CB Insights - AR VR Trends

2022
AR/VR trends to watch

in 2022 and beyond
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Table of Contents
Simulating workplace training 6
New reach for retail 10
The race to dominate AR development 15
Getting physical in the digital world 19
Immersive therapy & meditation 23
AR/VR TRENDS TO WATCH IN 2022 AND BEYOND 3

Immersive workouts. Training
simulations. Meditation apps in
virtual reality. We identify 5 of the
top trends in augmented and virtual
reality to follow this year.
Augmented and virtual reality are in the limelight once again.
In the past year, news and earnings call mentions of the tech have
reached a fever pitch, fueled by the rise of the metaverse — the
concept of highly immersive and interactive shared worlds. AR
and VR will serve as the main ways consumers engage with these
digital experiences.
Big tech has added to the buzz. For instance, in 2021 alone, Meta
(fka Facebook) sunk $10B into its AR/VR unit, Reality Labs, as it
builds on its metaverse vision.
This is not the first time that AR/VR has gone through the hype cycle.
Interest previously spiked in 2016 — the year that Niantic released

the massively popular Pokémon GO, VR headsets like Oculus Rift
and HTC Vive were released, and AR startup Magic Leap raised
nearly $800M at a $4.5B valuation.
But by the end of 2019, the novelty of consumer AR/VR had

started to fade, as users grew weary of frequent connectivity
issues, congested networks, and products that fell remarkably
short of expectations.

The AR/VR market has evolved considerably in the intervening
years.
In 2016, companies were selling a vision of what AR/VR could be.

Now, companies are selling products reaching mainstream appeal.
For example, Meta’s Oculus Quest 2 is now the most popular VR
headset with an estimated 15M total units sold, and its Reality Labs
unit has seen its annual revenue double each of the past 2 years.
Moreover, while AR/VR remained largely untested in 2016, recent

research has highlighted areas where immersive technology shows
promise, from VR for mental health treatment to virtual try-ons for
improving retail margins.
Advancements in the underlying infrastructure tech — such as 5G,

semiconductors, and AI — are also enhancing the AR/VR experience.
In this report, we identify areas where AR/VR could make a significant

impact in the near future. Read on for 5 trends to watch closely.

Simulating workplace training
Enterprises spend billions of dollars on training employees — a cost

that is likely increasing as millions reshuffle jobs amid the Covid-19
pandemic. VR training companies are building scalable solutions
that can decrease both employee ramp time and training cost.
VR training uses immersive technologies to simulate workplace

settings and challenges. The potential benefits of these simulations
include increased engagement and knowledge retention, as well as
reduced cost of physical training materials.
In 2019 alone, US enterprises spent $83B on employee training,

according to The Industry Report. In 2022, the need for excellent
training programs is even more urgent.
With the global pandemic accelerating career changes — up to 20%

of Americans have changed jobs since the start of Covid-19 per a
Prudential survey — there’s increased demand for tools that can
help new employees ramp up quickly.
VR training offers a promising solution. The National Training

Laboratory found that learners using VR had a knowledge retention
rate of 75%, compared to 10% for retention through reading and 5%
for retention from listening to lectures.
In October 2021, Bank of America partnered with VR startup Strivr

to roll out VR trainings to about 50,000 employees across an array
of use cases — from helping employees detect fraud to teaching
them to navigate difficult conversations with customers. BofA
claims the efforts led to employees learning 4x faster than in
traditional environments.

SOURCE: STRIVR
VR startups are also designing programs to upskill and

educate employees in industries like healthcare, defense, and
manufacturing, where on-the-job mishaps can have costly, dire
consequences, and where training experiences can be difficult or
expensive to replicate in the real world.
For example, Virti trains workers for high-pressure environments

like surgery and military engagement. It raised a $10M Series A in
June 2021 from investors including IQ Capital and Cedars-Sinai
Medical Center.
Similarly, in March 2022, Osso VR raised a $66M Series C from

investors like Kaiser Permanente and Tiger Global to develop its
VR surgery platform. A study from UCLA’s David Geffen School
of Medicine reported that Osso’s training simulation improved
participants’ surgical performance by 230% compared to traditional
training methods.
Startups are also homing in on heavy industries.

