Top 10 XR Technology Trends in 2023

9 min read December 29, 2022

Authors: Alex Dzyuba, Lucid Reality Labs Founder & CEO

The past few years have brought us rapid advancement and implementation of XR technology for business and consumer use. The acceleration in the adaptation triggered by the global pandemic is gradually moving toward a commodity, with immersive technology market projections to grow as far as US$ 2.6 trillion by 2031.

Today, companies are already investing in XR technology as part of their technological transformation strategy, which is no surprise, as immersive technology can enhance countless processes, including planning and production, safety and scenario, education and training, visualization, and customer journey. Wrapping up another great year of technological advancement, we decided to look at what lies ahead of us, addressing some significant XR trends in 2023.

1. Metaverse XR Trend

It’s no surprise that the 2023 XR Trends will include the Metaverse with many global companies like Microsoft and its acquisition of Activision Blizzard, Nvidia and its Omniverse expansions, Qualcomm and its Snapdragon Metaverse Fund, and many more. All these global players are already investing billions into Metaverse’s building blocks – the hardware, software, and infrastructure. While we understand that there are quite a few challenges we will need to solve first and that the Metaverse as a comprehensive concept has a long way to reach maturity, today, the building blocks are already starting to shape. The Metaverse, or Web 3.0, is predicted to accelerate in 2023. Even though pragmatic evaluations indicate a chillier phase due to the shift in the Metaverse focus, in 2023, more resources will be allocated toward laying the Metaverse fundamentals of standards and infrastructure. The number of Metaverse XR experiences will be accelerating while continuing its movement toward realizing the concept of ultimately becoming one decentralized, scalable, and autonomous virtual universe, the Web 3.0 of mass adaptation. Thus making Metaverse one of the key 2023 XR trends.

2. Digital Twins XR Trend

Deloitte has predicted the digital twin market to accelerate to $16 billion by 2023, with various entities represented as digital twins. It is no surprise that digital twins will be a significant trend in XR technology. As XR is becoming more commonly used, the demand for the level of realism undoubtedly requires developers around the globe to create more complex environments, experiences, and interactions. Businesses and consumers expect to see these digitally created environments, objects, or assets as close to real-life depictions, including visual fidelity, interaction, ergonomics, and function. As it is no longer enough to build experiences that resemble real life, we will see more digital twins appearing in the XR experiences of 2023. The vast digital twin adaptation will make digital environments more complex while enhancing realism and degree of immersion. While we can say that digital twins’ XR technology trends are driven by business and consumer demand, they still rely heavily on XR hardware technology trends and the generally accelerating XR device capabilities.

3. Photorealistic XR Trend

The advancement of XR hardware capabilities and software, along with development skills, allows the creation of photorealistic XR experiences. We already have software tools like NVIDIA Holodeck, Unreal Studio, and Trezi and hardware like Varjo XR-3 that enable us to come closer to building photorealistic experiences. As users gradually grow in their expectations for visual fidelity, 2023 will be no exception for XR. The need for photorealistic experiences will push the hardware and software producers to advance their technology and provide more tools for the global developer community. We are ultimately moving in the direction where the visual quality, including texture, lighting, and depth perception in XR experiences, would be indistinct from the real-life counterparts, including objects, environments, or even persons. Taking XR technology to a completely different level of visual fidelity.

4. Hyper-Realistic Avatars XR Trend

Staying connected and feeling present has been a topic of paramount importance in the past couple of years. As millions worldwide were forced to switch to being online, people experienced the feeling of being disconnected. The World Health Organization (WHO) 2022 report indicated a tremendous 25% growth in anxiety and depression caused primarily by social isolation. Even though moving interactions online has helped us stay connected, we faced a challenge with feeling present while interacting with others. Thus, it has become essential for the XR in-experience characters, both user avatars and artificial so-called non-playable characters (NPCs), to start moving in the visual direction of real-human counterparts. Including complexion, emotions, and responses, calling for creating hyper-realistic avatars. That said, the hyper-realistic avatar market is estimated to hit over $528 Billion in 2030 and will continue its advancement in 2023 due to the growing demand for photorealistic XR experiences. As 3D modeling and animation technology continue developing, 2023 will see an even vast need for in-XR digital humans, ultimately heading in the direction of these artificially created beings to become indistinctive from real-life counterparts. The XR 2023 is bound to see many more advancements in and with Hyper-Realistic Avatar implementation.

