The augmented, virtual, and mixed reality market - Italy (2023)

1.2 The global market

The Extended Reality (***).

The Metaverse

These technologies constitute enablers and gateways to a new new frontier of social interaction and Internet development: the Metaverse. In a nutshell, it is an immersive digital environment where, potentially, any activity could take place. It describes a highly immersive *D virtual worlds experience achieved through the use of the technologies being researched (***).

Currently, the size of the global metaverse market in **** is estimated to be worth $**.* billion. It is expected to grow at a compound annual growth rate (***) of **.*% from **** to ****, reaching $*** billion by ****.

It should be emphasized that since this is an emerging, complex topic that is still in the development phase, the figures given are rough estimates, with values also varying widely depending on the sources. The common factor lies in a great growth potential expected from this market, which is also confirmed by the large investments of large companies.

The global market is divided into hardware, software and services segments according to product. The hardware segment is divided into displays, XR components, and AR/VR viewers. The XR components subsegment is further divided into haptic sensors and devices, smart glasses and omnidirectional treadmills.

The hardware segment, which covers the physical components that ...

1.3 The European and Italian markets

The European XR market has matured over the past few years. One of the main reasons lies in the increasing relevance of XR technology for business applications. This is due to an availability of technologies with superior performance and increasing demand from companies interested in digitizing their processes.

The result is increased investment, especially by large companies, who want to implement extended reality into their workflows, aware of cost and time gains in industrial, business and skill-training-related processes.

Regarding future prospects, more than **% of companies responding to theEcorys XR industry survey expect growth in sales and turnover rate in the next * years. More than **% of respondents represent companies with fewer than ** employees.

Regarding the size of the European market related to XR, two forecasts are reported: baseline scenario and optimistic scenario, with the same starting point at **** with €* billion in revenues. The two different scenarios consider different parameters and future developments, such as investments by the largest technology companies in innovation and the effect of the economic crisis related to the pandemic period. The more optimistic forecast is based on an increase in visor sales, induced by advances in immersive experiences, consumer applications, and content creation. In the baseline scenario the ...

1.4 The main producing countries

The geographical areas most involved in the immersive technology market are:

Asia Pacific North America Europe

In particular, for virtual reality,Asia Pacific accounted for the largest revenue share of more than **% in ****. The growth in the market can be attributed to countries such as China, which is among the leading manufacturers and suppliers of hardware regarding VR technology.In addition, there are a large number of industries and factories in the area that use virtual reality in various processes due to a trend toward automation. Growth in the Asia Pacific market will most likely be supported by the increasing penetration of portable devices.

On the other hand, it is estimated thatEurope is could emerge as the fastest growing market with a CAGR of more than **.*% between **** and ****. This is due to the wide deployment of VR technology in a variety of applications in different industries, particularly in the gaming and automotive industries. Europe also has a large population of gamers, which contributes to the adoption of cutting-edge visors, it is believed,in fact, that the rapid development and sale of powerful hardware aimed at the gaming community has accelerated the growth of this market. (***)

In the augmented reality arena, North ...

1.5 The impact of Covid-19

In addition to the huge investments of big tech companies such as Google, Meta and Amazon, a consistent push toward the improvement and spread of immersive technologies has come from the Covid-** epidemic.

Forced distancing and the spread of smart working have forced companies to rapidly digitize and use online channels to carry out their activities. Some companies have even resorted to training and education through AR and VR devices. According to an Italian Design Insitute lecturer at the Postgraduate Course in Augmented & Virtual reality interior design, Veronica Vecci, covid-** would give a boost to the whole virtual world, not only within companies, but also in the retail sphere. According to IBM's U.S Retail Index Report ****, the pandemic would accelerate the shift to digital shopping by about * years. The inability to travel to stores in person has prompted large companies in the cosmetics and fashion spheres to promote augmented reality apps that can simulate product trials. Interior design is an area that perceived the potential of such technologies even before the arrival of the pandemic; IKEA,among the first, introduced a branded virtual furniture app. What was partially slowed down by the high costs ,the low diffusion of hardware devices,and ...

