Immersive tech is no longer a curiosity. It’s becoming a core pillar of the games industry.
Across virtual reality (VR), augmented reality (AR), mixed reality (MR) and 360° film, both consumers and companies are accelerating adoption. Advances in hardware, smarter developer tools and AI-driven personalization are lowering barriers and expanding what’s possible. Analysts put the market at roughly USD 13–17 billion in the mid‑2020s and project a steep climb to around USD 175 billion by 2035—a trajectory that signals rapid growth even if individual estimates vary.
Why it matters
Immersive formats change how games are built, sold and experienced. They reshape production pipelines, alter monetization models and shift player expectations. Studios, platforms and advertisers who adapt their workflows, metrics and product roadmaps will be better positioned to win.
What’s driving the shift
Three forces are converging right now:
- – Better hardware: Head‑mounted displays (HMDs) and gesture-tracking devices are more comfortable, higher resolution and more affordable. That extends play sessions and broadens the audience for longer-form content.
- Improved software and tools: Modern engines, cross‑platform runtimes, standardized SDKs and cloud rendering remove many technical hurdles. Developers iterate faster and can target multiple device classes without rebuilding from scratch.
- Smarter AI: Procedural generation, adaptive narratives and personalized matchmaking let content scale and stay relevant to individual players, increasing retention and lifetime value.
Hardware, tooling and AI together do more than add features—they change priorities. Teams need different skills, budgets and timelines than they did for traditional console or mobile launches.
Market segments and where to place bets
Not all immersive projects follow the same path. Think in terms of fit between content, tech and monetization:
- – Competitive multiplayer and social hubs: These benefit from network effects and high engagement. They demand robust backend systems, moderation tools and low‑latency networking.
- Single‑player, story‑driven titles: AI-assisted content creation helps studios deliver rich narratives without ballooning asset costs.
- Location‑based entertainment: High‑fidelity installations sell premium experiences and rely on bespoke hardware and operations.
Study your strengths and pick the segment that matches your technical capabilities and revenue model.
Business models evolving
Revenue is diversifying beyond one‑time sales. Subscriptions, episodic releases, live services, microtransactions and enterprise contracts all coexist. Platform holders increasingly control discoverability and billing, so studios must balance the benefits of recurring revenue with the risks of platform dependence.
Cross‑industry use cases
Immersive tech is already practical outside entertainment. Training programs for emergency services, medical procedures and industrial simulation reduce real‑world risk and training time. Sales and product demos use MR to accelerate decision cycles. For developers targeting enterprise customers, interoperable formats, analytics and security are essential—and they can open steady revenue streams through subscriptions and licenses.
Social features and esports
Social VR, persistent virtual spaces and spectator-friendly overlays are expanding how audiences experience games. Monetization flows from virtual merchandise, branded events and paywalled experiences. The challenge is technical and social: scale social tools while keeping moderation, latency and fairness intact.
Regional picture
Adoption patterns differ by market:
- – North America (~45%): Large consumer spending, mature studios and deep investment make this the industry’s center of gravity.
- Europe (~30%): Strong pockets of development in the UK, Germany and France, often supported by public funding and cross-border talent.
- Asia‑Pacific (~20%): Mobile-first approaches, fast user acquisition and local content make this region a hotbed for social and lightweight AR experiences.
- Middle East & Africa (~5%): Early but growing markets, benefiting from improving connectivity and payment infrastructure.
Strategy should reflect local payment systems, content tastes and device penetration rather than assuming one global playbook.
Across virtual reality (VR), augmented reality (AR), mixed reality (MR) and 360° film, both consumers and companies are accelerating adoption. Advances in hardware, smarter developer tools and AI-driven personalization are lowering barriers and expanding what’s possible. Analysts put the market at roughly USD 13–17 billion in the mid‑2020s and project a steep climb to around USD 175 billion by 2035—a trajectory that signals rapid growth even if individual estimates vary.0
Across virtual reality (VR), augmented reality (AR), mixed reality (MR) and 360° film, both consumers and companies are accelerating adoption. Advances in hardware, smarter developer tools and AI-driven personalization are lowering barriers and expanding what’s possible. Analysts put the market at roughly USD 13–17 billion in the mid‑2020s and project a steep climb to around USD 175 billion by 2035—a trajectory that signals rapid growth even if individual estimates vary.1
Across virtual reality (VR), augmented reality (AR), mixed reality (MR) and 360° film, both consumers and companies are accelerating adoption. Advances in hardware, smarter developer tools and AI-driven personalization are lowering barriers and expanding what’s possible. Analysts put the market at roughly USD 13–17 billion in the mid‑2020s and project a steep climb to around USD 175 billion by 2035—a trajectory that signals rapid growth even if individual estimates vary.2