The New Zealand virtual reality and augmented reality (VRAR) industry sector's forecast revenues are estimated to be worth more than $320 million within two years, a report states.

The publication was commissioned by the New Zealand Virtual Reality and Augmented Reality Association (NZVRARA), which is a part of the New Zealand Tech Alliance.

The NZVRARA was formed last year and has more than 110 members.

More than 1,100 full-time equivalent staff are currently employed in the sector, in New Zealand and is conservatively estimated to double in two years.

Globally, AR is predicted to be the fastest growing segment in the world with forecast global revenues of US$83 billion.

Forecast revenues for the sector at more than $320 million compares favourably with the New Zealand games development industry, which has revenues of around $100 million, Graeme Muller NZTech chief executive says.

Muller states, “The VRAR industry is expected to face skills shortage within two years, according to a NZVRARA industry survey undertaken in July this year.

“Today's report recommends independent annual surveys for headcount, revenue and key metrics in the VRAR sector, which is positive.

“Sector industry survey participants are adamant that building scale among members to provide offshore services is important to continue taking a leadership role internationally, companies such as Auckland's M Theory are already demonstrating their work offshore.

The sector has some globally dominant market positions in holographic capture, games development, 360-degree filming such as Animation Research Ltd for the America's Cup, and augmented reality such as Wingnut AR.

Muller continues, “We have researchers operating at the peak of the industry such as Victoria University and Christchurch's HIT Lab NZ.

“A skills shortage for employee acquisition is a major concern for sector participants, the NZVRARA's student chapter is channelling tertiary students into on-campus VR clubs and linking graduates to member companies for internships and employment.

“Building national capability with VR equipment and AR platforms and building expertise in immersive technologies requires assistance beyond the voluntary and ad hoc activities of the sector.

Some sector survey participants identified a lack of general business skills as a constraint to growth.

The provision of tailored education, training and support for sector company representatives should be considered.

A second report exploring entertainment, training and education and the role of VR in Enterprises will be released later this year.