In July 2022, Pixo, a startup developing VR training environments
primarily focused on industries like energy and construction, raised
a $6.5M seed round led by its client Saudi Aramco.
Along these lines, Serious Labs teaches workers to operate heavy

machinery using VR simulations that provide feedback based on
factors like route selection and awareness of surroundings.
SOURCE: SERIOUS LABS
In 2021, the US Army launched a virtual reality training facility that

immerses trainees in a 360-degree battlefield simulation. This helps
save on the cost of munitions and allows for custom training times
(live-fire sessions have time constraints).
The US Air Force also launched a Virtual Test and Training Center in
2020 for pilots to practice advanced flight tactics, which improves
pilot safety while saving on the costs of fuel and equipment wear
and tear.

While VR training is gaining traction across industries, there
are some challenges to widespread adoption. For one, training
scenarios need to be built from the ground up. While VR training
companies offer a broad range of solutions, not all enterprises are
the same, and some companies may require unique equipment or
workflow setups.
As a result, startups like Pixo and Immerse offer custom training

solutions. Others are building tools to put AR/VR development in
the hands of the enterprise, so end users can develop the custom
solutions they need.
At the moment, however, perfect VR training environments require

some level of customization — which could increase preparation
time and cost.

New reach for retail
Virtual try-on companies are helping retailers gain traction in the

highly competitive e-commerce space while also reducing the
costs associated with product returns.
Virtual try-on uses a combination of computer vision and

augmented reality to help consumers see how clothes, accessories,
or makeup would look on them before making a purchase.
The tech is emerging as a solution for retailers and advertisers to

boost conversion rates in a competitive e-commerce landscape.
It also could decrease the number of goods being returned due to
incorrect size or fit, which is a significant cost for retailers — the
National Retail Federation estimates returns from 2021 alone could
total $761B.
An estimated two-thirds of consumers are less likely to return

products if they engage with them in AR, according to June 2022
research commissioned by Snap. VNTANA, a startup helping retailers
display products in 3D, claims customers using its AR platform see
a 40% decrease in returns and an 83% increase in conversion.

SOURCE: PERFECT CORP
Snap’s AR strategy is tightly interwoven with its plans to enable

social shopping on its mobile platform. In 2021, Snap acquired
Vertebrae, a startup using AR to create 3D visualizations of
products, to improve its on-platform AR capabilities. More recently,
in April 2022, Snap released its Dress Up feature, which allows
users to try outfits on over their full body.
Similarly, Meta is using AR to improve advertising conversion for

its retail partners. In 2021, the tech giant partnered with try-on
companies ModiFace (acquired by L’Oreal) and Perfect Corp to
offer AR try-on for beauty products in its Instagram Shops.

In April 2022, Meta acquired PreSize, a startup using smartphone
cameras to measure customers’ bodies and help them determine
how clothing will fit. While not an AR company per se, the startup’s
technology could set the foundation for Meta to develop full-body
AR try-on to compete with Snap.
“So what we found as we’ve been growing our AR

business over the years, that people use all sorts of
accessories and fashion items to express themselves
through augmented reality. And we found that by
partnering with retailers and fashion brands, that if
we can actually use their real products in augmented
reality, it dramatically improves conversion for those
businesses, and so it can lead to higher sales.”
— EVAN SPIEGEL, SNAP CEO, Snap Q1’22 Earnings Call
Augmented reality is also being applied in stores as in-person

shopping makes a comeback. In-store AR can increase sales and
improve the customer experience of trying out clothes or beauty
products in an efficient, hygienic way.
In June 2022, Walmart acquired its virtual try-on partner Memomi,

a startup that provides a suite of AR solutions including in-store
mirrors that customers can use to try on beauty products, eyewear,
clothes, and more.

Similarly, Estée Lauder has adopted in-store AR for virtual try-on.
The beauty company saw sales increase after piloting Perfect
Corp’s try-on mirrors in a UK store. Estée Lauder now uses over
8,000 of Perfect Corp’s try-on devices across stores globally.
SOURCE: MEMOMI
Retailers outside of fashion are also adopting AR technology. In

January 2022, Avataar raised a $45M Series B from Sequoia Capital
India and Tiger Global Management to develop a platform retailers
can use to let consumers view how products like furniture will look
in their homes.
Similarly, Ikea launched an AR app where potential buyers can

imagine how Ikea décor will look in their home.

