For Digital Fun, Gaming and AR Lead Tech Markets
August 1, 2023
- Author: CTA Staff
Despite inflation concerns and interest rate increases, the U.S. economy has largely maintained momentum since the start of the year. Consumers are still spending. According to the U.S. Department of Commerce, retail sales have been pacing above 2022 levels every month in the first half of this year. Powerful bright spots in a mixed economic picture are the gaming and augmented reality (AR) tech sectors.
Gaming software, hardware and accessories remain a focal point for consumer dollars, with gaming continuing to dominate as a central form of digital entertainment. Augmented and virtual reality headsets, essential for immersive gaming experiences, also remain sought-after purchasing priorities among consumers. They’re expected to hit 2024 wholesale revenues in the very good neighborhood of $1.1 billion. CTA reporting provides insights into market drivers for these categories.
CTA research examines how these segments are faring. Detailed performance findings and forecasts are detailed in two CTA reports: 2023 U.S. Consumer Technology Software & Services Forecast and CTA U.S. Consumer Technology One-Year Industry Forecast, 2019-2024. Here’s a snapshot of findings.
Gaming, A Steady Market Performer
Even with a gaming-software contraction in 2022 over 2021 highs, CTA finds that gamers’ engagement is strong, driven largely by subscriptions. Revenues remain close to 2020’s level of boosted spending above$47 billion this year. Moreover, the current level of video game spending is expected to be long-lasting, with sustained revenues approaching $50 billion through 2026.
Gaming subscriptions, which allow gamers to play online with others, is propelling the sector. A strong plus with gaming subscriptions is access to cloud-based game streaming. CTA projects that these revenues will rise 10% in 2023.
Software and all services beyond gaming are countering declines of 3.3% in the overall hardware segment. Gaming hardware, however, has been an exception. CTA forecasts that wholesale revenues for gaming equipment will reach $7 billion in 2024.
Augmented and Virtual Reality, A Multi-Billion-Dollar Market
Headsets are hot now, with AR/VR (collectively, XR) devices expected to hit a 2023 wholesale revenue of $1.1 billion. XR headsets are expected to reach revenues of $1.6 billion in 2024.
An emerging U.S. trend in tech, virtual reality and augmented reality manufacturers continue to raise the bar on device capabilities. They’re improving screen resolution and comfort levels with each release.
Apple’s June announcement of a spatial computer in an AR-headset format introduces immersive 3D interaction. Apple, a CTA member, made a splash across the AR and VR landscape with this innovation, the Vision Pro extended reality headset. Despite a premium price tag, CTA expects this headset will push the virtual, augmented, mixed or extended reality market to new levels.
Exclusive performance and forecasting insights are available from CTA on topics ranging from IoT security and artificial intelligence to smart home, digital health and more. Visit the Research topic page for the full list, and for more information. The latest in gaming and AR was also on display at CES 2024.