2.1 Demand characteristics

According to a survey conducted by The Innovation Grourp and Web* Alliance, **% of the Italian companies involved say they are interested in the phenomenon of Web *.*, a new frontier of the Internet that includes Augmented Reality, Virtual Reality, NFT (***), Blockchain, Artificial Intelligence and thus, generally speaking the Metaverse.

Specifically, ** percent of these companies that showed interest in the topic are in a study phase, * percent also have a pilot project, and * percent are using the new technologies.

The initiatives planned by companies mainly concern digital events, branding, smart working, creation of ad hoc digital tools, NFTs, and creation of virtual worlds.

Going into more detail regarding the technologies involved in new enterprise developments, Artificial Intelligence is definitely most prevalent, however, right after that are the immersive technologies of AR and VR, most of which are in a study phase.

How much Web *.* technologies are part of enterprises' innovative developments Italy, ****, % web*alliance.co.uk

The business areas most involved according to the survey are: Marketing and Communication, Innovation. In any case, the topic is very cross-cutting and may also involve other areas that are necessary for project development: IT, R&D, Sales, CRM, HR. (***)

As far as theend user is concerned, ...

2.2 Demand drivers

Immersion and sense of presence

These are the elements that best characterize extended reality (***)

Variety of application areas

Although initially the use of such technologies was associated with the world of gaming, currently such instrumentation is increasingly gaining a key role within various sectors, with even very different applications, due to their cross-cutting characteristics. The main areas of application currently include:

Training and certification of skills Design and development of new products Solutions for improving situational awareness B*C applications

(***)

Risk Reduction.

Immersive experiences are also useful as tools for testing solutions in a safe way, which leads to increased safety and also cost savings in implementation. Through the digital twin solution, it is possible to explore a physical (***)

Improving efficiency

Manufacturing is one of the most significant fields for extended reality. This is mainly because it can make all complex physical tasks safer and more efficient. For example, Boeing uses AR to help reduce the overall cognitive load of employees working on aircraft assembly and to improve the efficiency of production processes. It can also be useful in making access to documentation even easier and faster through the use of instrumentation such as visors or smart glasses. (***)

2.3 Demand trends

More affordable hardware devices

To work effectively, immersive experiences require powerful and expensive hardware. Not all users can afford high-end devices, which is also why large-scale adoption is currently limited. Solutions such as Oculus Quest * are making VR more accessible, but hardware limitation remains a significant obstacle. (***)

Motion sickness

"Motion sickness" (***) is a challenge that plagues some users in immersive experiences. It occurs when people experience dizziness and nausea after wearing a viewer. It occurs when the brain receives conflicting signals regarding movement in the environment and the body's perception of it.This means that standing still, but in a moving virtual environment, disrupts the brain's balance and different symptoms besides nausea may also occur, such as headaches, sweating, and fatigue. Research in neuroscience and design is working to reduce these effects, for example, by improving refresh rate and motion tracking.

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Privacy

The collection of biometric and behavioral data raises serious concerns about user privacy. New immersive technologies can collect much more information about user identity and behavior than social networks or other forms of technology. In addition to the appropriation of users' personal data, there is also the danger of spreading false information through devices, embedding malicious ...

3.1 The main market players

Several projects related to XR technology can be found in Italy, the most promising companies in this landscape are listed below in descending order of turnover.

Hevolus s.r.l: is an innovative digital company specialized in creating phygital customer experiences. Founded in **** in Molfetta (***), it has become among the leaders in the world of disruptive technologies: Metaverse, MR, AR, VR, AI, Microsoft Dynamics and cognitive services. It uses these technologies to innovate the shopping experience and business strategies of its target markets. It targets the entire retail industry, the maintenance sector, and the Tourism, Culture and Education sector. He also works on Corporate Open Innovation for the multinational company Wurth. Since ****, he has had CDP Venture Capital SGR by his side as an investor supporting the company's global growth.

