Head Mounted Display Market Size, Trends and Growth Analysis by 2027

The global market for head-mounted displays (HMDs) is projected to expand significantly, increasing from approximately US$ 7,840.66 million in 2021 to around US$ 55,333.07 million by 2028. This growth represents a remarkable compound annual growth rate (CAGR) of 32.2% over the period from 2021 to 2028.

Military operations are evolving in complexity and scope, with various objectives fueling research and development in this area for decades. A significant driver for the advancement of augmented reality (AR) systems has been the specific needs and capabilities of military applications. For example, in 2021, the Indian Ministry of Defence (MoD) announced plans to acquire 556 augmented reality head-mounted display (ARHMD) systems for its army. Unlike typical media displays, military HMDs primarily focus on providing critical information and tracking data, functioning as an integral part of a vehicle's heads-up display. The use of AR and VR headsets allows for extensive simulations, which can significantly lower training costs, thereby promoting their adoption within military settings. Consequently, the growth of the global head-mounted display market is largely attributed to the increasing utilization of HMDs in defense and military operations.

In 2019, the U.S. Army took a significant step towards enhancing soldier capabilities by collaborating with Microsoft engineers at a military base in North Carolina, where they signed a contract for the provision of AR/VR headsets. Such initiatives and advancements in AR/VR technology within military sectors are expected to further propel the growth of the head-mounted display market in the foreseeable future.

The Asia Pacific region stands out as a key player in the adoption of head-mounted displays. Factors such as rapid technological advancements, economic digitization, and an increase in disposable income among the middle class are transitioning economies from growth to developed status, thereby fostering the growth of micro, small, and medium enterprises (MSMEs). The region's expanding market share can be attributed to a large customer base, a rising number of smartphone users, and a surge in startups focused on AR and VR technologies. One of the most prominent applications of virtual and augmented reality is in the gaming sector, where Asia-Pacific has taken the lead in the VR/AR revolution. Companies like Sony, Nintendo, and Sega are producing innovative products that introduce AR/VR experiences to a broader audience globally.

The COVID-19 pandemic has further fueled the demand for VR and AR technologies in the gaming industry, alongside the growing interest from major technology firms, which is driving the virtual reality market forward. Numerous product innovations are being launched by companies worldwide, contributing to the expansion of the head-mounted display market. For instance, in May 2020, HP Development Company, LP unveiled its new virtual reality headset, the HP Reverb G2. This product, developed in collaboration with Microsoft and Valve, features spatial 3D audio, inside-out tracking, advanced optics, and seamless plug-and-play compatibility with Windows, thereby enhancing the company's product offerings.

Key players in the head-mounted display market include Microsoft, Sony, Oculus VR, Lenovo, Magic Leap Inc., BAE Systems, Seiko Epson Corporation, Samsung Electronics, Google LLC, HTC Corporation, and Vuzix. The report also includes secondary research on other companies that hold a significant share of the market.

The overall size of the head-mounted display market has been determined through a combination of primary and secondary research methodologies. The research process commenced with extensive secondary research, utilizing both internal and external sources to gather qualitative and quantitative data relevant to the market. This approach also aimed to provide a comprehensive overview and forecast of the head-mounted display market across various segments and regions. Additionally, multiple primary interviews were conducted with industry stakeholders and experts to validate the findings and gain deeper analytical insights. Participants in this process included industry professionals such as vice presidents, business development managers, market intelligence managers, and national sales managers, as well as external consultants like valuation experts, research analysts, and key opinion leaders specializing in the head-mounted display market.