The Extended Reality check

The XR industry is booming, right? Well…not quite.

Beneath the buzz of conferences, PR and product launches lies a sobering truth: 2024 has been a grind for most of us in the XR industry. Let’s talk about what’s really happening — and what 2025 holds.

2024 in Review

If you went to any of the myriad of global conferences in 2024 around XR and AI you’d be totally forgiven for thinking the industry is in rude health. But that belies a more sober reality below the surface of all the great strides in product advances and capabilities.

The dirty secret is that despite amazing products and people working hard to further the XR industry and the case for immersive technologies there’s not a lot of recurring revenue in it and current trading is hard yards. Sure you can pick up one-off projects here and there (but even they aren’t what they used to be) and the order of the day is staying on the pitch and relevant for a perceived high-margin future.

But that’s just not there yet. No one is getting rich quick here despite considerable investment. Let’s be frank, 2024 was another brutal year for most people on a purely commercial basis.

Opportunities for 2025

So what’s coming in 2025 to try and raise the spirits?

Well, consolidation basically. There are some truly brilliant small-to-medium size companies out there who are revenue generating and close to or marginally in profit. But they’re not going to scale on their own and the ongoing investment required is going to be hard to service as capital becomes harder to come by and more expensive in the current climate.

Where’s the light? In our tiny XR world the reinvention of the web with Web 3D and new tooling to support more immersive, interactive experiences across devices provides a much broader use case for business beyond just AR or VR.

In an age of greater personalisation and growing "premiumisation" these new tools provide new ways to deliver greater customer experiences driving engagement, consideration and sell-through. These tools are getting faster, more efficient and effective, opening up their benefits to more brands and businesses. It’s putting the power (and the data) in the hands of individuals and away from big corporates.

The Immersive Web: The Home of XR & 3D

And at the heart of this reinvention is the humble web browser, which is rapidly becoming the central home for XR experiences. With advances in WebXR and WebGL, alongside greater device compatibility and performance improvements, we’re seeing the immersive web step up as the most accessible, scalable platform for creators and brands alike.

No app downloads, or submissions — just the power and flexibility of the web at your fingertips. This shift doesn’t just lower barriers to entry, but also unlocks truly cross-platform experiences that work across desktop, smartphones, tablets, headsets, and more. It’s the ultimate equaliser, and it’s driving the next wave of immersive experiences creating new rich media opportunities for any website.?

Oh, and add in a sprinkle of AI here for hyper personalised qualification and assistance and we get to the next generation of the web and e-commerce.?

Legislative Drivers of Digital Transformation

Legislative change (Like the Digital Product Passport Act in the EU and the EU Accessibility Act) and changes to global standards (like GS1 Digital Links) are also offering opportunities for digital transformation to take hold and stick. Nothing breeds action in business than legislature. Which in turn breeds opportunity. This is coming around connected packaging and new retail experiences both on and offline that change the direction of the industry forever.?

The Middle East: A Rising Market for Innovation

You might also want to consider heading to the Middle East. Different legislation there and a massive investment in all things Metaverse are creating a market literally out of the desert. A few smart companies like Landvault (now iR Enterprise) saw this opportunity early and have put in considerable time on the ground to understand the market and build the relationships required to create foundational and scalable business for the future.?

The billion dollars bets made and indeed required by Meta, Apple, Google, Microsoft and more on the movement from handsets to headsets as the form factor of the future creates opportunity. These companies can afford to take billion dollar hits to create the market. Like the remora, as small tech businesses we need to follow and service these whales (and in some cases sharks) with the add-on features and content that ultimately produces the flywheel for this new ecosystem. But this is going to take time.

What does this all mean?

We get fooled into thinking that the simple tick of a man-made clock as we pass from one Roman calendar year to the next can produce a reset and change our fortunes. This is definitely some sort of alternate reality.

The fact is that 2025 is a continuation of a very long journey for extended reality that is becoming incrementally bigger and more exciting but it is still going to take time. Everyone is grappling to find the right product-market fit and a willing audience that sees the opportunity and has the budget to put against it to architect for it and create the platform for the future to accelerate their business needs and build a competitive advantage. The intent is there but the action is often lacking.

So it’s going to be another gradual year in my view rather than a breakthrough one. Sorry if that means you’re going to take more of that hope value out of your FY26 forecast! I wish the entire industry godspeed for 2025. We’re all part of this journey to bring XR to its full potential.

This really does take a village.

Zappar’s Approach

For our part at Zappar, we’re investing in a few lanes.?

With Mattercraft we continue to build the best tools for creating expressive and immersive content for the 3D web in a way that is fast, efficient, affordable and works seamlessly across devices. Think Unity for the web or Flash for the modern age. We’re opening up these tools and commercial opportunities to all creators and brands like never before.

With Zapvision, our proprietary D3, dense codes and Accessible QR codes we’re supporting the CPG and retail industries to create a new standard for accessibility and making access to information a basic human right whatever your visual acuity. We’re building on and supporting global GS1 digital link standards and levelling the playing field for society.

And with Zapbox we’re helping democratise XR and bring the concept of content delivery through headsets to the mass market with a high quality video pass through experience for under $100 that can be instantly accessed through the 800m+ iPhone 11s or later already in peoples pockets.

Wrapping Up

2025 won’t be an overnight transformation, but we’re getting closer. The web is becoming the ultimate platform for XR, and new tools are making immersive tech accessible to more people than ever.? It was always going to be a marathon and not a sprint.?

At Zappar we continue our mission to enhance the human experience and help transform lives through our pioneering technology, tools and services.

2025 will be no different. Keep running!

What’s your take on the future of XR? Let’s start a conversation. Share your thoughts in the comments or reach out to see how Zappar can help your business get ahead in 2025.?