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Metaverse Market Overview
The metaverse market was valued at USD 7.91 billion in 2022. The metaverse market industry is projected to grow from USD 11.47 Billion in 2023 to USD 107.49 billion by 2030, exhibiting a compound annual growth rate (CAGR) of 45.2% during the forecast period (2024 - 2030).
The increasing incorporation of digital platforms into industries for daily operations and the increased use of AR, VR, and mixed reality by consumers, particularly in art and recreational activities, are significant market drivers for the growth of the metaverse market.
Figure 1: Metaverse Market Size, 2022-2030 (USD Billion)
Source: Secondary Research, Primary Research, and Analyst Review
Metaverse market Trends
Growing use of metaverse in gaming and recreation to boost the market growth
The internet has seen consumers use online games for recreational activities. This has helped grow the metaverse as it provides a better interface than traditional online gaming platforms. Using equipment and platforms such as VR headsets, smart helmets, and MR displays has helped improve the gaming experience, leading to increased use of metaverse by gaming developers. Thus, this has led to the growth of the market CAGR.The rising interest in cryptocurrency has also helped expand its usage. The increasing popularity of NFTs amongst the younger generation has also led to increased use of metaverse. According to CNBC, the market for NFTs increased by 210% from 2021 to 2022. Retailers and luxury brands have also used metaverse to capture consumers by selling limited edition goods, such as Gucci's collaboration with Roblox to sell limited edition bags and let users win accessories through games. Similarly, artists such as Arian Grande and Imagine Dragons have conducted concerts in the metaverse.
Figure 2: Growth in market cap of cryptocurrency
Source: Secondary Research, Primary Research, and Analyst Review
Additionally, there has been an increase in the adoption of metaverse into various end-use industries such as medicine, defense, aerospace, and other banking sectors. Major BFSI players such as JP Morgan and HSBC have started using it to better connect with their customers. Trading companies have also begun using metaverse to give their customers an interactive way of managing their stock portfolio, thus driving the metaverse market revenue.
However, there have also been trials in the medical field to set up doctor-patient interactions in the metaverse for seamless and anonymous communication. The government sector is expected to significantly boost the market for the metaverse with its implementation in areas such as tourism, defense, and employee training in the forecast period.
Metaverse Market Segment Insights
Metaverse Component Type Insights
The metaverse market segmentation, based on component type, includes hardware and software. The hardware segment held the majority share in 2021, contributing to around ~47-49% of the metaverse market revenue. This is primarily owing to the improvement in technology for components such as VR and MR headsets, sensors, and displays. For instance, the market for AR, VR, and MR headsets in 2021 amounted to about USD 28 billion.
June 2022: Meta Platforms Inc to use Broadcom Inc’s ASIC chips to develop their hardware.
October 2021: Facebook Reality labs announced its USD 10 billion investment in developing and manufacturing AR and VR headsets.
Based on platform type, the metaverse market segmentation includes desktop/laptops, mobile, and wearables. The desktop/ laptops segment dominated the market growth in 2021, accounting for around USD 16 billion. The ease of usage of desktops and the higher degree of innovation currently available in the desktop segment are significant factors for the high revenue generation. Moreover, devices such as Oculus Quest and Valve Index can only be used with high-power desktops, further increasing their use. The mobile segment is expected to see the fastest growth in the forecast period due to the rising innovation in virtual reality games as mobile applications.
The metaverse market data, based on technology type, includes blockchain, VR & AR mixed reality, and others. The VR & AR segment dominated the market in 2021. The higher degree of user experience that VR and AR provide in areas such as gaming has boosted the revenue gain for the segment. It also helps in improving peer-to-peer interaction within as well as in between the applications. The mixed reality segment is expected to showcase the fastest growth in the forecast period due to its higher performance and enhanced user connectivity and experience properties.
Metaverse Platform Type Insights
Based on platform type, the metaverse market segmentation includes desktop/laptops, mobile, and wearables. The desktop/ laptops segment dominated the market growth in 2021, accounting for around USD 16 billion. The ease of usage of desktops and the higher degree of innovation currently available in the desktop segment are significant factors for the high revenue generation. Moreover, devices such as Oculus Quest and Valve Index can only be used with high-power desktops, further increasing their use. The mobile segment is expected to see the fastest growth in the forecast period due to the rising innovation in virtual reality games as mobile applications.
Metaverse Technology Type Insights
The metaverse market data, based on technology type, includes blockchain, VR & AR mixed reality, and others. The VR & AR segment dominated the market in 2021. The higher degree of user experience that VR and AR provide in areas such as gaming has boosted the revenue gain for the segment. It also helps in improving peer-to-peer interaction within as well as in between the applications. The mixed reality segment is expected to showcase the fastest growth in the forecast period due to its higher performance and enhanced user connectivity and experience properties.
Figure 3: Metaverse market, by technology, 2021 & 2030 (USD billion)
Source: Secondary Research, Primary Research, and Analyst Review
Metaverse Application Type Insights
Based on application, the metaverse industry has been segmented into gaming, online shopping, content creation, social media, and others. The gaming industry is the largest segment in terms of application for the metaverse market, with a market share of about 28% in 2022. This is due to consumers' rising use of AR-VR games as it provides a more holistic gaming experience. The social media segment is expected to register the highest market growth in the forecast period. This is due to the increasing number of content creators and the need for improved social connection and user experience by social media companies.
