Global Augmented and Virtual Reality in Healthcare Market By Component (Hardware, Software, Services), By Technology (Augmented Reality, Virtual Reality), By Application (Augmented reality, Virtual reality), By Region and Companies - Industry Segment Outlook, Market Assessment, Competition Scenario, Trends and Forecast 2024-2033

Report Overview

The Global Augmented and Virtual Reality in Healthcare Market size is expected to be worth around USD 19.1 Billion by 2033, from USD 3.3 Billion in 2023, growing at a CAGR of 19.1% during the forecast period from 2024 to 2033.

The digital technologies enabling automation which can be utilized in industries where repeated operations must be completed and often refined is popularly known as augmented reality(AR) and virtual reality(VR). A prominent application of AR and VR in medical industry includes healthcare education and training, particularly in surgery. Such technology allows healthcare sectors to ingeminate simple activities in a simulated ecosystem without continuous monitoring need by medical personnel, thereby minimizing the expenses of training centers and medical personnel.

Further, the need for hospitalization is avoided as head-mounted devices could be safely installed in patients’ residences, especially in case of immobile patients. The utilization of AR and VR assists rehab physicians to conduct tele-rehabilitation remotely, where patient can carry workout at home and the patient related data is subsequently transferred to the healthcare professionals.

During the emergence of COVID 19 pandemic the demand for AR and VR up scaled, allowing patients and medical providers to handle treatment schedules, planning, and medication delivery more safety and appropriately. The use of such innovations in clinical education massively reduces the chances of surgical errors, leading to a significant amelioration in patient safety.

The usage of augmented reality includes assistance towards the surgeons and direct robots during the surgery. On the other hand, VR display its applications in amblyopia therapy, rehab training, and management of some mental illnesses.

• According to CrunchBase and AngelList’s extensive data enquiry, there are aprroximately 30-31 startups focusing on AR medical applications across the globe, from which 9 of them received funding of $552 million, evaluating total 30% investment attractiveness rate.

Key Takeaways

• Based on component, hardware segment scaled the global augmented and virtual reality in healthcare market capturing a valuable market share of 56.4% in the year 2023.
• By technology, augmented reality withheld a commendable market share of 65.3% owing to its diverse benefits in healthcare sector.
• Based on applications, augmented reality application segment dominated the market global owing to its enhanced efficiency in healthcare systems.
• Digitalization in healthcare sectors advances with the advancements in AR and VR technologies, resulting into market growth.
• Limited medical personnel may limit the market expansion.
• North America dominates the market capturing a measurable market share of 51.9% in the year 2023.

Component Analysis

Hardware segment dominates the market

Based on component, the market is broadly categorized into hardware, software and services segment, with hardware segment occupying an exceptional market share of 56.4%, dominating the augmented and virtual reality in healthcare market in the year 2023.

The segmental dominance is by virtue of the revenue it generates coupled with its growing demand for smart glasses, displays that are head mounted and the 3D sensors during the forecast period. Globally the use of hardware of augmented reality and virtual reality has hiked to a greater extent in various nations because of commercialization of product. Smart glasses and head mounted display has widespread applications in diagnostics and surgeries.

On the other hand, a next significant market portion is withheld by software segment owing to the continuous research and development efforts incorporating advancement in software technologies. One of the significant recent application include use of software technology for detection of eye defects. Some of the other applications of apps such as Applied VR assists in reduction of patient’s anxiety during surgeries.

• In March 2021, Los-Angeles based Applied VR raised the USD 29.5 million and developed digital therapy based on VR technology to reduce pain. In the trials, it witnessed a reduction in intense pain by 43%.

Technology Analysis

Demand for augmented reality hikes with the incorporated advances

Based on technology, the market is fragmented into augmented reality and virtual reality segments, with augmented reality segment coming up as a frontrunner in the global augmented and virtual reality market. The segment underscores its success by providing widespread applications in healthcare including creation of 3D view of objects and the environment around us with wearables such as head-mounted display devices and smart glasses.

An ultimatum for augmented reality escalates with the advancements in technology, public and private investment hike, acceleration of mergers and acquisitions, growing demand for effective treatment, and reduction is prices of head-mounted devices across the globe. Thus, these factors enable the segment to attain a commendable market share of 65.3% in the year 2023.

