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Like many analyst firms, market sizing is one of the ongoing practices of AR Insider’s research arm ARtillery Intelligence. A few times per year, it goes into isolation and buries itself deep in financial modeling. One such exercise zeroes in on mobile AR revenues.
This is one of the main subdivisions of spatial computing – others including headworn AR and VR. They’re all related and share technological underpinnings, but are driven by separate market forces such as their respective hardware bases (see methodology and inclusions).
So what did the mobile AR forecast uncover? At a high level, global mobile AR revenue is projected to grow from $10.5 billion in 2023 to $21.5 billion in 2028, a 15.4 percent CAGR. This sum consists of mobile AR consumer and enterprise spending and their revenue subsegments.
Drilling down, our latest Behind the Numbers installment looks at the forecast’s outlook for mobile AR experience development. How much is spent on software that enables developers to build consumer apps, games and experiences? And what’s driving that revenue opportunity?
Time to Market
Jumping into the numbers, global mobile AR app & game development spending (software license or SaaS) is projected to grow from $202.5 million in 2023 to $383.9 million in 2028. This is a 13.7 percent compound annual growth rate, representing steady but challenged adoption.
As for how this spending breaks down, it primarily includes mobile AR experience creation platforms, but also optimization and enablement tech like Mawari. It doesn’t include overhead like developer salaries & agency fees, nor software to create AR marketing (measured separately).
Naming names, developer platforms used in mobile AR experience creation include everything from Unreal Engine to Niantic. It doesn’t include platforms like Snap Lens Studio and Meta Spark as they’re free, recouping revenue in downstream ad campaigns (again, tracked separately).
In either case, these players have one thing in common: enabling brands, game studios, and developers to create consumer AR experiences. These developer tools will grow in demand as AR itself does, because they lower barriers to creation and accelerate time to market.
This makes spending on AR media and games enablement fall into a category we call B2B2C. It will continue to develop as an opportune AR revenue category, as it represents the classic “picks and shovels” that democratize advanced AR experience creation and distribution.
Activation Energy
Mobile AR game & app development software also correlates to the growing population of AR developers and creators, which are estimated at 1.32 million. They include a mix of technical developers and creative pros who work with AR (e.g., Snap Lens creators).
As AR continues to gain traction among consumers and brand marketers, these AR creative pros will opportunistically migrate to the medium. Beyond hands-on developers and creators, brand marketing departments and ad agencies will increasingly adopt low-code AR platforms.
This trend will benefit the AR enablement tools outlined above, but one area we’re particularly bullish on is web AR. The streamlined use case and relative lack of activation energy (e.g., downloading apps) could make web AR pull ahead as a go-to modality for AR development.
We could also see growth in App Clips, which offer the best of both worlds. They contain native-app-like functionality while being activated with easy-onboarding formats like links and QR codes. Adobe Aero continues to use App Clips as an AR vessel and we could see others follow.
We’ll pause there and circle back in the next Behind the Numbers installment to drill down on another spatial computing subsegment.
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