SOURCE: IKEA
Successful adoption of virtual try-ons could be a catalyst for the

emerging virtual fashion space, which refers to outfits designed for
avatars or outfits users can only “wear” via AR filters.
For example, Brand New Vision and DressX recently raised

seed rounds to support their NFT-based fashion items, while in
December 2021, Nike acquired RTFKT, a startup developing NFT
collectibles of sneakers.
All 3 of these companies offer AR filters where collectors can show

off virtual outfits, ranging from relatively regular-looking jackets to
sci-fi-inspired dresses that would be impossible to manufacture in
the physical world.

The race to dominate AR development
Companies are in fierce competition to own the underlying

infrastructure of AR development platforms that will power the
future of immersive experiences — and potentially the internet.
Just as the iPhone helped transition the internet from desktop to

mobile, AR devices like headsets and smart glasses could one day
shift the internet from mobile to wearable devices.
This is why players like Meta, Google, Qualcomm, Microsoft, and

Apple are all investing heavily to develop AR devices.
Beyond hardware, big tech players are looking to own the AR

development platforms that will power the augmented reality
experiences of the future.
Importantly, AR development platforms can fuel app ecosystem

flywheels: big tech builds dev tools to attract AR developers;
developers build apps on big tech platforms; apps attract
consumers; consumers convert into revenue; and so on.
These AR development platforms could also drive new revenue

streams. For example, they could be free to use but include paid
services for higher-quality features, or else they could charge small
fees on any profit generated by applications built on the platform.

BIG TECH GIANTS AND THEIR ASSOCIATED AR DEVELOPMENT PLATFORMS.
As a result, big tech players and startups are doubling down on AR

tools like software development kits (SDKs) in an effort to become
the go-to platform for developers.
In 2021, Apple released the 5th iteration of its AR software

development kit, ARKit 5, which includes pre-built features for
motion-tracking, facial-tracking, the ability to anchor AR to specific
locations, and more. In May 2022, Google updated its AR SDK,
ARCore, to include an API that gives access to Google Maps,
allowing developers to build location-specific apps around the world.
In addition to big tech, startups and enterprises are also developing

AR platforms to capitalize on the growing demand.

In 2021, AR unicorn Niantic announced the launch of its developer
platform, Lightship. This play could expand Niantic’s revenue
stream beyond the competitive gaming market — its 2016 release
of Pokémon GO remains its most successful product to date.
Major players in visual design software, such as Adobe, AutoDesk,

and PTC, are also building or acquiring platforms to help customers
develop AR content.
SOURCE: SNAP
So far, acquisitions have served as the backbone of big tech’s

growth strategy. This helps these companies remain competitive in
the space, even when AR talent is few and far between.

Key acquisitions in the AR developer space include:
• Snap’s 2015 acquisition of Ukraine-based Looksery laid the

foundation for its AR platform.
• Apple’s 2015 purchase of metaio, a startup developing an AR

SDK, likely helped with its rollout of ARKit.
• In January 2022, Qualcomm acquired Augmented Pixels,

a startup developing an SDK to help AR creators integrate
location data into apps.
• Qualcomm’s developer platform, Snapdragon Spaces, also

includes features from its 2021 acquisitions of Wikitude and
Clay Air.
• In March 2022, Adobe acquired no-code dev platform Brio XR,

while Niantic scooped up popular AR SDK startup 8th Wall.
The rapid consolidation in the space underscores big tech’s belief

that AR will shape the future of digital experiences. However, it
is too early to tell who will emerge as the clear winner among
development platforms, especially when startups and tech
companies alike have so far struggled with developing mainstream
AR devices and experiences.

Getting physical in the digital world
VR fitness carries the promise of a more convenient, immersive

workout. It could serve as many users’ first experience with VR
and offers particular benefits to beginners and those who face
challenges getting to the gym.
The stage has been set for VR fitness, fueled by a pandemic-led

surge in at-home fitness and an all-time high in the number of
video game players around the world. Big tech, VR startups, and
consumers are paying close attention to VR fitness’ promise to
deliver convenient, gamified workouts.
VR fitness games are currently among the most popular VR apps.

