Digital Human Avatar Market: Current Analysis and Forecast (2024-2032)

The global digital human avatar market comprises the application of human-like digital avatars powered by artificial intelligence in industries like entertainment, health care, education, and customer relations. These avatars whose focus is to be able to communicate and capture users in some ways are employed more in personal assistant interfaces, sales and marketing icons, and perceptions and simulations. The growth of this market is influenced by Artificial Intelligence and Machine learning technology, the necessity for the optimization of the user experience and customer interaction as well as by the implementation of avatars to metaverse concepts. Moreover, the rising use of digital transformation solutions in several industries also propels the market's growth.

The digital human avatar market is set to exhibit a growth rate of about 40.6%. This is due to strategic alliances with cloud service providers and other tech firms that can enhance product offerings and market reach. For instance, in November 2022, Ogilvy announced the opening of Reality, a "lab" for digital experiences devoted to exploring and developing new uses for technologies like AR, VR, and NFT. The firm will concentrate on three main areas: augmented Reality (AR), "synthetic experiences," which include brand avatars and virtual people, and "decentralized experiences," which include NFT design and web3 applications. With this statement, Ogilvy becomes the second network agency to invest significantly in creating virtual brand avatars.

Based on the product type, the market is bifurcated into interactive digital human avatar and non-interactive digital human avatar. The interactive digital human avatar category is expected to have the largest market share of the digital human avatar market. These avatars, supported by artificial intelligence, machine learning, and natural language processing make them a perfect choice for customer engagement, the health sector, the education sector, and the entertainment field. As such, they enrich the human experience, optimize processes, and offer versatile tools for organizations. The need for such virtual experiences, improved AI, and VR technologies together contribute to the increased usage of such avatars that in turn fuel the market growth across the globe.

Based on the deployment, the market is bifurcated into cloud-based and on-premises. Among these, the cloud-based category is expected to have the largest share of the market. Cloud infrastructure helps in storage and management of voluminous data that are necessary in the development of artificial intelligence and machine learning techniques for realistic and interactive avatars. Moreover, it helps developers and businesses to use advanced tools and services to create digital avatar solutions and doesn't require substantial capital investments in hardware, which accelerates the creation of new useful solutions on the market. It does not only improve customers' experience but also fuels the implementation of avatars in various spheres of life such as entertainment, purchasing, and studying.

Based on the verticals, the market is segmented into gaming, retail, it & telecommunications, education, and others. Among these, the gaming category is expected to have the largest market share of the market by enhancing realistic perception and game control experiences. The demand for more realistic and engaging gaming environments is driving developers to incorporate realistic Digital Human Avatars that improve player identification and immersion in video games. Advances in graphics, and animation especially in artificial intelligence make it possible to use avatars that imitate human actions and looks to enhance the game. Also, the proliferation of multiuser and virtual reality games has resulted in the increased demand for customized avatars to stay unique and socialize, and so make the marketplace more inviting to invest in avatars' technologies.

For a better understanding of the market adoption of digital human avatar, the market is analyzed based on its worldwide presence in countries such as North America (U.S., Canada, and the Rest of North America), Europe (Germany, U.K., France, Spain, Italy, Rest of Europe), Asia-Pacific (China, Japan, India, Rest of Asia-Pacific), Rest of World. Among these, the North American region will grow at the fastest CAGR during the forecast period. The North American Digital Human Avatar Market refers to technology and solutions that involve the creation of a digital human avatar capable of performing different roles and purposes such as customer relation services, gaming, virtual reality, and social interfacing. This market is fueled by factors like the rising interest in better personalization of user experience, the development of AI/ML, and the trends for virtual helpers and depth of experience technologies. Furthermore, COVID-19 created new opportunities in the market because people spend significantly more time online; therefore, it has become essential to develop more effective virtual communications, which increased the market's demand. As more and more organizations across industries use digital human avatars to increase consumer satisfaction and optimize processes, is expected to grow rapidly in North America in the coming years.

Some of the major players operating in the market include Alibaba Cloud; UneeQ; HOUR ONE AI; iFLYTEK Corporation; Meta Platforms, Inc.; Microsoft Corporation; Soul Machines; Ziva Dynamics; AI Foundation; and NVIDIA Corporation