Augmented Reality (AR) and Virtual Reality (VR) technologies offer users a way to immerse themselves in digital content. Unlike traditional two-dimensional displays such as monitors and smartphones, AR/VR devices create experiences that blend the digital world with the physical environment. 1
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Optics are the foundation of AR/VR devices, enabling realistic user experiences through advanced lenses, displays, and imaging systems. In AR, optical systems such as waveguides and light guides superimpose digital content onto the physical environment. This integration of virtual and real-world elements can be seen in devices such as Microsoft’s HoloLens 2 and Magic Leap 2.2.
VR systems use near-eye displays (NEDs) that isolate the user from external light sources. Recent innovations, including pancake optics, enable high-resolution visuals while maintaining a compact form factor. These optical systems address important challenges in the field, such as vergence accommodation conflict (VAC) and tradeoffs between field of view and eyebox size. 2
Augmented Reality and VR Virtual Reality: Explaining AR and VR for Beginnersplay
market trends
The AR/VR market is experiencing rapid growth due to increasing consumer demand, advancements in gaming, and expansion of enterprise applications. According to industry reports, revenue from AR/VR technology has soared to $27 billion and is expected to exceed $209 billion within the next decade. 3
This growth is supported by a compound annual growth rate (CAGR) of approximately 38.4%, with significant contributions from the retail, manufacturing, education, and industrial maintenance sectors. Consumer spending is also a key factor, with $7 billion expected to be allocated to AR/VR adoption. Of this, $3.3 billion was related to gaming, driven in part by the increasing affordability of VR headsets. 3
Leading global technology companies such as Meta, Microsoft, and Sony are investing heavily in research and development to shape AR/VR environments. Microsoft leads the innovation race with over 10,000 AR/VR patents, while companies like Sony and Intel are focused on advancing optics and device capabilities. Software platforms such as Apple’s ARKit and Google’s ARCore are driving the development of AR software, enabling novel applications and enhanced user experiences. 3-4
Game engines such as Unity and Unreal are widely used to develop content for AR/VR devices. The adoption of AR/VR technology in training, healthcare, and e-commerce shows that its usefulness is expanding across a variety of industries. 4
AR/VR optics innovation
Recent developments in AR/VR optical systems are addressing key technical challenges and increasing immersion and visual fidelity. These innovations span several areas.
light field display
Light field displays reconstruct the light rays emitted by virtual objects, allowing users to naturally perceive depth. By replicating the physical behavior of light, these displays reduce VAC, a major source of visual discomfort in AR/VR devices.
Although these systems face challenges such as low resolution and complex hardware requirements, they provide highly natural and immersive visual experiences and represent a promising direction for future AR/VR applications. 5
holographic lens
Holographic lenses, or holographic optical elements (HOEs), use diffraction to manipulate light with high precision. These lenses are lightweight, thin, and highly wavelength and angle selective, making them ideal for compact AR devices.
By integrating HOE, devices such as Microsoft’s HoloLens 2 can achieve sharper virtual images and reduced form factors. Furthermore, the combination of holographic lenses and other optical elements enabled a wide field of view (FoV), minimized chromatic aberrations, and improved user comfort. 6
adaptive optics
The adaptive system’s dynamic optical adjustments optimize focus and reduce motion blur in real-time. These technologies improve visual clarity by compensating for the user’s line of sight and environmental conditions.
Varifocal displays actively adjust focal length based on eye tracking, while multiplane approaches display discrete image layers to approximate continuous depth. These innovations are important in addressing VAC and providing users with a pseudo-3D experience that mimics natural depth perception. 2
Advances in display clarity and viewing angles
Innovations in micro-OLED and quantum dot technology improve display clarity, delivering brighter, sharper, and color-accurate visuals. This is important for realistic rendering of digital environments. 7
The FoV has been extended by optical configurations such as waveguides and pancake optics to enable a wider viewing range without increasing device size. 8 HOE and polarization multiplexing also contributed to this improvement.