Over holding s.r.l: founded by Davide Cuttini, is a platform that combines Augmented Reality and Blockchain to provide users with geolocalized three-dimensional content. Through the platform, users can build, buy or even just browse virtual spaces. These spaces are purchased through OVR tokens (***) and are auctioned at a minimum price of $**, while tokens can be purchased starting at $*.*. Currently, navigation can be done through the smartphone camera, but the ...

3.2 The value chain

The value chain related to immersive technologies reflects the complexity of these innovations, which are closely connected to and enabled by other technologies, which are shown in the following graphic.

In particular, with regard to hardware devices , which constitute the human interface, two examples are given: HTC Vive (***), with related components.

3.3 Distribution

The Milan Polytechnic Observatory identified and analyzed *** XR projects in the B*C sphere and *** in the B*B sphere, active in Italy as of **** [***]

The sectors with the highest number of consumer-facing projects are Art&Tourism (***). In the Tourism&Art sphere, the opportunity is given to virtually visit museums, such as the Uffizi Gallery, and the on-site experience has been enriched by offering interactive content, such as games or puzzles at the Royal Museums of Turin. Retail companies have also leveraged XR to increase engagement and enrich the customer experience, giving the opportunity to have additional information about products, for example in Lego stores you can see how the game is built, and consntendo to preview products remotely, such as the solution developed by Ikea.

XR projects in B*c Italy, ****, % [***] observers.net

Regarding the B*B/B*E segment, the most active sectors are Industrial Manufacturing(***) with the creation of virtual rooms for specific training paths.

XR projects in the B*b/B*e sphere Italy, ****, % [***] observatories.net Until ****, due to immature and very expensive technology offerings, projects developed in both B*c and B*b/e spheres were mainly stand-alone, i.e., not integrated into business systems and ...

3.4 International market leader

The following are the major players in Extended Reality internationally.

Meta: Reality Labs is the division of the company responsible for the development of immersive technologies, with the ultimate goal of building a metaverse in its fullest definition. Among the products and services provided are virtual reality hardware dispositions and platforms where various activities can be performed through the use of these technologies. Among the utlest innovations is the Quest PRO VR visor that integrates technologies needed for mixed reality.

Unity: known for its *D game engine, has partnered with organizations that manage several large airports to develop digital twins of their facilities, which can be used for various purposes such as ristrurruction, future planning, simulations, and more. It offers the ability to integrate Augmented and Virtual reality solutions into their projects.

Google: Google VR services offer virtual reality features for Daydream and Cardboard apps, such as viewing notifications in VR mode, pairing with visors and smarthphones that support the mentioned apps. In addition, after the lack of success of the Google Glass augmented reality glasses, the company is working on a new initiative, Project Iris, which will likely involve the development of a mixed reality visor.

Microsoft: the company is ...

4.1 Supply analysis

The generic term of"Extended Reality" or in abbreviated form"XR" describes an existing set of immersive technologies that enable us to "extend" reality and our senses through the addition of digital elements or by creating virtual worlds. The "X" denotes any possibility offered by technologies also known as Spatial Computing, so it includes those that enable Augmented Reality (***).

Augmented Reality (***) consists of the enrichment of reality through the addition of audiovisual information and perceptions electronically that would not otherwise be viewable. One example is the use of dedicated apps or glasses that allow one to frame the real world and see the addition of digital information. Early experimentation must be traced back to the ****s when the first helmets with screens were developed in military laboratories that projected additional data into the field of view of aircraft pilots. The term only became popular in ****, thanks to the worldwide success of the Pokémon Go app, designed by Niantic. Virtual Reality (***) describes the digital simulation of an environment, real or imaginary, that the user can inhabit by interacting with it through specific hardware peripherals. These experiences are characterized as being highly immersive in that one feels part of an explorable environment ...

4.1 Main devices and prices

Immersive experiences are made possible by hardware systems, thus by devices that enable the different types of extended reality.

