The extended reality (XR) industry, consisting of virtual reality (VR), augmented reality (AR), and mixed reality (MR), is showing signs of revival. After the 'metaverse bubble' burst following the COVID-19 pandemic, the market, which had been stagnant for a period of time, is recently being reframed as a next-generation platform with concrete demand for AI, smart glasses, and industrial simulation.
At the center of this is Meta (formerly Facebook). Despite excessive expectations and criticism regarding the metaverse in the past, Meta has maintained its integration strategy of artificial intelligence (AI) and XR, and recently, the results have led to concrete achievements, increasing market interest.
VR is a technology that completely immerses users in a virtual environment, disconnecting them from the real world, primarily experienced through wearing headsets in 3D virtual spaces. AR overlays digital information onto the real world, focusing on enhancing information by interacting with reality through devices like smartphones or glasses. MR allows virtual objects and the real world to interact in real time, enabling users to perceive both worlds simultaneously and to position virtual objects naturally in the real environment. Smart glasses primarily provide an experience that combines reality and the virtual world, equipped with AR and MR functionalities.
According to market research firm Mordor Intelligence, the global XR (hardware, software, services) technology market is projected to grow from $7.55 billion (approximately 10.5775 trillion won) in 2025 to $44.14 billion (approximately 61.8401 trillion won) by 2030, with an annual growth rate of 42.36%. Particularly, AR technology accounted for 43.2% of the total market as of 2024 and is expected to expand at a similar pace in the future. XR is rapidly expanding beyond gaming and entertainment into various industries such as healthcare, manufacturing, education, and defense. Once subjected to exaggerated expectations in a discourse devoid of tangible metaverse, it is now establishing itself as a practical technology combined with AI, driving demand focused on real-world applications.
Market research firm Omdia recently predicted that annual sales of XR devices will reach 61.5 million units by 2035 and exceed 200 million units by 2045. Particularly, MR glasses, which are expected to be commercially available starting in 2032, are analyzed to likely become the most pivotal device in the XR market. Smart glasses equipped with AI functionalities are garnering attention as potential replacements for smartphones and are expected to rapidly spread by the early 2030s.
In this changing environment, Meta is making the most aggressive investments in the XR market among global big tech corporations. According to its second-quarter earnings report, Meta recorded a revenue of $47.52 billion (66.566 trillion won) and a net income of $18.34 billion (25.6906 trillion won), representing increases of 21.6% and 18% respectively compared to the previous year. AI, which underpins Meta's advertising revenue, is explained by the company as one of the execution devices among XR. At the same time, the Reality Labs institutional sector, responsible for developing AR/VR devices, reported a quarterly loss of $4.53 billion, but Meta has defined this sector as a 'long-term core business.'
Andrew Bosworth, Meta's Chief Technology Officer (CTO), said at the Bloomberg Tech Summit in June, 'This year will be a turning point for the AR and VR market,' noting that 'AI smart glasses are products that leave a strong impression on both consumers and competitors.' He added that 'by the end of the year, the results of strategic execution will become visible, and in five years, their value will be proven.'
Meta's XR strategy is focused on integration with AI. Mark Zuckerberg, Chief Executive Officer (CEO) of Meta, announced plans for constructing large AI data centers 'Hyperion (5GW)' and 'Prometheus (1GW)' in June, and has brought in Alexander Wang, founder of Scale AI, to establish the 'Meta Super Intelligence Lab' for developing Artificial General Intelligence (AGI). This organization combines FAIR, the Llama model team, and product organizations, with many talents from OpenAI and DeepMind joining. The goal is to simultaneously advance AI-based platforms and XR devices.
Meta is strengthening its smart glasses strategy by acquiring a 3% equity stake in EssilorLuxottica, which owns eyewear brands such as Ray-Ban and Oakley. The company's Ray-Ban smart glasses have sold over 2 million units within a year of its release, establishing a presence in the consumer market, and recently, AI smart glasses based on the Oakley brand were unveiled. In September of last year, a prototype called 'O-Ryan' equipped with 3D projection micro lenses was also introduced. Meta defines these wearable devices not just as simple mobile substitutes but as 'the gateway to realizing the metaverse.'
In fact, Meta's metaverse platform 'Horizon Worlds' is evolving into a structure that combines AI avatars, generative chatbots, and the creator economy. Users enter this space through smart glasses and XR devices, while generative AI automates everything from videos, images, conversations, to product curation. Creators operate their own spaces, generating revenue, while AI manages these spaces. Ultimately, Meta aims to establish a 'digital economy ecosystem' where digital humans, digital spaces, and digital assets interact.
Meta's strategy is drawing responses from the market. The company's stock price surged over 11% in after-hours trading immediately following the earnings announcement on the 31st of last month (local time). Meta has also raised its capital expenditure guidance this year, adjusting the lower end from $64 billion-$72 billion to $66 billion-$72 billion. This is interpreted as a reflection of confidence in the AI infrastructure that drives advertising revenue and the smart device ecosystem.
Zuckerberg, the CEO, forecasted through the company's official blog on the 31st of last month (local time) that smart glasses will replace smartphones as personal computing devices in the era of AI superintelligence. He stated, 'Comparing our situation to 200 years ago, when 90% of people were engaged in agriculture for survival, technological advancements have gradually liberated us from the shackles of survival,' adding that 'personalized superintelligence will become the most useful tool to help us understand and achieve our goals.' He continued, 'The next five years will be a crucial period for determining the direction of AI technology, deciding whether it will be a tool to enhance individual capabilities or a means of societal replacement.'