• In January 2021, Hologic Inc acquired Biotheranostics, a molecular diagnostics company for the USD 230 million, allowing both the companies to combine the capabilities and utilize their expertise in oncology diagnostics and advanced women health diagnostics.
• In August 2020, augmented reality solutions for pharmaceutical and healthcare industries were released by FusionVR to revolutionize healthcare manufacturing.

On the flip side, remaining significant market portion is withheld by virtual reality segment, enabling the users to interact with three-dimensional environment combined with provision of huge opportunities in rehabilitation and pain management. Diverse phobias including fear of height, claustrophobia, posttraumatic stress disorders are effectively treated by virtual reality exposure therapy. The segmental growth further leads to market success with increasing neurological disorder cases coupled with rising ultimatum for emerging diagnostic methods.

Application Analysis

Widespread applications in healthcare makes augmented reality segment dominant

Based on applications, the market is bifurcated into augmented reality application and virtual reality application segments. Being used in diverse fields of healthcare, augmented reality assists in performing intricate surgeries and even the minimally invasive type of surgeries.

There is a growing demand for augmented reality in healthcare settings because of the incorporated advancements and rising necessity for medical surgery simplifications. With the aim to provide innovative products and scale the consumer base, many domestic players and market players in augmented reality technology have entered into partnerships. Thus, a dominating role is played by augmented reality segment, providing enhanced efficiency in healthcare systems, thus accounting a market share of 74.2% in the global augmented and virtual reality in healthcare market in the year 2023.

• SentiAR makes software that allow doctors to examine a 3D representation pf patients’ heart while operating on it.

Key market segments

By Component

• Hardware
• Software
• Services

By Technology

• Augmented reality
• Virtual Reality

By Applications

• Augmented reality application
• Virtual reality application

Market Drivers

Benefits of virtual reality technologies

Virtual reality is highly incorporated in healthcare sectors to ameliorate patient’s treatment capacity, allowing the healthcare providers to detect, diagnose, train, and treat health issues easily. Patient phobias are also treatment aided by virtual reality such as fear of height, claustrophobia, darkness and other phobias. To exemplify, virtual reality is helping the patient to overcome claustrophobia during MRI scans.

Besides this, other vital application of virtual reality includes, Vivid Vision, a vision care provider in San Francisco treats medical conditions, including lazy eye supported by virtual reality, offering remote treatment for crossed eyes, weak eyes and convergence disorder.

• In September 2022, OssoVR raised the USD 14 million led by Kaiser Permanante. The company plans to utilize the funds for developing VR-based surgical and medical device training modules.

Digitalization scaled the market revenue

An instrumental role is played by digitalization due to constant research and development activities proving advancements in technology. This aids the market to grow in the upcoming years. In addition, government of various nations have taken initiatives which are favorable in introducing innovative ideas helping and benefitting healthcare sectors to a greater extent.

Market Restraints

Death of skilled personnel

The growth of the market is likely to hamper because of death in skilled professionals. Augmented and virtual reality being a highly advanced technology used in healthcare require medical personnel who are highly quality and able to work with these applications without any errors. Since many years the industry has worked on paper-based system for longer period of time, so the adoption of electronic medical records require advanced technical knowledge, which is likely to impede the market growth.

Disadvantages of virtual reality technology

Virtual reality headsets and other related hardware might challenge the technological limitations in the healthcare industry. Some of these tools associates disadvantages including their large size, lumpiness, and high implementation costs which slow down the process while using these tools. Thus, these factor may cause impediment towards market growth, but still efforts are being made to overcome these factors allowing massive market growth.

Opportunities

Market players operating in augmented and virtual reality in healthcare market gains immense opportunities resulting into higher revenue generation. This is by virtue of virtual reality proving visuals of various surgeries performed by surgeons. In addition, the approval of hardware and software technologies by the regulatory authorities is further excelling the market expansion.

The demand for augmented and virtual reality has grown in operating rooms being more beneficial to the surgeons. For instance, augmented and virtual reality assists the surgeons to diagnose any disease and perform invasive type of surgeries. Furthermore, the collaboration among major market players and healthcare sectors further offers lucrative opportunities for the market growth.