For example, Beat Saber, a VR game where players slash at blocks
to the rhythm of selected songs, has sold over 4M copies and was
the most downloaded game on PlayStation VR in 2021. Furthermore,
this virtual game is a real workout — players regularly reach similar
activity levels as a person going for a jog or playing tennis.
SOURCE: BEAT SABER

Beat Saber has generated about $180M in revenue in under 3 years.
Given the game’s success, it’s unsurprising this was Meta’s first
disclosed acquisition of a pure-play VR company since its 2014
purchase of Oculus VR. It has snapped up several other VR gaming
outfits since the Beat Saber acquisition.
In October 2021, Meta announced plans to acquire Within, the

studio behind popular VR fitness game Supernatural. However, as
of July 2022, the FTC is suing Meta to block the acquisition due to
antitrust concerns — results of the lawsuit are pending.
Similar to Beat Saber, Supernatural transports users into fully

immersive worlds where they must squat to duck through floating
rings and slash at oncoming projectiles. But Supernatural defies
the typical VR narrative when it comes to its user base: While GWI
estimates that nearly 70% of VR users are between 16 and 34 years
old, this fitness app claims about 60% of its players are over 40.
“… fitness is the killer use case for VR. It will be the

first driving force of mass adoption through a normal
consumer audience. Just as an example of what we’re
seeing from our membership base, we’re 50/50 split,
women and men, where, I think over 60 percent are
over 40. This is not what a typical VR demographic
looks like.”
— CHRIS MILK, FOUNDER AND CEO OF WITHIN

Supernatural also includes more social elements in its workouts
— a key aspect many gym-goers may miss. Friends can compete
against each other for top spots on leaderboards or take workout
classes led by Supernatural’s workout coaches or celebrities like
comedian Tiffany Haddish.
SOURCE: SUPERNATURAL
Nevertheless, VR fitness may face an uphill battle as interest in

at-home fitness wanes. Peloton has seen demand (and its stock
price) plummet from pandemic-era highs. Media mentions of
home workouts have dropped dramatically since 2020, and gyms
are reporting a resurgence in customers. In fact, a 2021 McKinsey
survey found 70% of fitness consumers report missing their gym as
much as they miss family and friends.

This doesn’t mean VR fitness is doomed. The same McKinsey
report said that 60% of Americans who exercise regularly plan
to mix working out at a gym or studio with at-home workouts.
Furthermore, VR fitness may gain traction by specifically targeting
beginners, rather than workout enthusiasts.
According to a survey conducted by UK fitness company Better,

two of the primary reasons people who want to work out avoid
gyms are lack of confidence and lack of time. VR fitness eliminates
both of these problems. Not only can people avoid the anxiety of
working out in front of strangers, but they can also work out when
it’s convenient for them without losing time on a commute or
waiting their turn on gym equipment.
While VR fitness has a long way to go, it has distinct advantages

compared to traditional workouts. VR fitness is almost always
gamified and immersive, helping consumers better engage with
workouts. It can also help people overcome barriers like gym
anxiety and lack of time or equipment.

Immersive therapy & meditation
Mental health conditions are increasing around the world.

Startups are using immersive technology to make treatment
more accessible and effective.
With 1 in 5 adults in the US experiencing a mental illness, it’s

more important than ever for people to have access to mental
health services. Unfortunately, mental health conditions globally
are increasing, and there is a severe shortage of therapists and
psychiatrists.
VR could help tackle this issue by bringing therapy into the home.
Already, VR has shown promising results by immersing users in
environments where they can practice relaxation and meditation,
use simulations as exposure therapy for conditions like PTSD and
severe anxiety, and manage chronic pain.
Early studies indicate VR meditation has a generally positive impact

on improving mood and mindfulness. Researchers at the University
of Melbourne observed the effects of a VR meditation app across
37 participants and found it significantly increased mindfulness and
“positive affect.” While the study has its drawbacks — measuring
mood and mindfulness is mostly qualitative and the sample size
was small — it sheds an optimistic light on the nascent field.
Startups are behind many of today’s VR meditation apps. For

example, Tripp allows users to select preferred auditory and visual
experiences for guided meditations to improve mood, decrease
anxiety, and induce restfulness. The early-stage company raised
$11M in June 2022 from investors including Niantic, Qualcomm,
and the Amazon Alexa Fund.

SOURCE: TRIPP
VR meditation techniques are also being explored in pain

management. In April 2021, Harvard MedTech announced that
its virtual reality platform, Vx Therapy, reduced pain levels by
an average of 40% for a group of 36 patients with chronic or
debilitating pain from workplace injuries.
Similarly, in November 2021, AppliedVR raised a $36M Series B

and received FDA approval for its VR pain management platform,
which uses meditation and relaxation as an alternative to post-op
medication such as opioids.
VR is also showing promise in treating patients with serious mental

health conditions, such as PTSD and severe anxieties.
In 2018, the Department of Defense gave a $3M grant to a

University of Central Florida program, UCF Restores, to combine
individual and group therapy with VR to treat PTSD. In May 2021,
UCF Restores reported 66% of combat veterans and 76% of first
responders it had treated since the program’s inception in 2011 no
longer met the clinical definition of PTSD. The university program is
currently in clinical trials.

