote VR fitness
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APPENDIX
- Consumer research questions
- Consumer research methodology
- Generations
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