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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 include 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 $10.04 billion in 2024 to $15.45 billion in 2029, an 8.98 percent CAGR. This sum consists of consumer and enterprise spending and their revenue subsegments.
Drilling down, our latest Behind the Numbers installment looks at consumer spending in mobile AR. Though most mobile AR experiences are brand-sponsored (e.g., branded lenses) rather than user-purchased, the latter is an important barometer for the technology’s penetration.
Early & Unproven
First, to define consumer AR, it’s any mobile AR apps and experiences that consumers pay for (excluding mobile devices). It doesn’t include software that helps businesses develop consumer AR (measured separately as B2B2C). It’s limited to direct consumer spending.
Consumer AR spending is also subdivided by digital and physical goods. Digital goods include games, apps, or in-app purchases (IAP). Physical goods spending tallies the transaction value of products whose sale is informed or influenced in some way through AR (e.g., virtual try-ons).
Starting with digital goods, spending was estimated to be $605 million last year, growing to $692 million in 2029. This is dominated by IAP – mostly due to Pokémon Go, which still generates revenue – as it accounts for 94 percent of consumer mobile AR digital goods spending.
Spending is relatively low because consumers largely aren’t compelled to pay for AR. They’ve been conditioned to expect free experiences, which is a hard trend to reverse. As noted, most consumer AR is brand-sponsored (think: Snapchat lenses) rather than user-purchased.
But as Pokémon Go engagement recedes from its previous peaks (2016 introduction and Covid-era inflections), other flavors of in-app purchases are emerging. For example, Snap’s Lens+ – an offshoot of Snapchat+ – offers paid and early-access lenses for power users.
Cars to Couches
Moving on to AR physical-goods spending, it will grow from an estimated $80.8 billion last year to $162.9 billion by 2029. Again, this includes consumer purchases that are informed or influenced through AR product visualization – everything from cars to couches.
As a sidenote, spending on AR-influenced physical goods is tracked for perspective but isn’t counted as AR revenue per se. It’s rather spending on physical goods influenced through AR, meaning it would inflate AR’s value to assign that revenue (e.g., a new couch) wholly to AR.
Regardless of its classification, a key question is why such steep growth – doubling by 2029? In addition to starting from a small base – where larger percentage growth is often seen – it’s driven by momentum and escalating purchasing power among the camera-native Gen-Z.
But it’s worth noting that, though this is steep growth, there’s still ample headroom for AR shopping. For example, the $162.9 billion projected for AR-influenced physical goods spending in 2029 is only .28% (one third of one percent) of the 58 trillion in global consumer spending.
In terms of formats, visual search and social lenses lead. Visual search flies under the radar but is influential, given that Google sees about 20 billion visual searches per month. Social lenses meanwhile continue to engage users, thanks to Snap’s efforts and investments.
Web AR will likewise grow over time due to lower friction to launch AR experiences, and the ability to run marketing campaigns through web-compatible channels. Among product categories, cosmetics leads, followed by clothing, jewelry, furniture, and home appliances.
We’ll pause there and cue the full report, and circle back in a future Behind the Numbers to unpack more market-sizing data…
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