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Though spatial computing and all its subsegments continue to hold great potential, they also face headwinds. Factors holding them back include challenged technological advancement and cultural adoption. However, bright spots include the rise of AI-powered smart glasses.
For example, as seen in Meta’s earnings, smart glasses have offset declines in other subsegments, such as consumer VR. Altogether, it’s a mixed story with both positive and negative drivers. The good news is that the positives will mostly outweigh the negatives in the near term.
To wrap some numbers around these claims, spatial revenue is projected to grow from $28.5 billion in 2025 to $61.4 billion in 2030. That’s steep growth, driven by a projected inflection next year as new smart glasses blitz the market from Apple, Meta, Google (AndroidXR), and others.
What else is driving revenues, and what are strategic implications? These questions are tackled in the latest spatial revenue forecast from our research arm, ARtillery Intelligence. This Behind the Numbers series excerpts insights, continuing here with B2B2C spending estimates.
Segments & Subdivisions
After the last installment of this series looked at enterprise spending (B2B) in XR, we switch gears in this installment to dive into B2B2C. What’s the difference? B2B involves enterprise end users, such as visually-guided productivity. B2B2C is all about the tools to develop XR for consumers.
Enterprise Spending in this category is projected to grow from an estimated U.S. $7.31 billion in 2025 to U.S. $11.64 billion in 2030. This spending primarily comes from two B2B2C subdivisions – marketing & commerce enablement (MCE) and experience creation & development (ECD).
To layer in more context, the former represents a cost center – just as marketing is an expense on any P&L. The latter is also expense but is more directly tied to product, as it’s a means to produce revenue-generating apps and experiences – cost of goods sold in accounting terms.
For example, MCE includes XR experience creation software, creative agency fees, optimization & enablement tools (e.g., e-commerce integrations) as well as paid placement (e.g., Snapchat sponsored lenses). ECD meanwhile includes a range of development software such as Unity.
Within MCE, XR experience creation software spending is diminished by the fact that some AR marketing creation tools are free. For example, Snap Lens Studio is offered free as a loss leader to drive Snaps’ downstream sponsored lens revenue – one of the biggest components of MCE.
Creative Sensibilities
So what’s driving these categories. With MCE, it’s all about brand marketers’ interest in immersive product experiences, such as branded lenses or virtual try-ons. This not only resonates with their creative sensibilities but shows a strong business case through high-performing campaigns.
ECD is meanwhile driven by game studios, app developers and others that want to create immersive experiences for consumers. The elephant in the room is that ECD is fairly low today, due to the narrow market for paid XR games & experiences – mostly limited to VR games.
In fact, when looking at AR, there’s very little ECD spend, as there’s very little consumer spending on paid AR experiences. As we often say, most consumer-facing AR is brand sponsored rather than user purchased. This is why MCD is a much larger enterprise spending category than ECD.
Put another way, XR’s relatively low consumer adoption means that the tools to build experiences are likewise constrained in market size. The good news is the headroom for B2B2C spending – especially as the current momentum in smart glasses creates new app development possibilities.
We’ll pause there and circle back in the next Behind the Numbers installment with more numbers & narratives. Meanwhile, check out the full report.