What is XR, and how is it radically transforming industries?

Immersive technologies have changed how people engage with the world and with each other. Today, architects, engineers, media creators, and product designers can explore virtual environments, introduce digital content into the physical world, and experience 3D models with extended reality (XR). This is an umbrella term encompassing virtual reality (VR), augmented reality (AR), and mixed reality (MR). Together, XR technologies are transforming industries from architecture, engineering, construction, and operations (AECO) to media and entertainment (M&E), presenting new ways to collaborate, visualize, and interact with environments. 

 XR allows AECO professionals to step inside 3D models, enhancing design accuracy and exposing potential issues before they become costly. It brings virtual prototypes to life for manufacturing professionals, streamlining production and reducing errors. The media and entertainment industry harnesses XR to craft immersive stories and games that transport audiences to new worlds. Retailers are reshaping the shopping experience by letting customers virtually try on products and visualize them in real spaces. From health care breakthroughs to next-generation training and immersive education, XR is unlocking new possibilities and redefining how industries design, make, and create. 

Extended reality (XR) is an umbrella term that covers all immersive technologies, including virtual reality (VR), augmented reality (AR), and mixed reality (MR). It represents the spectrum of experiences that blend the physical and digital worlds, and its use across industries is revolutionizing how people engage with digital content. 

Virtual reality (VR) 

VR immerses users in a completely virtual environment, disconnecting them from the physical world. Headsets like the Meta Quest 3 place users in fully simulated spaces where they can explore and interact with computer-generated environments. VR has plenty of use cases in gaming, design reviews, training, and virtual tours. 

Augmented reality (AR) 

AR overlays digital content onto the real world, enhancing the user’s perception of their surroundings. Smartphones, tablets, and AR glasses allow users to see digital information superimposed on the physical world. AR is used in applications like retail (virtual try-ons), navigation, and construction, blending the real with the digital. 

Mixed reality (MR) 

MR combines elements of both VR and AR, allowing digital objects and the physical world to coexist and interact in real time. With devices like Microsoft HoloLens or the Apple Vision Pro, users can manipulate digital objects in the real world, experiencing a more integrated interaction between virtual and physical environments. MR is used in fields like architecture, engineering, and health care for collaboration, real-time simulations, and training. 

The evolution of extended reality (XR) technologies began in the 1960s with early virtual reality (VR) experiments, like Morton Heilig’s “Sensorama” and Ivan Sutherland’s first head-mounted display. Through the 1980s and 1990s, VR saw further development with devices like the VPL Data Glove and early gaming headsets, though hardware limitations prevented widespread adoption. 

In the early 2000s, augmented reality (AR) started gaining traction, driven by advancements in mobile devices. The release of Google Glass in 2013 and the global success of Pokémon GO in 2016 showcased AR’s potential for everyday use. Simultaneously, VR experienced a resurgence with the Oculus Rift, HTC Vive, and PlayStation VR, bringing immersive experiences to consumers. Mixed reality (MR) entered the scene in 2016 with the Microsoft HoloLens, blending real and digital worlds for more interactive applications. 

In the 2020s, XR technologies rapidly advanced thanks to more powerful processors, AI, and spatial computing. Devices like Meta Quest 3, Apple Vision Pro, and HoloLens 2 now offer full-color passthrough, advanced tracking, and seamless integration of virtual and real environments. These innovations drive XR adoption across industries, revolutionizing design and collaboration, and how people interact with digital and physical worlds. 

Extended reality relies on technologically advanced hardware and software to enable the interaction between digital and physical worlds. 

Hardware 

XR technology uses advanced hardware like headsets, smart glasses, and haptic devices to create immersive experiences. Headsets like the Meta Quest 3 and Apple Vision Pro feature powerful processors, high-resolution displays, and motion tracking for fully virtual environments, often using built-in cameras for inside-out tracking. Smart glasses, like Microsoft HoloLens 2, overlay digital content onto the natural world through transparent lenses, cameras, and depth sensors for interactive AR experiences. Hardware like haptic gloves and controllers provide tactile feedback, while spatial audio systems deliver 3D soundscapes, all enhancing the immersive quality of XR applications across industries. 