Faster refresh rates, low image retention displays, and the use of an optimized optical design reduce lag, minimizing lag to support smooth interactions and reduce the potential for motion sickness. 6
Challenges and future research
AR/VR device development continues to face challenges such as cost, power consumption, and the integration of advanced optics within compact and lightweight designs. A balance between affordability and high performance is important for widespread adoption. Advanced optical systems such as HOEs and metasurfaces offer potential solutions to enhance device functionality while reducing size, but their manufacturing processes and material costs pose obstacles to scalability. 8
Power consumption remains a challenge. AR/VR devices require high-resolution displays, advanced computing for rendering, real-time tracking, and require efficient power management. 8 In 2020, WJ Joo et al. investigated low-power microdisplays such as microLEDs and OLEDs. This improves luminous efficiency, extends battery life, and maintains device functionality and comfort for a long time. 9
Current research aims to miniaturize components and enhance optical performance to improve user comfort. This includes developing compact form factors by integrating folded optics, pancake lenses, and light-field displays. Issues such as VAC need to be addressed to reduce user fatigue and increase immersion. Techniques such as variable focus displays, holographic imaging, and light field techniques are being developed to create more natural depth cues. 2, 8
As AR/VR technology advances, collaboration between materials scientists, optical engineers, and software developers can drive innovation. By 2025, advances in materials, sustainable design, and user-centered ergonomics could lead to AR/VR devices that are more immersive and integrated into everyday life.
More details about AzoOptics:
AR/VR displays: the critical role of optics in near-eye and projection technology
References and further reading
1. Zhang, T. Ying, K. Xiong, J. He, Z. Wu, S.-T. (2020). Augmented Reality and Virtual Reality Displays: Prospects and Challenges. Science. https://www.sciencedirect.com/science/article/pii/S258900422030585X
2. Choi M.-H. Han, W. Min, K. heart. ;go down. ; Shin, K.-S. Kim, M. Park, J.-H. (2024). Recent applications of optical elements in augmented reality and virtual reality displays: A review. ACS applied optical materials. https://pubs.acs.org/doi/full/10.1021/acsaom.4c00033
3. Shukla, D. (2020). The AR and VR market size has the potential to grow exponentially. (Online) Electronics for You Magazine. Available from: https://india.theiet.org/media/1315/efy-magazine-ar-vr-market-to-grow-exponentially.pdf
4. Chuhey, M. Isler, M. Roberts, R. Soda, L. (2023) Technology Trends Outlook 2023. (Online) McKingsey Digital. Available at: http://dln.jaipuria.ac.in:8080/jspui/bitstream/123456789/14260/1/Mckinsey-technology-trends-outlook-2023.pdf
5. Ying, K. He, Z. Xiong, J. Zou, J. Lee, K. Wu, S.-T. (2021). Virtual reality and augmented reality displays: Progress and future prospects. Journal of Physics: Photonics. https://iopscience.iop.org/article/10.1088/2515-7647/abf02e/meta
6. Xiong, J. Yin, K. Lee, K. Wu, S.-T. (2021). Holographic optical elements for augmented reality: Principles, current status, and future prospects. Advanced photonics research. https://onlinelibrary.wiley.com/doi/full/10.1002/adpr.202000049
7. Liang, K.-L. Kuo, W.-H. Shen, H.-T. Yu, P.-W. Huang, Y.-H. Lin, C.-C. (2020). Advances in color-converted micro-LED arrays. Japanese applied physics magazine. https://iopscience.iop.org/article/10.35848/1347-4065/abba0f/meta
8. Xiong, J. Xiang, E.-L. He, Z. Zhang, T. Wu, S.-T. (2021). Augmented Reality and Virtual Reality Displays: Emerging Technologies and Future Prospects. Wright: Science and Applications. https://www.nature.com/articles/s41377-021-00658-8
9. Zhu, W.-J. Kyung, J. Esfandyapour, M. Lee, S.-H. Koo, H. Song, S. Kwon Y.-N. Song, SH. Bae, J.C. Joe, A. (2020). Metasurface-powered OLED displays have over 10,000 pixels per inch. Science. https://www.science.org/doi/abs/10.1126/science.abc8530
