United States Augmented Reality & Virtual Reality Market By Technology Type (Augmented Reality, Virtual Reality), By Component (Hardware, Software, Services), By End-User Industry (Healthcare, Automotive, Retail, Gaming, Others), By Region, Competition, Forecast and Opportunities, 2021-2031F

Forecast Period	2027-2031
Market Size (2025)	USD 8.68 BIllion
CAGR (2026-2031)	8.75%
Fastest Growing Segment	Software
Largest Market	Northeast
Market Size (2031)	USD 14.36 BIllion

Market Overview

The United States Augmented Reality & Virtual Reality Market will grow from USD 8.68 BIllion in 2025 to USD 14.36 BIllion by 2031 at a 8.75% CAGR. Augmented Reality (AR) overlays digital elements onto the physical environment, while Virtual Reality (VR) immerses users in a completely simulated digital realm. The United States market is expanding rapidly, driven by the increasing adoption of these technologies for enterprise training and simulation across sectors such as healthcare and manufacturing. This commercial utility complements the sustained demand for immersive entertainment and gaming experiences. According to the XR Association, in 2024, 72% of manufacturing professionals reported that extended reality technologies deliver a positive return on investment for employee training. This trend highlights the tangible operational benefits that are propelling the industry forward beyond mere consumer novelty.

Despite this growth, the market faces a significant challenge regarding the high cost of implementation and hardware acquisition. Small and medium-sized enterprises often struggle to justify the substantial initial investment required for premium headsets and custom software development. This financial barrier limits widespread accessibility and slows mass adoption rates among cost-sensitive consumer segments and smaller commercial entities.

Key Market Drivers

Strategic corporate investments in spatial computing ecosystems are driving the United States Augmented Reality & Virtual Reality Market as technology firms allocate capital toward hardware and software infrastructure. This financial commitment accelerates the transition from experimental prototypes to commercially viable mixed-reality platforms. According to UploadVR, October 2024, in the 'Meta's Reality Labs Revenue Rebound Continued In Q3' article, Meta's Reality Labs division reported $270 million in revenue, reflecting the substantial scale of these ecosystem-building efforts. These investments validate the technology for professional applications, encouraging large organizations to integrate premium headsets into their workflows. According to Apple, in 2024, half of the Fortune 100 companies had purchased Apple Vision Pro units, signaling a robust expansion of enterprise utilization driven by these strategic supply-side developments.

The integration of immersive technologies in healthcare and medical procedures acts as a second primary driver, anchored by regulatory advancements and proven clinical utility. Medical institutions are increasingly adopting these tools for pre-surgical planning and intraoperative visualization, which improves procedural accuracy and patient outcomes. This growth is underpinned by a regulatory environment that actively clears new digital health solutions for market entry. According to Radiology Business, September 2024, in the 'FDA updates list of cleared VR, augmented reality devices, with radiology leading the way' report, the U.S. Food and Drug Administration had authorized a total of 69 medical products that incorporate augmented or virtual reality. This expanding portfolio of cleared devices demonstrates the medical community's growing reliance on spatial technologies for critical diagnostics and treatment.

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Key Market Challenges

The prohibitive cost of implementation and hardware acquisition constitutes a substantial barrier hampering the growth of the United States Augmented Reality & Virtual Reality Market. Developing high-fidelity immersive environments requires significant capital expenditure on premium headsets and specialized software, creating a steep entry threshold. Small and medium-sized enterprises often struggle to rationalize these upfront expenses against uncertain immediate returns, effectively restricting the technology's reach to well-funded large corporations and stalling broader commercial integration.

This financial friction directly impedes the transition from niche utility to widespread mass adoption. The market's struggle with expensive physical assets is reflected in broader sector performance. According to the Consumer Technology Association, in 2024, the United States technology industry faced a third consecutive year of declines in hardware revenues. This trend underscores the economic resistance businesses and consumers currently face regarding high-value device acquisition. Consequently, the substantial investment required for AR and VR units remains a critical bottleneck, preventing the industry from capitalizing on demand from cost-sensitive segments and slowing overall market velocity.

Key Market Trends

Widespread Adoption of Virtual Try-On Tools in Retail is fundamentally reshaping the consumer purchasing journey by bridging the gap between digital browsing and physical interaction. Retailers are embedding these augmented reality solutions into their platforms to minimize return rates and enhance engagement, particularly within the fashion and beauty sectors. This technology allows customers to visualize products in their own environment, significantly boosting transaction confidence. According to Capital One Shopping, September 2025, in the 'AI Shopping Statistics (2025 Report)' article, 77% of online consumers expressed interest in AI-driven virtual try-on features, which were found to increase positive product reviews by 60%, underscoring the value of immersive decision-support tools in driving customer satisfaction.

