A new report by VC firm LETA Capital predicts that the phygital market will be worth $216 trillion by 2030. Phygital refers to any product that includes physical and digital experiences. According to the report, we are on the threshold of entering the phygital era.
“The beauty of digital solutions is in enhancing the real world and pushing its limits,” says LETA Capital Partner Sergey Toporov. “That emerges in the sets of “phygital” technologies, and it happens TODAY, not tomorrow.”
Phygital products are popping up in various industries and markets. From toys that use AI to communicate with children to augmented reality, phygital products and experiences are everywhere. Ubisoft partnered with Integral Reality Labs to create Assassin’s Creed smart collectible NFTs. These NFTs come with a 3D-printed assassin figurine suspended in a clear cube. Integral Reality Labs also recently launched Integral Co-reality, a platform for phygital smart collectibles based on video game characters.
Microsoft and other tech giants are investing in phygital
Tech giants investing in phygital technologies include Microsoft, Apple, Meta, Amazon, Nvidia, Tencent and Alphabet. To date, Microsoft, Apple, Alphabet, Meta, Amazon, and ByteDance have invested over 160 billion in the Phygital market. Last year, the phygital device market was worth $365 billion and is expected to be worth ten times that by 2029.
“The Vision Pro represents a significant leap in technology by utilizing eye gaze as its primary targeting mechanism, a bold move in the field,” says Founder and CEO of ShapesXR Inga Petryaevskaya, “The avoidance of traditional controllers is intentional, aimed at simplifying user adoption. It’s akin to how Apple revolutionized the mobile industry by introducing a touch screen, eliminating physical keyboards. Now, Apple is disrupting spatial computing.”
Worldwide investments in AR technologies have reached $22.78 billion. Currently, North America leads the investment with $1.93 billion in 2023. Europe has invested $120 million in AR tech this year. Similarly, North America has invested the most in 3D technology at $1.45 billion in 2023, with total investments reaching $19.78 billion globally.
“I envision a future where the digital and physical worlds are indistinguishably merged. This fusion will not only change how we interact with objects but also with each other,” says Alex Chachava, Managing Partner at LETA Capital of the future of phygital.