Virtual reality manufacturers in Croatia report growth, but the market is still developing

In addition to the video game development industry, which has gained significant importance in Croatia recently, particularly due to the increasing number of gaming companies and startups, as well as the sale of Nanobit to the Swedish Stillfront group and the recent acquisition of Gamepires by the British publisher Jagex, companies in the virtual reality sector are also experiencing a boom. Companies engaged in the development of solutions for VR (virtual reality), AR (augmented reality), MR (mixed reality), and XR (extended reality) have also recorded significant growth over the past few years. This is partly driven by the development of gaming, as various virtual reality solutions and devices are used in video games, and companies collaborate with each other, but a significant part of this is due to their own projects.

The value of the global VR market was $3.1 billion in 2019, reached $21.83 billion in 2021, and is projected to grow to $31 billion by 2023. The increasing importance and intensive development of VR technology in Croatia is confirmed by Mario Mikić-Vučak, director of the Osijek-based VR company Culex, which is also experiencing a significant trend of growth in business results.

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Mario Mikić-Vučak, owner and director of Culex

—– Thanks to the wide application of VR technology in various sectors such as education, tourism, industry, and entertainment and gaming, many companies are dedicated to the development and production of VR software. The growth trend of VR in Croatia confirms the increasing potential of the technology in various fields and is expected to influence the further development and transformation of different industries in the future. It should also be noted that centers, museums, companies, and other stakeholders play a significant role in promoting the growth of the VR trend. By implementing VR devices into their offerings, they provide visitors with the opportunity to familiarize themselves with this technology while simultaneously promoting it, explains Mikić-Vučak.

Interactive experiences

Last year, Culex noticed an increasing number of inquiries for XR, or extended reality technology (the umbrella term for virtual, augmented, and mixed reality), in which they specialize. The greatest benefit of VR technology, according to Mikić-Vučak, lies in providing innovative and interactive experiences that would otherwise be unavailable.

For example, one of the projects they worked on is Bibliobus, a traveling bus that visits schools in the Vukovar-Srijem County and educates children about their county through VR technology. For Končar , they conducted virtual reality training, where they educated employees on assembling generators produced by Končar, while they provided a solution for public speaking anxiety to the Vukovar Lavoslav Ružička Polytechnic.

– Our products have been aimed at various sectors, including museums, tourism, industry, education, and entertainment. Accordingly, we have achieved successful collaboration with several major players in these areas, which has allowed us to expand our presence on a global level. Last year, we invested significant resources in research and development of XR technology to ensure that we stay in line with the latest trends and market demands, says Mikić-Vučak.

To ensure the growth and development of Culex in the coming years, they will invest in technology, expand activities, create digital products, and aim to increase their global presence.

VR as a tool

The growth trend of VR technology is also confirmed by Jerko Škorić, Chief Operating Officer at the Zagreb-based company Delta Reality, whose revenues have grown by more than 70 percent in the last three years.

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Jerko Škorić, Delta Reality

photo Linkedin

—– We are pleased to say that most of the growth has been achieved by expanding into foreign markets such as the USA, Germany, Austria, Switzerland… says Škorić.

Delta Reality works on projects for various industries, developing VR modules for training employees in remote locations for the oil and gas sector, creating a mobile application that combines art and music inspired by the Pokemon GO game for the gaming sector, and developing applications that use VR and AR technology for visitor centers for tourism purposes.

In the future, Škorić adds, they plan to develop commercial products in the VR and AR segments, maintain VR and AR training in the local market, and further expand into foreign markets.

– The greatest opportunities for growth we see in the area of developing VR applications for employee training – VR as a tool has proven to be very effective in training as it enables more efficient learning while simultaneously reducing training-related costs, explains Škorić.

Mikić-Vučak agrees, believing that VR provides a unique experience for users through interactive simulations that encourage learning at various levels. For instance, in environments that are difficult to access in the real world, such as heights, ocean depths, space, and unknown areas. In addition to education and practical employee training, he sees the potential of VR technology in medicine.

– By using VR technology, medical students can experience real situations that may arise in clinical practice, such as diagnosing diseases or performing surgeries. Patients can also be educated about their diagnoses and treatment procedures through VR simulations that allow them to better understand their condition and increase their confidence in medical care. Students, for example, can experience a journey through history or different parts of the world without leaving the classroom. Workers in various industries, such as manufacturing, construction, and healthcare, can be educated about complex procedures through VR simulations that allow them to practice their skills without the risk of mistakes, explains Mikić-Vučak.

Developing market

However, despite numerous potentials and increasing applications in various activities in Croatia, XR solutions are still not as prevalent here as they are, for example, in the American market, where this technology generates the highest revenues.

– Gaming industry globally attracts a significantly larger number of users compared to VR gaming which requires owning VR devices. The estimate for 2023 is around 171 million VR users worldwide, while the gaming world counts about three billion players. Despite this, VR is still considered a relatively new technology, and it will take more time for it to become widely adopted in every household, believes Mikić-Vučak.