The Evolution of Gaming with AR and VR

Em Blog Vr Ar Main Image

With the recent launch of the Apple Vision Pro (and the corresponding viral videos of people wearing the headsets in public and while driving), Augmented Reality (AR) and Virtual Reality (VR) have entered the mainstream technology conversation once again. One industry in which AR and VR are potentially poised to make a monumental impact is gaming, where VR alone is projected to have a market size of over $109 billion by 2030.1 The growing appetite for immersive gaming will likely transform player experiences and engagement and reshape the development, revenue streams, business models, and target audience for video games.

Shifting Development and Design

The incorporation of AR and VR technologies is pushing the boundaries of game development and design, enabling industry titans and niche studios to build more immersive, interactive, and engaging experiences. This fundamental shift in the fabric of game creation requires a significant investment in new platforms, skills, techniques, and development cycles to create the higher-resolution displays, large field-of-view graphics, and surround audio to enable players to truly feel inside their games. As the demand for AR and VR content grows and more devices come online (8.1 million AR/VR headsets were projected to ship in 20232), studios will have to pivot their priorities and talent if they hope to profit from this emerging ecosystem.

Shifting Revenue Streams and Business Models

To capitalize on the continued prevalence of AR and VR in gaming, studios will seek to adopt new revenue streams and business models. Beyond game sales, companies are exploring subscriptions for continuous content delivery, in-game purchases, and even virtual real estate in VR environments. These models can produce recurring revenue and foster ongoing engagement and playability within games. Furthermore, AR and VR create opportunities for dynamic brand partnerships and innovative and interactive advertisement placements that merge seamlessly with gameplay, opening up new revenue channels that were previously untapped. Capturing these revenue streams will be crucial to offset the high costs of developing AR and VR games and producing the requisite hardware.

Expanding Markets and Audiences

AR and VR technologies are expanding the gaming market by reaching audiences beyond traditional gamers. Mobile AR games can engage a wide range of demographics by incorporating gaming into the real world for immersive and community-based experiences. Similarly, VR offers unique experiences that appeal to both seasoned gamers and those looking for new and novel types of entertainment, broadening the industry’s target market. This expansion can boost revenue while encouraging creative and more diversified development to cater to varied interests, preferences, and cultures.

The continued transition towards AR and VR in gaming is transforming not only how games are developed and experienced but also how they’re monetized and marketed. As the technology matures and becomes more accessible, studios that can navigate these changes and adapt to new consumer expectations and technological advancements will likely reap immense profits and become positioned as leaders in the AR and VR gaming landscape.

  1. Grand View Research, Virtual Reality In Gaming Market To Reach $109.59 Billion By 2030, December 2023.
  2. IDC, AR & VR Headsets Market Insights, January 2023.