Convergence of AR and VR into Mixed Reality (MR) Passthrough Devices is establishing a new standard for enterprise operations, allowing users to interact with digital content while maintaining a visual connection to their physical surroundings. This technological leap addresses the isolation of traditional virtual reality, enabling collaborative design and real-time data overlay in professional environments. The capability to seamlessly blend high-resolution digital twins with the real world is driving targeted adoption among commercial entities seeking to modernize their service delivery. According to The Wall Street Journal, September 2025, in the 'Apple Vision Pro Gaining Traction in Business Despite Slow Consumer Sales' report, home improvement retailer Lowe's confirmed plans to expand its mixed reality kitchen design initiative to 100 stores by the end of the year, validating the operational utility of passthrough technology.

Segmental Insights

The Software segment represents the fastest-growing category within the United States Augmented Reality and Virtual Reality Market, driven by the increasing necessity for immersive content across enterprise sectors. This growth is largely sustained by the widespread adoption of training simulations and remote collaboration tools in industries such as healthcare and defense. As hardware availability stabilizes, American technology firms are heavily investing in application development and cloud-based platforms to enhance user utility. Consequently, the continuous demand for specialized applications to operate these devices ensures that software solutions outpace hardware sales in current market expansion.

Regional Insights

The Northeast United States commands the leading position in the Augmented Reality and Virtual Reality market, fueled by aggressive adoption across diverse commercial sectors. Major economic centers such as New York and Boston drive this dominance, utilizing immersive technologies for advanced healthcare training, educational simulations, and interactive media. The region benefits from a high concentration of affluent consumers and enterprises willing to invest in productivity-enhancing tools. Consequently, the convergence of strong industrial demand and a tech-forward population establishes the Northeast as the primary hub for market expansion.

Recent Developments

• In September 2024, a camera and social media company headquartered in Santa Monica unveiled the fifth generation of its augmented reality eyewear during its annual partner summit. The new standalone glasses featured a see-through display powered by a proprietary operating system, enabling users to interact naturally with digital lenses overlaid on the real world. This launch introduced a developer-focused device with a significantly improved field of view and battery life compared to previous iterations. The release underscored the company's persistent investment in augmented reality hardware, aiming to foster a rich ecosystem of immersive applications within the US market.
• In September 2024, a social technology conglomerate revealed a breakthrough prototype of its first true augmented reality glasses at a developer conference in California. Described by leadership as the most advanced AR eyewear ever created, the device utilized holographic displays and a neural wristband interface to allow users to control digital content while remaining present in their surroundings. Although not immediately available for consumer purchase, this research milestone demonstrated significant progress in miniaturization and display technology. The reveal highlighted the company's long-term vision to establish the next generation of computing platforms in the United States augmented reality market.
• In May 2024, a leading augmented reality startup announced a strategic technology partnership with a multinational technology giant to collaborate on future immersive experiences. This alliance aimed to combine the startup's extensive expertise in optics and hardware manufacturing with the tech giant's advanced software platforms. The collaboration signaled a renewed commitment by the technology corporation to the augmented reality sector, intending to foster a broader extended reality ecosystem. By leveraging their respective strengths, the companies planned to deliver unique solutions that blend the physical and digital worlds for both developer ecosystems and enterprise customers in the United States and globally.
• In February 2024, a major technology corporation based in Cupertino officially launched its highly anticipated spatial computing headset across the United States. Priced at $3,499, the device seamlessly blends digital content with the physical world and became available at all US retail locations and online stores. This significant product launch marked the company's first entry into the mixed reality headset category, featuring an ultra-high-resolution display system and a custom dual-chip architecture. The headset introduced a revolutionary operating system controlled entirely by a user’s eyes, hands, and voice, positioning it as a sophisticated advancement that redefines personal computing within the competitive US market.

Key Market Players

• Microsoft Corporation
• Google LLC
• Apple Inc.
• Meta Platforms, Inc.
• Sony Corporation
• Samsung Electronics Co. Ltd.
• Magic Leap, Inc.
• Qualcomm Incorporated
• HTC Corporation
• Unity Software, Inc.

By Technology Type	By Component	By End-User Industry	By Region
Augmented Reality Virtual Reality	Hardware Software Services	Healthcare Automotive Retail Gaming Others	Northeast Midwest South West

Report Scope:

In this report, the United States Augmented Reality & Virtual Reality Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

• United States Augmented Reality & Virtual Reality Market, By Technology Type:

• Augmented Reality
• Virtual Reality

• United States Augmented Reality & Virtual Reality Market, By Component:

• Hardware
• Software
• Services

• United States Augmented Reality & Virtual Reality Market, By End-User Industry:

• Healthcare
• Automotive
• Retail
• Gaming
• Others

• United States Augmented Reality & Virtual Reality Market, By Region:

• Northeast
• Midwest
• South
• West