AR & VR - Saudi Arabia

Saudi Arabia

The AR & VR market in Saudi Arabia is projected to generate a revenue of US$103.5m in 2024.
It is expected to grow at an annual rate of 11.05% (CAGR 2024-2028), resulting in a market volume of US$157.4m by 2028.
The largest segment in this market is AR Software, which is estimated to have a market volume of US$31.6m in 2024.
The United States is the leading revenue generator in the AR & VR market, with a projected market volume of US$10,260.0m in 2024.
By 2028, the number of users in Saudi Arabia is expected to reach 21.9m users.
The user penetration rate is predicted to be 55.4% in 2024 and is projected to increase to 55.5% by 2028.
The average revenue per user (ARPU) is estimated to be US$2.8 .
It's important to note that the revenue values mentioned in this context only account for B2C revenues.
This means that the displayed market share of B2C covers 0.00 of the total market (B2C & B2B).
Saudi Arabia is experiencing a surge in the adoption of AR & VR technologies, with companies leveraging them for immersive training, entertainment, and tourism experiences.

Definition:

Augmented reality (AR) and virtual reality (VR) make it possible to combine the real and virtual worlds. AR is generally accessed via mobile phones and primarily relies on lenses. AR effects can be created by using lenses in social media apps, for example. AR is also used for displaying digital 3D objects in our surroundings, e.g., in gaming or eCommerce apps. Meanwhile, VR technology allows users to dive into the virtual world, and, unlike AR technology, it requires a headset device which enables the creation of virtual worlds.

Structure:

The AR & VR market consists of six different markets: AR Advertising, AR Hardware, AR Software, VR Advertising, VR Hardware, and VR Software. AR Advertising covers mobile advertising that is displayed in the most prominent social media apps. AR Hardware comprises AR headsets and glasses. AR Software is divided into three different application types, namely social media, gaming, and eCommerce applications, which can be accessed via the most prominent app stores. VR Advertising covers in-game advertising as well as advertising in VR videos. VR Hardware comprises both tethered head-mounted displays (HMDs) and stand-alone HMD headsets. Lastly, VR Software covers VR games and VR videos, which require headsets.

Additional information:

The market comprises revenues, users, average revenue per user, and penetration rates. Revenues are generated through in-app purchases, advertising spending, and consumer spending on apps, games, and hardware such as headsets or glasses. Sales channel data shows both online and offline revenues, which include VAT. The market only displays B2C revenues and users for the above-mentioned markets and markets; B2B and B2G revenues are not included. Additional definitions for each market can be found on the respective market pages.
Market numbers for VR headsets are also featured in the Consumer Market Insights, namely in the Gaming Equipment market of the Consumer Electronics market. Unlike the VR Hardware market in the Advertising & Media Outlook, the Gaming Equipment market also covers smartphone VR devices.
Key players in the market include companies such as Meta (Oculus VR), Microsoft (HoloLens), Snap Inc. with different lenses, and Nvidia, which offers computing hardware components.
For more information on the data displayed, use the info button right next to the boxes.

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Analyst Opinion

The AR & VR market in Saudi Arabia is experiencing significant growth and development, driven by customer preferences, market trends, local special circumstances, and underlying macroeconomic factors. Customer preferences in Saudi Arabia are playing a crucial role in the development of the AR & VR market.

Saudi consumers are increasingly seeking immersive and interactive experiences, and AR & VR technologies provide exactly that. The younger generation, in particular, is highly interested in these technologies and is willing to invest in AR & VR devices and content. Additionally, the growing popularity of gaming and entertainment in Saudi Arabia is driving the demand for AR & VR experiences.

Trends in the market further contribute to the development of the AR & VR industry in Saudi Arabia. The increasing availability of affordable AR & VR devices, such as headsets and smartphones, has made these technologies more accessible to the general public. This has led to a rise in the adoption of AR & VR applications across various sectors, including education, healthcare, retail, and real estate.

Furthermore, the government's push for digital transformation and innovation is creating a favorable environment for AR & VR companies to thrive. Local special circumstances also play a significant role in the growth of the AR & VR market in Saudi Arabia. The country has a young and tech-savvy population, which is eager to embrace new technologies.

Moreover, Saudi Arabia has a strong entrepreneurial ecosystem, with numerous startups and tech companies focusing on AR & VR solutions. This vibrant startup culture fosters innovation and drives the development of the AR & VR market. Underlying macroeconomic factors contribute to the growth of the AR & VR industry in Saudi Arabia.

The country's Vision 2030 initiative, which aims to diversify the economy and reduce dependence on oil, has identified the technology sector as a key driver of economic growth. As a result, the government has been actively supporting the development of the AR & VR industry through various initiatives and investments. Additionally, the increasing internet penetration and smartphone adoption rates in Saudi Arabia provide a solid foundation for the expansion of AR & VR applications.

In conclusion, the AR & VR market in Saudi Arabia is experiencing rapid growth and development due to customer preferences, market trends, local special circumstances, and underlying macroeconomic factors. The increasing demand for immersive experiences, the availability of affordable devices, the government's support, and the country's young and tech-savvy population are all contributing to the flourishing AR & VR industry in Saudi Arabia.

Methodology

Data coverage:

The data encompasses B2C enterprises. Figures are based on the AR & VR market. AR and VR enable consumers to experience a new dimension, using either a headset or installed units, as they combine the real and virtual worlds. Consumer revenue figures refer to revenues relating to AR hardware, AR software, VR hardware, VR software, and spending on AR and VR advertising. Both digital and non-digital revenues are included.

Modeling approach / Market size:

Market sizes are determined through a top-down approach, building on specific predefined factors for each market market. As a basis for evaluating markets, we use annual financial reports of the market-leading companies and industry associations, as well as third-party studies and reports. In addition, we use relevant key market indicators and data from country-specific associations, such as consumer spending, internet penetration, 4G coverage, and historical developments. This data helps us estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the relevant market. For example, the S-curve function and exponential trend smoothing are well suited for forecasting digital products and services due to the non-linear growth of technology adoption. The main drivers are level of digitalization, adoption of technology, GDP per capita, and internet penetration.

Additional notes:

The market is updated twice a year in case market dynamics change. The data is modeled using current exchange rates. The impact of the COVID-19 pandemic and the Russia-Ukraine war are considered at a country-specific level. In some cases, the data is updated on an ad hoc basis (e.g., when new, relevant data has been released or significant changes within the market have an impact on the projected development).