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As we approach a new year, it’s time for our annual ritual of synthesizing the lessons from the past twelve months and formulating the outlook for the next twelve. 2024 was an incremental year for AR & VR, which both continue to gradually trudge uphill toward mainstream traction.
Highlights this year include XR’s initial convergence with AI, Apple Vision Pro’s slow traction, and some ups and downs for VR. 2024 was also defined by the rise of low-immersion smart glasses, and aspirational high-immersion AR glasses like Snap Spectacles and Meta Orion.
All these approaches – passthrough AR, seethrough AR, and non-display smart glasses – represent a divergence and diversification of form factors. That’s a good thing, as XR should include several formats that are purpose-built and use-case-driven – a key trend seen this year.
With that backdrop, what will 2025 look like in spatial computing? Aligned with the more extensive predictions of our research arm, ARtillery Intelligence, we’ve devised 5 predictions. We’ll break them down weekly, continuing here with prediction 4: Mixed Reality Development Amps Up.
Prediction 1: AR & AI Collide
Prediction 2: XR Form Factors Diverge & Diversify
Prediction 3: Meta Orion Inspires Seethrough AR
Prediction 4: Mixed Reality Development Amps Up
Prediction 5: Visual Search’s Mainstream Move
Mixed Feelings
In last year’s predictions, we stated that mixed reality would become a standard in VR in 2024. In other words, HD passthrough cameras that display the outside world to the user – as an enabling function for passthrough AR – would become table stakes in VR hardware.
We’re confident to say that happened, mostly due to the industry standard set by Meta Quest 3, and Quest 3s, not to mention Apple Vision Pro. Meta wasn’t first to market with mixed reality, given hardware from Varjo and others, but it introduced the element of affordability.
This accomplishes a few things. First, it broadens use cases for VR, including apps and games that interact with the physical world as opposed to fully-occluded and insular experiences. It also elevates AR by giving it a more established and penetrated vessel to piggyback on.
Lastly, the standard that Meta set alters competitive dynamics in the VR landscape. In other words, Any VR devices that launch without mixed reality carry a competitive disadvantage right out of the gate. They’ll have limited utility compared to mixed-reality-enabled VR.
Reach-Driven & ROI-Minded
This year, we’ll double down on that prediction but also add to it. Following greater market penetration of any given hardware, the next domino to fall is often greater software development. Reach-driven and ROI-minded developers and content creators are attracted to the platform.
This incentive is based on the notion that their work is rewarded with larger audiences – a numbers game. That’s all to say that in 2025, we’ll see an inflection in mixed reality development. This will be seen and felt greatest in the Meta store, as it offers the greatest potential market.
But we’ll also see development for the venerable VIVE XR Elite and Focus Vision. To a lesser extent (volume-wise), we’ll see more Vision Pro apps. The latter will mostly skew towards enterprise and professional use cases such as productivity and video conferencing.
Meanwhile, mixed reality apps in general will include everything from workplace productivity (think: floating virtual monitors), to gaming that interacts with one’s space. Successful apps will apply native thinking by leaning into mixed reality’s spatial and social-presence capabilities.
For example, expect more tabletop experiences and fitness apps/games. The latter will be a big category that builds on its current demand, while adding greater physical world interaction and presence/safety. This adds dimension and appeal to an already popular VR category.
Boiling it Down: 2025 Prediction
In 2025, a mixed reality game will break into the top-five in Meta Store sales volume. The overall growth of mixed reality titles for Meta will also accelerate the value and appeal of its headsets. That will boost sales which, in turn, attracts more creators and developers… then more device sales – a classic flywheel effect. This could happen gradually but meaningfully in 2025.
We’ll pause there and circle back next week with another 2025 prediction. Meanwhile, check out the full report.
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