More recently, virtual reality has been successful in treating
patients with severe anxiety. In April 2022, The Lancet Psychiatry
published a study conducted by Oxford University-backed Oxford
VR that used VR to simulate everyday activities, such as visiting a
store or riding public transportation, as exposure therapy for NHS
patients with debilitating agoraphobia. After 6 weeks, patients who
used VR headsets saw a 47% reduction in symptoms.
SOURCE: OXFORD VR

A mental health crisis has thrust wellness tech to the forefront.
While patients who wish to use VR still face barriers to entry — such
as the availability and cost of headsets and clinical programs — VR
is emerging as a promising treatment resource that could enable
personalized care, both remotely and in person, for a range of
health conditions.
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2022

AR/VR trends to watch

The CB Insights platform

Click here to sign up for free

Simulating workplace training 6

New reach for retail 10

The race to dominate AR development 15

Getting physical in the digital world 19

Immersive therapy & meditation 23

AR/VR TRENDS TO WATCH IN 2022 AND BEYOND 3

Augmented and virtual reality are in the limelight once again.

Interest previously spiked in 2016 — the year that Niantic released

But by the end of 2019, the novelty of consumer AR/VR had

AR/VR TRENDS TO WATCH IN 2022 AND BEYOND 4

In 2016, companies were selling a vision of what AR/VR could be.

Moreover, while AR/VR remained largely untested in 2016, recent

Advancements in the underlying infrastructure tech — such as 5G,

In this report, we identify areas where AR/VR could make a significant

AR/VR TRENDS TO WATCH IN 2022 AND BEYOND 5

Enterprises spend billions of dollars on training employees — a cost

VR training uses immersive technologies to simulate workplace

In 2019 alone, US enterprises spent $83B on employee training,

With the global pandemic accelerating career changes — up to 20%

VR training offers a promising solution. The National Training

In October 2021, Bank of America partnered with VR startup Strivr

AR/VR TRENDS TO WATCH IN 2022 AND BEYOND 6

VR startups are also designing programs to upskill and

For example, Virti trains workers for high-pressure environments

Similarly, in March 2022, Osso VR raised a $66M Series C from

Startups are also homing in on heavy industries.

AR/VR TRENDS TO WATCH IN 2022 AND BEYOND 7

Along these lines, Serious Labs teaches workers to operate heavy

SOURCE: SERIOUS LABS

In 2021, the US Army launched a virtual reality training facility that

AR/VR TRENDS TO WATCH IN 2022 AND BEYOND 8

As a result, startups like Pixo and Immerse offer custom training

At the moment, however, perfect VR training environments require

AR/VR TRENDS TO WATCH IN 2022 AND BEYOND 9

Virtual try-on companies are helping retailers gain traction in the

Virtual try-on uses a combination of computer vision and

The tech is emerging as a solution for retailers and advertisers to

An estimated two-thirds of consumers are less likely to return

AR/VR TRENDS TO WATCH IN 2022 AND BEYOND 10

Snap’s AR strategy is tightly interwoven with its plans to enable

Similarly, Meta is using AR to improve advertising conversion for

AR/VR TRENDS TO WATCH IN 2022 AND BEYOND 11

“So what we found as we’ve been growing our AR

— EVAN SPIEGEL, SNAP CEO, Snap Q1’22 Earnings Call

Augmented reality is also being applied in stores as in-person

In June 2022, Walmart acquired its virtual try-on partner Memomi,

AR/VR TRENDS TO WATCH IN 2022 AND BEYOND 12

Retailers outside of fashion are also adopting AR technology. In

Similarly, Ikea launched an AR app where potential buyers can

AR/VR TRENDS TO WATCH IN 2022 AND BEYOND 13

Successful adoption of virtual try-ons could be a catalyst for the

For example, Brand New Vision and DressX recently raised

All 3 of these companies offer AR filters where collectors can show

AR/VR TRENDS TO WATCH IN 2022 AND BEYOND 14

Companies are in fierce competition to own the underlying