The 2016 holiday season brought virtual reality to the masses. Shoppers were treated to a variety of options, from $20 smartphone headsets at discount stores, to high-end gaming headsets costing hundreds of dollars from Sony, Oculus Rift and HTC. Even so, this technology is still developing, and a huge market will not materialize overnight. This report presents Semico Research’s forecast for virtual reality, augmented reality and mixed reality, with a focus on distinguishing the three segments based on hardware and applications. Semico calls this combined market the Enhanced Reality market. Virtual reality is the segment taking the early lead in this market with excitement over the potential growth in immersive entertainment experiences. However, in the long term augmented reality and mixed reality may have more impact in the automotive, entertainment, industrial medical, retail and social media arenas.