5. XR Holoportation

Another exciting trend would be the use of XR holoportation; the trend XR industry experts began referring to more frequently In 2022. The concept of holoportation itself is an exciting topic. In contrast, XR holoportation incorporates real-time 3D capture and visual data transfer with preserved properties from one location to another through a head-worn immersive device. It can be used to holographically teleport a digital double of a person, item, or asset. Even though holoportation is already explored outside of XR devices, with Proto Inc., the producer of holographic displays, named the CES® 2023 Innovation Awards Honoree ahead of the event, XR has its parallel technology development. The holoportation in XR continued to be researched by Microsoft in their Holoportation™ project dedicated to 3D capture and transmission through the HoloLens capabilities. The concept of XR holoportation will continue growing in 2023, opening new horizons for many industries in terms of education, interaction, collaboration, and being physically present.

6. XR Immersive Training

Since the global pandemic, companies have started looking into possibilities of incorporating technology to enhance their training capabilities. At first, it began as a great necessity caused by the traveling and in-person interaction restrictions. Companies began turning to XR for numerous reasons, including cost reduction, process optimization, and risk-free training settings. Immersive XR training will continue growing in implementation in 2023, enhanced by XR headsets’ capabilities and a relatively complex entry barrier for vaster adaptation. We will see more immersive training developed outside of industries like Healthcare, Aerospace, Manufacturing, and Education, where they have already proven to be the go-to tools for specialists around the globe. VR in education alone is estimated to reach $32.9 Billion by 2026. In 2023, we will see more immersive XR experiences, or even XR reality, that will facilitate workplace training, provide a possibility for remote education, incorporate real-world simulations, and help with skill development, information comprehension, and retention.

7. AI Incorporation Into XR

The topic of AI incorporation into XR experiences has already been brought to the table. The demand for advanced XR technology capabilities to make them more intuitive from the perspective of user interactions and experiences has led developers to turn to AI. Even though Artificial Intelligence (AI) is in a conceptually different technological segment, its incorporation will help advance XR experiences to an entirely new level of interactions and benefit further AI development. The benefits include AI-enhanced user interaction and communication, the opportunity to grow AI through training with XR in-experience data, conferring intelligence of XR through AI-captured data, interpreting XR-generated data via AI capabilities, and much more. AI would help make XR environments and experiences more scalable, especially in education and skills learning, where AI would assist XR and vice versa. Even though we have a long way to go before full AI into XR experiences integration, we are bound to see an advancement in this direction in 2023. We, however, have already reached the point where the next level of complexity in XR experiences will begin growing in demand. This makes us wonder what level XR 2023 can move to with AI enhancement.

8. XR Ecosystems

While XR is developing in numerous directions, XR ecosystems are becoming one of the fields for expansion, with Microsoft, Apple, Meta, and other tech giants already investing extensively in building comprehensive XR ecosystems. This includes purchasing software and hardware components and other XR technology companies to create close-looped in-house XR experiences where the immersive device, including the hardware components, the development tools, the content, and the applications, are fulfilled by one provider. We are bound to see more tech giants expanding and building their own XR ecosystems in 2023, acquiring or partnering with growing tech companies and thus bringing new capabilities into their XR ecosystems. As more XR ecosystems begin to shape, we can expect heated competition for the shares of the ever-growing immersive technology market and millions of users worldwide.

9. Haptic Technology

Even though today’s haptics still need to grow to be on par with expectations, we have witnessed rapid technological advancement over the past few years, making it one of the XR technology trends in 2023. Haptics is one of those technologies expected to accelerate XR advancement and grow in adaptation in 2023. The main reason is that the technology allows replicating the sense of touch, one of the final pieces in making XR experiences genuinely immersive. Incorporating haptics into XR will be one of the growing trends, providing more comprehensive virtual interactions for industries including Healthcare, MedTech, Aerospace, Engineering, Manufacturing, and more.

10. Cloud XR Trend

The level of visual fidelity is an exponential part of an XR experience and can be one of the critical factors impacting the user’s sense of immersion. With the growing capabilities of the XR software and hardware, we came to a point where developers build sophisticated, high-complexity experiences. As the next iteration of the internet, Web 3.0 implies a multi-device seamless connection capability. The developers can run into the challenge of being able to stream their demanding XR architecture to devices with less technical capabilities. Thus, the trend emerging for streaming graphic intense XR is the possibility of using Cloud servers to stream high-fidelity untethered XR Device Experience by utilizing flexible high-performance Clouds.

XR Trends Conclusion

Even a year ago, immersive technology was on entirely different capabilities, visual fidelity, and functionality levels. Going further, XR will only grow to become practically indistinguishable from real-life interaction. The 2023 XR is nowhere close to where it was even a year ago. With the growing adaptation of XR trends by industries worldwide, we can expect even more exciting new experiences and real showcases to appear globally in 2023.

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