Software 

XR technology relies on powerful software platforms and tools to create immersive and integrated experiences. Unity and Unreal Engine are key development platforms that support real-time 3D rendering, hand tracking, and interactive content creation. Collaboration tools like Microsoft Mesh and Meta Horizon Workrooms enable virtual meetings and teamwork in immersive spaces. For AR, Google’s ARCore and Apple’s ARKit provide frameworks for overlaying digital content onto real-world environments through mobile devices. These software solutions are the foundation of XR, driving innovation across gaming, AECO, education, health care, and other industries. 

Autodesk offers XR solutions tailored to industries like AECO and product design and manufacturing (PD&M). Autodesk Workshop XR facilitates immersive design reviews so teams can interact with 3D models at a 1:1 scale in VR for improved collaboration and decision-making. Autodesk VREDsupports high-end visualization, especially in automotive design, for virtual prototypes in VR and AR. 

Some of the most promising applications of extended reality technology exist in the Design and Make industries, with their emphasis on precise visualization and coordination. 

Architecture, engineering, construction, and operations (AECO) 

XR is optimizing construction planning and design reviews in the AECO industry. Solutions like Autodesk Workshop XR allow teams to step into 3D models at a 1:1 scale, identifying issues early and making better design decisions. XR also enhances construction planning by visualizing the process in virtual environments, improving coordination, and reducing costly errors during construction. 

Product design and manufacturing (PD&M) 

In the PD&M industry, XR accelerates prototyping and optimizes assembly and maintenance. Virtual prototypes reduce the need for physical models, speeding up product development. XR also overlays digital instructions onto real-world machinery, precisely guiding workers through complex tasks, minimizing errors, and reducing downtime. 

Media and entertainment (M&E) 

XR is driving media and entertainment forward, creating immersive experiences in gaming, storytelling, and live events. Virtual and mixed reality allows audiences to explore rich, interactive environments and engage with digital characters in real time, offering new creative possibilities and deeper engagement. 

XR can enhance design accuracy and creativity by allowing professionals to visualize and interact with 3D models in immersive environments. Designers and engineers can explore complex structures at a 1:1 scale, providing a more precise understanding of spatial relationships and design elements that are often difficult to capture on traditional screens. Real-time feedback in XR environments allows for immediate adjustments and iteration, fostering creativity and innovation. This ability to experiment and refine designs in a virtual space can lead to more efficient workflows and fewer costly revisions during the physical production or construction phase. 

XR also facilitates seamless remote collaboration, allowing teams to work together in virtual environments from different locations. This is especially valuable in globalized industries where team members are spread across various regions. Professionals can meet in shared virtual spaces, discuss projects in real time, and make informed decisions together without traveling. XR’simmersive training environments also offer safe, realistic simulations, helping workers practice complex tasks and scenarios without risk. This leads to improved safety, greater efficiency, and better preparedness in high-risk industries like construction, manufacturing, and health care. 

Fortune Business Insights projects that the global extended reality (XR) market will grow from $183.96 billion in 2024 to $1,706.96 billion by 2032, with a compound annual growth rate (CAGR) of 32.1%, highlighting the transformative impact XR technologies like VR and AR will have on the global economy.  

Continuous innovation will fuel this projected economic climb, driven by advancements in AI and machine learning, hardware, and cloud computing. Imagine XR environments that adapt to your needs, anticipate your actions, and provide real-time insights to fuel your creativity and decision making. Picture lightweight, powerful headsets offering immersive experiences with seamless interaction between the physical and digital worlds. Imagine cloud-computing-enabled complex simulations and real-time collaboration across vast distances without expensive local hardware. These advancements can bring XR to the forefront, making it more accessible, versatile, and seamlessly integrated into professional workflows, increasing its impact across industries. 

Embracing XR does come with challenges, but recent advancements have made the technology more accessible than ever. With devices like the Meta Quest 3 now priced under $500, XR hardware is increasingly affordable for businesses of all sizes. However, the learning curve associated with XR tools and some reluctance to depart from traditional workflows threatens to impede progress. To realize the potential of XR, companies must invest in training and technology. It’s also important to strike a balance between innovation and user rights, particularly when it comes to data privacy and ethical use. As XR revolutionizes industries, ensuring responsible adoption and safeguarding user interests will be vital to its ascent. 

XR can help professionals unlock new levels of creativity, collaboration, training, and problem solving. To harness its full potential, businesses must embrace change, adapt to evolving tools, and be ready to lead in this new era of digital transformation. Those who embrace XR today will reshape their industries and also help define the future of design, making, and collaboration as the boundaries between physical and digital worlds continue to blur. 

This article has been updated. It originally published April 2022. Jeff Link contributed.