Augmented Reality - it is essential to have a display to view the output video stream. In addition to computer monitors and screens for portable devices, there are more specific tools, namely Head-Mounted Displays that can be divided into two categories: optical see-through and video see-through. The former use a system of mirrors to semi-transparently superimpose virtual elements on the surrounding reality; the video see-through type use one or two opaque systems, quite similar to monitors, to display full AR images. The main advantage of HMDs is that they do not force the user to remain facing the direction of the screen, and such devices can often integrate additional sensors, for example, to enable head tracking. Among the most popular wearable tools are Smart Glasses: wearable computers that allow digital information to be displayed on the lenses. This type of tool has proven suitable for business settings that need remote assistance or to perform fairly delicate actions where free use of the hands is required. In addition to glasses, which are substantiated by a smartphone with a different format, there are also ...

4.3 New supply trends

The field of immersive technologies is constantly evolving; the following are the main development trends in the offering of such innovations with their applications.

Evolution of the retail sector through immersive technology

The Retail sector has been experiencing a continuous and constant digital transformation for years, driven by the growing demand for dynamic, personalized and immersive shopping experiences. In this context, immersive technology emerges as one of the tools with the greatest potential. In particular, AR can enhance the in-store shopping experience by offering solutions that provide access to additional product information, reviews, price comparisons and promotions in real time. In addition, it is a useful tool for retailers with a view to optimizing inventory management and product presentation through navigation and space detection systems. With Virtual Try On, customers can have the opportunity to visualize in real time how a particular item fits with its appearance, simplifying the scellta and reducing the number of returns. AR also offers opportunities for interactive product customization. Customers can view a product in high-definition, change its color, design and other attributes in real time, positively impacting the sales conversion rate. In addition, such tools can be used to create innovative marketing campaigns and support ...

5.1 Legislation

There is no specific, uniform legislation for immersive technologies globally. However, such innovations may raise legal and ethical issues in different areas, so many nations are considering the development of ad hoc legislation and regulations. With regard to Italy and, more generally, Europe, it is necessary to understand what existing laws can be implemented in the context of the application of immersive technologies, including in particular the Metaverse, and where it is appropriate to intervene with new laws and regulations. The European Economic and Social Committee (***) has commented on this issue in a consultation dated **/*/****.

The EESC emphasizes the need forongoing analysis of existing legislation to assess whether it is sufficient to regulate virtual worlds and highlights several areas to monitor.

Immersive technologies can affect the working conditions, health and safety of workers. So, it is important that appropriate measures are put in place to ensure sufficient informaiton to these issues, including social dialogue and collective bargaining. The EU needs to ensure that the legislation in place in the real world is also respected in the virtual world and that, where necessary, appropriate measures are taken to address specific needs. Issues related to the taxation of activities that occur virtually appear ...

5.2 The incentives

The national Transition *.* plan provides a series of incentives to support the digital transformation of enterprises. The enabling technologies of the Industry *.* paradigm include immersive technologies.

The plan comes about by providing tax credits that incentivize:

purchase of simple tangible and intangible capital goods purchase of tangible and intangible capital goods *.* research, development, innovation and design activities training *.*

Unlike the previous plans (***), the current plan leverages the tax credit mechanism that allows even companies with no profit and agricultural enterprises to benefit from the incentive.

Created in ****, the Transition *.* plan has been greatly enhanced over the period ***-**** thanks to **.* billion in the NRP and an additional * billion in a supplementary fund. Once these funds were exhausted, for the period ****-**** the measure was renewed with less advantageous rates.

As for the tax credit for research, development, innovation and design activities, which may include experimentation with XR technologies, the incentive applies until **** for R&D, until **** for innovation and design. The rates are as follows:

**% for R&D capped at €* million *% for innovation and design with ceilings of * million euros **% for innovation with purposes geared toward an ecological transition goal or digital innovation *.* with a ceiling of * million euros

The ...

6.1 Segmentation

• Hevolus s.r.l
• Over holding s.r.l
• Invrsion s.r.l
• Pikkart s.r.l
• Impersive s.r.l
• Coderblock s.r.l