Affective computing market is anticipated to grow at a significant CAGR of 26.2% during the forecast period (2024-2031).Affective computing refers to a class of computer-based solutions that analyze data about human behavior, such as facial expressions, gestures, and language, for its emotional information. The growing need to read human emotions to offer personalized products and services is a key factor driving the growth of the global affective computing market. However, data safety and security concern is estimated to be the major constraints for the market growth. Additionally, data aggregation and synchronization from multiple systems is another major challenge to the market. The evolution of IoT and wearable devices is a major opportunity for the growth of the global market.

Market Dynamics

Technological Advancements to Drive Global Market

The ongoing technological advancements in the field of affective computing are key factors driving the growth of the global market. The text analytics foundation consists of orthogonal taxonomies with associated auto categorization and data extraction rules, sentiment analysis, and more. Text analytics has developed multiple fraud detection techniques, and they can be applied to GPT systems. The integration of these technologies is anticipated to offer lucrative opportunities to market growth. In February 2024, Ontotext announced the immediate availability of Ontotext Metadata Studio (OMDS) 3.7, an all-in-one environment that facilitates the creation, evaluation, and quality improvement of text analytics services. This provides out-of-the-box, rapid natural language processing (NLP) prototyping and development so organizations can iteratively create a text analytics service that best serves their domain knowledge.

Need to Offer Better Customer Service

The growing focus of major retailers, healthcare & telecom providers among others on offering better customer service to their prime customers is a key factor driving the growth of the global market. For instance, Affectiva, an emotion measurement technology company, provides software that can analyze facial expressions during video calls to gauge customer reactions and satisfaction.

Market Segmentation

Our in-depth analysis of the global affective computing market includes the following segments by equipment type:

• Based on components, the market is sub-segmented into hardware and software.

• Based on hardware, the market is further segmented into cameras, sensors, devices, and processors.

• Based on software, the market is further segmented into analytics software, enterprise software, facial recognition, gesture recognition, and speech recognition.

• Based on end-user, the market is sub-segmented into BFSI, healthcare, automotive, retail & e-commerce, IT& telecom, and others.

• Others include media and entertainment.

Retail & E-Commerce Holds Major Share in the Global Market

Based on the end-user, the global affective computing market is sub-segmented into BFSI, healthcare, automotive, retail & e-commerce, IT& telecom, and others (media & entertainment). Retail is expected to hold a major share based on end-users. A massive digital transformation among retail organizations owing to the increasing popularity of e-commerce is a key factor driving the segmental market growth. With the growth in the emergence of several e-commerce players, the competition among online retail has increased. Therefore, these industry players such as Unilever and Pepsico are adopting affective computing to identify the preferences of their customers to offer personalized products. Additionally, the use of emotion analytics facilitates retailers with applications that include marketing intelligence, customer experience management, competitive intelligence, and risk management. For instance, in apparel retail stores, affective computing and sensor-capturing devices can be very useful to apparel retailers and fashion houses to capture real-time responses of consumers understand their behavior through emotionally aware technologies and adapt themselves to a full range of emotional experiences.

Regional Outlook

The global affective computing market is further segmented based on geography including North America (the US, and Canada), Europe (UK, Italy, Spain, Germany, France, and the Rest of Europe), Asia-Pacific (India, China, Japan, South Korea, and Rest of Asia), and the Rest of the World (the Middle East & Africa, and Latin America). 

Digitalization in Asia-Pacific

The growing digitalization in Asia-Pacific is anticipated to contribute significantly to the regional market growth. The region accounted for 60.0% of patents in digital and computer technologies right before the pandemic, up from 40.0% two decades earlier. The manufacturing power­house enjoys a wide global lead in the installation of industrial robots. China is the single biggest robot user, accounting for some 30.0% of the market.

Global Affective Computing Market Growth by Region 2024-2031

North America Holds Major Market Share

Among all the regions, North America holds a significant share owing to the presence of major market players such as IBM, Microsoft, Google LLC, and Apple, Inc. across the region. Additionally, this region is a major hub for several A-based technology start-ups which is further aiding to the regional market growth. Moreover, favorable business condition along with supporting government policies has encouraged enterprises to utilize advanced affective computing technologies for leveraging cloud technologies. Besides, the presence of several end-users that are already taking leverage of this technology is further driving the regional market growth. For instance, MetLife a global insurance company headquartered in New York City is taking leverage of affective computing for coaching contact center agents.

Government regulation also plays an important role in this market. For instance, in September, 2023 the US Department of Homeland Security (DHS) announced new policies regarding its use and acquisition of artificial intelligence (AI) technologies, including facial recognition and face capture technologies. The new policies focus on two areas namely acquisition and use of AI technologies and use of facial recognition and face capture technologies.

Market Players Outlook

*Note: Major Players Sorted in No Particular Order.

The major companies serving the global affective computing market include Affectiva Inc., Element Human Ltd., Kairos AR Inc., Nuance Communications, Inc., and Google LLC among others. The market players are increasingly focusing on business expansion and product development by applying strategies such as collaborations, mergers, and acquisitions to stay competitive in the market. Kouo, a pioneering product analytics company, announces the launch of its innovative AI-powered emotion analytics technology. Designed to assist strategy teams within organizations, Kouo empowers product teams to implement data-driven improvements that enhance key business metrics

The Report Covers

• Market value data analysis of 2023 and forecast to 2031.
• Annualized market revenues ($ million) for each market segment.
• Country-wise analysis of major geographical regions.
• Key companies operating in the global affective computing market. Based on the availability of data, information related to new product launches, and relevant news is also available in the report.
• Analysis of business strategies by identifying the key market segments positioned for strong growth in the future.
• Analysis of market-entry and market expansion strategies.
• Competitive strategies by identifying ‘who-stands-where’ in the market.