The overlap between extended reality and entertainment is about to get supersized. How supersized? Well, let’s look at some indicative statistics: The Oculus Quest VR gaming headset supposedly shipped 20 million units in 2023.

The VR gaming overall market size is valued at USD 11.31 billion and is projected to grow at a CAGR of nearly 5%. This means that it is set to boom from USD 11.84 Billion in 2024 to USD 17.1 billion by 2032.

Child’s play or not, VR gaming is the leader in the space where extended reality (the umbrella term for augmented reality, virtual reality, mixed reality, and everything in between) and entertainment overlap.

But other areas of XR-meets-entertainment-space are just as interesting. In this blog, we’ll look at how various components of these genres within the XR meet entertainment space and offer tools, ideas, and learnings for brands. If you’re a marketer looking to take cues from how AR and VR are used in entertainment, this blog is sure to get your imagination running.

But first, let’s look at the grand scale at which AR and VR are transforming entertainment.

The exciting XR-meets-entertainment space

Extended Reality (XR), encompassing VR and AR in entertainment, is changing the face of the entertainment landscape.

One standout effect of AR in entertainment is the rise of AR filters. Meta-owned SparkAR, for instance, reports that over 600 million people use AR effects on Facebook and Instagram monthly. They report that their platform hosts over 400,000 creators from 190 countries, who have published over 1.2 million AR effects, with some generating over a billion views each. As most of you will agree, in social media marketing, views are gold, translating directly into ROI.

Image courtesy: Snapchat

Snapchat also reported significant engagement with AR filters, with over a third of its users enthusiastically interacting with them. In March 2024, Snapchat also began allowing advertisers to create branded AR filters, attracting brands like Disney, PepsiCo, and Swiggy.

Factoring in all this and more, Statista’s predicts that the AR advertising space will grow at a CAGR of 9.73% from 2024 to 2028, reaching a market volume of USD 7.5 billion. Another exciting development is the global virtual film production market, valued at USD 2.98 billion in 2023 and projected to grow to USD 9.62 billion by 2032.

This growth is by no means coincidental. It is a clear indication that XR has been able to seamlessly integrate the physical and digital realms, something previously seen only in sci-fi authors’ fantasies. The use of AR and VR technologies in entertainment is not only restricted to the final output provided to the audience but also inherently modifies the approach to influential advertising. The companies that have taken this route are already experiencing huge benefits, which in and of itself is a testament to the integration of XR with the entertainment space.

What marketers can take from gaming-based VR entertainment tools?

The rapid growth of XR technology isn’t just shaking up entertainment; it’s also giving marketers some amazing new tools to create immersive experiences. VR gaming tech, in particular, is often harnessed in immersive marketing. Today’s advanced VR gaming headsets, for example, let brands showcase remote places, products, and production facilities in stunning detail. Picture taking customers on a virtual tour of a sustainable factory, showing off eco-friendly production methods engagingly.

Then, there are full-body haptic suits and gloves, adding a whole new immersion level to VR entertainment and marketing. Imagine customers feeling the texture of luxury fabrics or testing out a high-end mattress through VR.

Omnidirectional treadmills take things even further, perfect for simulating experiences like bungee jumping or deep-sea diving. Disney’s “HoloTile Floor,” the world’s first multi-person omnidirectional treadmill, could be an absolute game changer in immersive marketing for experiential products. This XR tech allows multiple users to share a virtual environment. It’s easy to imagine how Disney (and even other brands) might harness this tech to extend theme parks into the virtual world, enhance movie experiences, or create unique marketing campaigns.

Several brands have already successfully leveraged VR in entertainment to create unique marketing experiences.

For instance, Red Bull’s Air Race VR experience mixes the brand’s high-energy feel with virtual reality immersion to offer users good doses of adrenaline. Likewise, North Face transported users to the stunning heights of Yosemite’s El Capitan through their VR climbing experience, which aligned completely with the brand’s personality and character. Mind you – these are just two of the many successful and innovative VR marketing campaigns that have been carried out!

What marketers can take from filter-based augmented reality in entertainment?

Advances in filter-based AR in entertainment, which we discussed earlier in this blog, provide a rich playing ground for marketers to improve their processes. Many social networks have their own AR software development kits (SDKs) for AR filter development. This makes it easy for brands to develop content and get it out there with minimum time and capital costs.

As an example of entertainment AR being channeled into marketing, consider Facebook and Instagram’s Spark AR Studio along with Snapchat’s Lens Studio. These platforms allow anyone to make their own AR filter. Of course, if you want to invest and level up your AR filter campaign, there are specialized studios that specialize in creating AR filters for brands. These studios empower brands to conduct campaigns related to AR on social media platforms.

Evidently, AR advertising has a lot for marketers. If you have yet to pay attention to how brands use AR filters, now’s the time to start. Check out successful campaigns from companies like Pepsi and Mondelez and focus on metrics like views and ROI. Once you’ve gathered enough insights, you can launch your own AR campaign.

Infusing AR filters into marketing can be particularly beneficial for go-to-market initiatives, sales events, brand milestones, and even marketing activities like contests and polls. This way, you get to boost user engagement and provide creative ways to bond with your audience in an ever-evolving digital landscape.

What Marketers Can Learn from XR in Film Production and Promotion

Continuing from the exciting uses of AR and VR in entertainment within gaming and social media, the film industry offers even more innovative ideas for advertisers. Recent movies have leveraged VR and AR to create immersive experiences during both production and promotion. For instance, the Golden Globe-winning and Oscar-nominated film “Poor Things” utilized virtual production technology, pushing the boundaries of filmmaking.

Similarly, the popular film “Dune” ushered in a new era for AR in entertainment with promotion. They created a cross-platform avatar experience, allowing users to design their own 3D Dune avatars. This unique campaign involved big names–collaborators included Aircards, Yahoo Creative Studios, Ready Player Me, and Ringtail Studios, powered by 8th Wall.

You can find ways to customize these ideas to your context. For example, companies with well-loved mascots could develop avatars based on them, enhancing user involvement. Imagine McDonald’s inviting people to create Ronald McDonald-inspired avatars or an adventure sports brand launching a “Create Your Own Tribe” campaign.

Don’t be afraid to reimagine things when you’re harnessing AR and VR entertainment tools for marketing! A good example of no-holds-barred film meets VR promotion is credited to Lexus. They turned what might have been a typical car launch for the Lexus RX into what many refer to as a “theatrical spectacle”. Media and other invitees were geared with Oculus Rift headsets (remember what we said about gaming tech being used in marketing earlier?), and they became part of a “bustling film set, thrust into the limelight alongside acclaimed actor Jude Law.” You can see how they went about it in this video.

Conclusion: The lines between marketing and entertainment are blurring…

The lessons gleaned from these advancements are clear. Marketers must embrace immersive technologies’ potential to captivate audiences, forge meaningful connections, and stay ahead in an ever-evolving digital landscape. The future of entertainment lies in the seamless integration of virtual and augmented reality entertainment experiences into marketing, and those who harness its power will undoubtedly lead the way in tomorrow’s marketing landscape.

Looking for ways to customize one of the above XR-meets-entertainment ideas for your business? Talk to us; we’ve helped countless brands contextualize AR and VR tech, tools and experiences out there to work wonders in their products and solutions, sectors, and audiences.