Welcome to Extended Reality, the next frontier in the entertainment industry

xr and the entertainment industry

Remember the time a lawyer sitting in a virtual court via Zoom mistakenly appeared on screen with a cat face filter on? Or, the Pokémon Go phenomenon that had youngsters and adults alike chasing digital characters within their homes and outdoors? Or, the latest emergence of the Metaverse wherein your avatar can attend concerts, try real-time fitting while shopping from the comfort of your couch, and so much more? Immersive technologies are taking over the 2D screen-dependent experiences. The use of augmented reality, virtual reality, and mixed reality can help companies indulge consumers better than ever before. Extended Reality (XR) is a conglomeration of these three technologies. It impacts multiple industries, and the entertainment industry is surely catching on to its many benefits.

The goal of extended reality devices is to deliver immersive experiences that merge digital objects, information, and overlays into everyday life. Eventually, the digital and physical worlds will be indistinguishable from one another due to spatial sound and haptics. XR is expected to spread its wings in 2022 with several factors paving the way for the same, such as 5G implementations and adoption, availability of capable hardware at an affordable price, and maturity of the technology itself.

xr and entertainment industry chart 1 - ar/vr global market size
Source: Netscribes

One of the front-runners in the adoption of XR is the entertainment industry that will take advantage of XR and fuel its popularity in the years to come. Listed below are the upcoming trends in industry segments that display considerable interest in XR and developments on the application front.

Leveling up: XR in gaming

xr in gaming

1. VR add-on for regular games: Platform owners will push and reward popular game franchises to have a VR component. Such components can be a part of the regular game or be used as an add-on. Furthermore, the addition can be free or paid. This will depend on the development costs.

2. Movie tie-ins: Platform owners and game studios are likely to develop more XR experiences where gamers can take on the role of a major role in movies. The benefit? While the movie benefits from the promotion, the platforms and game studios can reach out to a wider audience.

Up close: XR in sports

xr in sports

1. Live Sports VR Broadcasting: VR is being used to give fans the ability to watch live sports with the ability to choose viewing perspective and see it up close. The viewer can virtually sit in the seats of their favorite stadiums with this immersive experience. XR can further give the fans the ability to see data and analytic representation of the ongoing or past games as and when they want to.

2. Participative activities via AR/VR: In 2022 and beyond, fans and users will utilize AR/VR services that allow them to participate in sports and fitness activities virtually, putting them in the middle of a stadium or gym. 

3. There will be more adoption of XR for experiences such as a movie or video immersion, and immersive travel experiences. Real-life games such as escape rooms, airsoft, paintball, and LARP (Live action role-playing) games will become virtually accessible. But, the most significant push will come from big technology giants. These companies will progressively provide all entertainment services under one umbrella of Metaverse.

Virtually social: XR in Metaverse

xr in metaverse

In early 2014, Meta (formerly, Facebook) announced that it was acquiring a virtual reality headset maker, Oculus, for USD 2 billion. It was a surprising move at that time for a social media company. Around the same time, the company also acquired the popular messaging app WhatsApp, for USD 19 billion. The numbers of acquisitions are plentiful, and it indicates Meta’s long-brewing plan towards the direction of Metaverse.

Metaverse can be described as the evolving amalgamation of digital technologies encompassing the internet, social media, digital gaming, AR, VR, and digital currencies. One can think of it as the next stage of how people will consume different forms of media and communicate in a more interactive and immersive manner. XR will play a major role to achieve this vision. Metaverse will put the user in the middle of a simulation where they can learn, spectate, interact, create, contribute, and ideate. XR will boost entertainment industry’s growth in a virtual setting. 

Companies across digital media have always tried to achieve cross-functional integration of different services. If an ecosystem can be created for users to find everything they are looking for, the possibilities will be endless.

Read more: Into the Metaverse: A trend or a revolution?

The road ahead for XR and the entertainment industry

Adoption of XR is still largely limited to the matured markets. Additionally, XR experiences are dependent on the availability and the credibility of the hardware. A lot of capable phones with raw processing power and relevant sensors are available globally at somewhat reasonable prices. The same, however, is not true for other hardware components of XR. These include VR headsets, hand controllers, high-resolution immersive displays (OLED and mini-LED), and 360-degree surround sound systems. 

The average consumer would think twice before graduating to XR experiences considering the cost. However, with better pricing, the adoption of AR/VR headsets will see significant growth in the coming years. Furthermore, subscription-based XR services can be a great boost to the XR adoption. The hardware can be bundled along with the service for a monthly or quarterly commitment from the user.

xr and entertainment industry chart 2 - ar/vr headset contribution
Source: Netscribes

Content maturity of XR is not as huge a challenge as the size of the audience base is. For instance, the latest ‘The Matrix Awakens’ interactive experience showed up on the next-gen consoles – PlayStation 5 and Xbox Series X/S. While it is merely an Unreal Engine 5 technology demo, it promises so much more. Imagine the same experience enabled by XR. The question arises: To what extent are these digital contents accessible to consumers?

We have seen video games that felt like movies. Prominent streaming platforms have produced shows that gave viewers the option to choose the storyline as it runs. We have also witnessed high-fidelity music in a surround sound environment that virtually puts you in the middle of a concert or a studio. The merging of boundaries indicates the importance of interactive and immersive entertainment going forward. Nothing is positioned better than XR to take the entertainment to the next level.


In 2022 and beyond, XR will amplify the environment with sight, sound, touch, feel, and more. Moreover, the maturity of AR/VR hardware and software will determine the depth of reality for the users experiencing the simulated environment.

Are you ready to explore the many opportunities for your business in today’s digital-first economy? Before you take to the emergence of XR, consider diving deeper into the research and conversation surrounding the latest technology innovations. With Netscribes’ technology and innovation research solutions, you can stay prepared for the next wave of technology requirements and the business landscape. To learn more, get in touch with us.

Analysis by Soumyadeep Roy Chowdhury, Market Intelligence Manager (Technology and Business Insights), Netscribes.

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