• Augmedics received US. FDA approval for Xvision Spine AR Guidance System in December 2019, which allow the surgeons to view the 3D spinal anatomy of patient during the spine surgery.
• A collaboration was held between Philips Healthcare and Azurion & Microsoft to develop a mixed reality concept to provide a 3D holographic AR environment derived from multiple image modalities to assist the surgeons.

Impact of macroeconomic factors

Inflation is one of the biggest factor influencing the demand for augmented and virtual reality in healthcare. The cost of AR and VR hardware is impacted resulting into higher cost of the products, leading to market hampering. The cost of research and development in AR and VR technologies is also affected due to inflationary pressures, slowing down the innovations in the field.

With the rise in expense of medical equipment, technology and personnel there rises overall healthcare spending, impacting the willingness of healthcare organizations to invest in AR and VR solutions. When cost of product gets hiked, it further passes onto consumer base, affecting the patients’ accessibility to AR and VR healthcare services, restricting them to utilize such high cost technologies, thus hampering the market growth.

Latest Trends

Wound Care Management

Augmented reality allow non-invasive assessment of wound parameters by providing visual feedback on wound healing status. An accurate 3D model of wound integrates AR functionalities based on a miniaturized projector to demonstrate wound progression, allowing the doctors to suggest right follow up therapies and exercises.

Seamless Hospital Navigation

Due to multiple floors and building as well as signage in large hospital facilities there forms complexities for patients in indoor and outdoor wayfinding. The innovation of calibrated smartphone cameras and recent advances in computer graphics algorithms help simplify compleAR services in a larger environment, such as multistoreyed building.

Regional Analysis

North America Holds Significant Share of the Global Augmented & Virtual Reality in Healthcare Market

North America leads the global augmented and virtual reality in healthcare market capturing a prominent market share of 51.98% in the year 2023. The prominence owes to the regions’ higher technology adoption, investments in research and development activities and favorable government initiatives. In addition, due to escalated pressure on healthcare providers and payers to reduce treatment cost, there is rise in outsourcing healthcare IT services in North America. Thus, these factors optimistically impact the growth of the market for augmented and virtual reality in healthcare in the region.

• The National Institute of Health of the U.S. government is offering funds for research in virtual reality with its application in healthcare.

Asia-Pacific, on the other hand is anticipated to register fastest CAGR during the forecast period. Outsourcing services related to development and distribution of AR and VR technologies is majorly held by developing markets including India, China, Brazil and Mexico, thus leading the region to scale in the foreseeable days.

Key Regions and Countries

• North America
  • The US
  • Canada
• Europe
  • Germany
  • France
  • The UK
  • Spain
  • Italy
  • Russia
  • Netherland
  • Rest of Europe
• APAC
  • China
  • Japan
  • South Korea
  • India
  • Australia
  • New Zealand
  • Singapore
  • Thailand
  • Vietnam
  • Rest of APAC
• Latin America
  • Brazil
  • Mexico
  • Rest of Latin America
• Middle East & Africa
  • South Africa
  • Saudi Arabia
  • UAE
  • Rest of MEA

Key Players Analysis

Augmented & Virtual Reality in Healthcare market is fragmented in nature due to presence of several companies operating regionally as well as globally. The industry is facing intense competition due to the emergence of new players with innovative product offerings. Some of the dominant players of augmented & virtual reality in healthcare market include GE Healthcare, Intuitive Surgical, Eon Reality, and TheraSim, Inc. The following are some of the major players in the industry include,

Market Key Players

• CAE
• GE Healthcare
• Siemens Ltd
• Layar
• Bioflight VR
• WorldViz
• Mindmaze
• Vuzix Corporation, Inc.
• Sony Corporation
• HTC Corporation
• Meta Platforms, Inc

Recent Development

• In April 2023: A smart glass and AR technology expert, Vuzix, partnered with Vsee, a telemedicine solutions provider to develop smart glass for telemedicine industry.
• In July 2021: A collaboration was held between Radboudumc and SyncVR to boost virtual reality in healthcare, aiming to provide better care with the help of virtual reality applications.

Report Scope