The location-based augmented reality entertainment market is growing at a compound annual growth rate of 24.4% annually, according to a new report from Greenlight Insights. Add it all up, and AR entertainment vertical will be worth $950 million by the end of next year.
And if that growth rate continues?
AR entertainment could hit almost $4.5 billion by 2030.
The AR entertainment industry's biggest hit is probably still Pokémon Go, by Niantic, a Google spin-off. The company also just released Harry Potter: Wizards Unite on the same platform, but it's not the creative breakthrough that the original game was, and looks to be grossing only 5% of what Pokémon Go did in its first month.
Nevertheless, the AR entertainment ecosystem includes augmented reality installations at museums, tourist sites, and entertainment centers. It's not just apps on phones, although that's still an important and growing component.
At least until we get quality working smartglasses.
I asked Alexis Macklin, the head analyst on the Greenlight report, where this is all going.
Koetsier: What are the fastest-growing areas?
Macklin: Increasingly, premium entertainment venues are turning to mobile augmented reality as an add-on to their out-of-home experiences, especially in the edutainment segments (e.g. museums). Mobile AR experiences are relatively inexpensive to produce and accessible to a mass audience, which contributes to their preference among venue operators.
Koetsier: What are the most important devices, besides phones?
Macklin: Projector-based displays and smartglasses are two of the key technologies enabling augmented reality experiences in the out-of-home entertainment industry today. Excluding smartphones, the use of projection-based systems for augmented reality experiences is most common.
Koetsier: What are your insights around smartglasses, and their time to market?
Macklin: The arrival of powerful, yet cost-effective smartglasses that are purposefully designed for LBE is a key development to watch. However, currently, smartglasses as a form factor are still maturing and it is unclear that the technology will have a significant business impact on the LBE market in the short-term (3 years).
Our research finds that operators are still reluctant due to the unproven ROI of augmented reality activations. Throughput, maintenance and investment length are the top considerations affecting the operator’s purchase decision.
Koetsier: Based on your forecast CAGR, what will the market value be in a couple of years?
Macklin: We estimate the location-based entertainment augmented reality market will be a $950 million dollar industry by the end of 2023. This is largely driven by the continued proliferation of smartphone augmented reality applications. We also expect that smartglasses will begin to have a sizable impact on the market by this time.
Koetsier: Thank you for your time!
