Augmented RealityIndustry ReportsVirtual Reality

XRDC Releases Annual Report on the State of AR/VR Innovation Ahead of the Conference

The AR/VR innovation report shows a growing interest in gaming and the Oculus platform, together with key challenges for developers.


The state of AR/VR innovation looks promising, but the industry still has to overcome some hurdles. At least, these are the major findings published by Informa Tech in their annual report. This report comes two months ahead of the company’s XRDC conference, which will take place in San Francisco on October 14-15.

The State of AR/VR Innovation: Going Strong, but Still Facing Challenges

The detailed report prepared by Informa Tech is based on answers from over 900 professionals who develop AR/VR/XR experiences. The participants shared their views and factual data on several key industry issues:

  • The fields in which they develop projects;
  • The most frequently used projects;
  • Sources of funding;
  • Profitability of their work;
  • Top challenges they are facing.

Thus, their answers indicate that the AR/VR market is growing, but it still faces challenges. These challenges are especially hard to overcome by startups that try to contribute to AR/VR innovation.

Let’s take a look at the most important  findings of the XRDC AR/VR Innovation Report:

1. Gaming Remains the Top Field for AR/VR Projects

When it comes to the type of immersive projects, 59% of respondents indicated games. This is not surprising, given the appetite of the consumers for interactive and immersive games. Also, SDKs like ARKit and ARCore facilitate the development of games for mobile phones – the most widespread device for entertainment.

So, the top five fields for AR/VR projects looks like this:

  • gaming – 59%
  • entertainment (non-gaming) – 38%
  • education – 33%
  • training – 27%
  • enterprise – 22%.

This is perfectly aligned with the general adoption rates of AR/VR innovation and technology across various industries.

2. HTC VIVE Loses Its Number One Place as Development Platform

After three years of dominance in the top for platforms preferred by developers, HTC VIVE hands the crown to Oculus in 2019. The Facebook-owned VR platform holds the first two places, with Rift (29%) and the recently released Quest headset (24%).

Perhaps the most surprising thing in the top-platforms list is Oculus Quest taking second place.  As you may know, Oculus launched this headset model only a few months ago. However, it already promises to become a favorite both for developers and consumers. Some of the reasons for this preference may be the wireless controllers with 6DoF and the affordable price, starting atUS$399.

See Also:  4 Solutions for Implementing 6DoF Tracking on Lightweight AR Glasses

The top 5 favorite platforms also includeHTC VIVE (24%), Android ARCore (23%), as well as iOS ARKit (19%).

3. Clients Start Financing an Increasing Number of Projects

One of the key questions for any AR/VR innovation project is, of course: who will pay for it? The number one funder still remains the developing company. However, there is a growing interest for clients to pay for immersive projects. According to the respondents, the top three sources of money for their work are company funds (41%), clients (27%), and personal funds (23%).

Other sources of financing are grants, angel investors and government funds.

AR vs VR? 76% believe AR/MR will eventually win the race for market share.

4. Profitability of AR/VR Projects

In terms of return on investments, most of the respondents (27%) believe it will happen in the medium term or long term (23%). Only 11% of them are running projects that already generate profit.

However, it is worth noting that 22% of respondents said that their projects are not for profit.

5. Key Challenges Faced by AR/VR Developers

Next, the developers shared the most important hurdles they have to face in the immersive technology industry. These challenges belong to three main categories:

  • Funding-related

The respondents believe that small and medium-sized companies have a hard time accessing funds to develop their AR/VR innovation projects. As one of the respondents stated: “Funding is plentiful, but most of the money gets swallowed up by the largest corporations.”

  • Market-related

The market is still small, but the technology evolves at a very fast pace. Thus, developers struggle to keep up with the latest trends and to find clients at the same time.

  • Technology-related

The hardware for AR/VR experiences is still expensive and has technical limitations. Some of the limitations enumerated by respondents are battery life, comfort, and complexity of use.

The Overall Feeling Remains Enthusiastic

Despite the challenges they may be facing, AR/VR developers are excited about the developments and innovations in the industry. One respondent summed up the general feeling with the statement:

“The technology is in a place where developers are able to push the envelope pretty consistently, so I think we are going to see some really great advancement.”

As for the future of immersive technology, 76% of respondents believe AR/MR will gain the greatest market share, while only 24% believe VR will be the winner.

See Also:  XRDC Interviews AR and VR Industry Experts in Healthcare Report

Do you plan on attending the XRDC 2019 conference? If you don’t have your ticket yet, the early registration is open until August 19. Use the code XR19ARP10 to get an extra10% off.

the authorARPost