While the gaming industry was the first to adopt AR and VR, other sectors, including healthcare, are now started to see the advantages of these technologies and are exploring their potential to be used in medical applications.

The global Augmented Reality (AR) and Virtual Reality (VR) in healthcare market is valued at ~$1.5 billion in 2020 and is expected to grow at a CAGR of >25% to cross $5 billion by 2025. This growth will be fueled by technological advancements and growing digitization, supporting government initiatives, a substantial number of start-ups entering this market, a broad range of applications, and rising partnerships/M&As, and funding levels.

Significant Potential for AR and VR in Healthcare Market

AR and VR in healthcare is presently a niche market but offers huge growth potential. Medical training, surgical planning, pain management, patient care management, and mental health treatment are some of the applications. The scope of application of AR and VR is quickly rising with growing number of startups entering into this space to offer variety of hardware and software targeting different areas of healthcare.

“The potential of AR and VR in healthcare is huge. Companies in this advanced technology field are constantly striving to surpass the challenges by developing accurate and explicit solutions that enable breakthroughs in the way treatment and diagnosis is done in the medical field.” - Chief Executive, Provider of AR Platform for Surgery Guidance, US

Surging VC/PE Investments and Regulatory Approvals Accelerating Growth & Innovation in AR and VR in healthcare market

The Covid-19 pandemic induced the world to go virtual. The past few years have been a turning point for healthcare technology, with some overhyped technologies like AR/VR finally becoming a reality due to surging VC investments and regulatory clearances.

For instance,

  • in Nov 2021, the FDA approved AppliedVR’s EaseVRx, a prescription-use immersive VR system for chronic pain reduction.

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North America Leads the Adoption While EU is Not Far Behind

North America dominates the AR/VR in the healthcare market driven by supporting healthcare IT infrastructure, significant VC fundings, presence of large number of AR/VR companies/startups in the US and favorable government initiatives.

Lack of VR and AR skilled professionals is a challenge in Europe but this region is catching up fast and countries like France, Germany, UK, Sweden, Netherlands and Italy are likely to offer vast growth opportunities for AR/VR in healthcare.

Competitive Landscape Analysis of Augmented Reality (AR) and Virtual Reality (VR) in Healthcare Market

The global AR and VR in healthcare market is highly competitive and fragmented. Some of the key and emerging players in this market include CAE Healthcare, GE Healthcare, Philips Healthcare, Microsoft, Intuitive Surgical, Psious, MindMaze, Virtualis, Oxford VR, Augmedics, Surgical Theater, EchoPixel, Medivis, Health Scholars, Touch Surgery, Medical Augmented Intelligence and XRHealth.

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About Medi-Tech Insights

Medi-Tech Insights is a healthcare-focused business research & insights firm. Our clients include Fortune 500 companies, blue-chip investors & hyper-growth start-ups. We have completed 100+ projects in Digital Health, Healthcare IT, Medical Technology, Medical Devices & Pharma Services.


Ruta Halde

Associate, Medi-Tech Insights

+32 498 86 80 79

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