Metaverse End User Insights
Based on End Users, the metaverse industry has been segmented into consumers and enterprises. The consumer segment for the metaverse industry holds the larger market share as currently. The metaverse is used for recreational activities such as buying NFTs, selling virtual artwork, and cryptocurrency. However, the enterprise segment is expected to register a higher CAGR in the forecast period as more and more companies begin using the metaverse as a marketplace and a place to handle the company’s interactive functions. The increasing use of virtual working models is expected to boost this pattern of using it for practical use in enterprises.
May 2022: Alibaba’s Taobao introduced the “Metaverse Mall” for China’s 618 shopping festival.
The report provides insights into North America, Europe, Asia-Pacific, and the Rest of the World. The North America Metaverse market accounted for USD 3.61 billion in 2022 and showcased a notable CAGR growth during the study period. This is attributed to the higher investments by firms to develop cutting-edge technologies and the higher purchasing power of consumers in the region.Further, countries studied in the market report are The U.S., Canada, Germany, the UK, France, Italy, Spain, Japan, China, India, Australia, South Korea, and Brazil.
Metaverse Regional Insights
The report provides insights into North America, Europe, Asia-Pacific, and the Rest of the World. The North America Metaverse market accounted for USD 3.61 billion in 2022 and showcased a notable CAGR growth during the study period. This is attributed to the higher investments by firms to develop cutting-edge technologies and the higher purchasing power of consumers in the region.Further, countries studied in the market report are The U.S., Canada, Germany, the UK, France, Italy, Spain, Japan, China, India, Australia, South Korea, and Brazil.
Figure 4: METAVERSE MARKET SHARE BY REGION 2021 (%)
Source: Secondary Research, Primary Research, and Analyst Review
Europe's metaverse market is fast-moving due to the expanding gaming sector in countries such as Germany, France, and the UK. Government initiatives such as AEGLE and MIDAS are also expected to boost investment into the market. For instance, Facebook is expected to provide about 10,000 jobs in the European Union. Moreover, UK metaverse market held the largest market share, and the Germany metaverse market was the fastest growing market in the region.
The Asia-Pacific metaverse market is expected to grow with the fastest CAGR from 2022 to 2030. This is due to rapid digitization initiatives by governments in developing countries such as China and India. Moreover, the economic growth in Asian countries is also expected to boost the use of metaverse in the region, helping the market to grow at a higher pace. The favorable regulations by governments for technology driver startups are also expected to be a significant factor for market growth. For instance, Meta Platforms partnered with the Indian IT Ministry to launch an accelerator, the XR Startup Program, to assist early-stage startups with innovation in emerging technologies. In 2021, Tencent Holdings, Ltd. partnered with the AIDF to improve Asia’s education, research, and entrepreneurship in the fintech industry. Further, the China metaverse market held the largest market share, and the India metaverse market was the fastest growing market in the region.
Major market players have high investments in R&D to improve their products, which will help the metaverse market grow. Market participants are taking various strategic initiatives to expand their presence, with market developments such as new product launches, contracts, mergers and acquisitions, and collaboration with other organizations. Competitors in the metaverse industry must offer technologically unique products to survive in an increasingly competitive environment.
Metaverse Key Market Players & Competitive Insights
Major market players have high investments in R&D to improve their products, which will help the metaverse market grow. Market participants are taking various strategic initiatives to expand their presence, with market developments such as new product launches, contracts, mergers and acquisitions, and collaboration with other organizations. Competitors in the metaverse industry must offer technologically unique products to survive in an increasingly competitive environment.
One of the primary business strategies adopted in the metaverse industry to benefit clients and expand the market sector is to invest in mergers and technological developments. In the metaverse market, major players such as Meta (US), Microsoft (US), Tencent (China), and others are working on expanding the market demand by investing in partnerships and product enhancements.Meta Platforms (US) is a multinational technology conglomerate. Meta changed its name from Facebook to Meta Platforms in October 2021 to align with their work in building the metaverse. The company is the parent of major social media and communication applications such as Facebook, Instagram, and Whatsapp, among other products and services. In October 2022, Meta launched Meta Quest Pro, a VR headset that provides an open periphery and lets users multitask. They also come with sensors that capture facial emotions and track eye movements.
Also, Nvidia (US) is a multinational technology company that develops software and hardware. Nvidia is a market leader in artificial intelligence. The company manufactures graphics processing units, application programming interfaces, and systems on chips for mobile and automotive markets. It also provides CUDA, an API used in supercomputers worldwide. In August 2021, Nvidia corporation signed partnerships with Blender and Adobe to create nvidia omniverse, the world’s first collaboration and simulation platform.
Key Companies in the metaverse market include
- Meta Platforms Inc.
- Nvidia
- Microsoft Corporation
- Tencent Holdings Ltd.
- Bytedance
- Epic Games
- Roblox Corporation
- Lilith Games
- Nextech AR Solutions Inc.
- Netease Inc.
- Unity Software Inc
- Antier Solutions, among others
Metaverse Industry Latest News
June 2023 : Shanghai, China's largest metropolis and financial centre, has announced a bold ambition to turn its culture and tourist metaverse projects into a thriving economy.
Shanghai hopes to generate 50 billion yuan (US$6.9 billion) in yearly revenue by the end of 2025 by leveraging the power of immersive technologies to strengthen its cultural and tourism offerings. This strategic decision is in line with the city's goal of becoming a digital leader while also encouraging domestic and international visitors to appreciate its rich cultural legacy.
Building a Thriving Metaverse Industry: A metaverse is a virtual reality-based universe in which humans can interact with digital environments and others in real-time. Shanghai's strategy is around the creation of a vast metaverse ecosystem that includes a variety of cultural and tourism activities while employing advanced technologies to fascinate viewers. The city's numerous historical sites, lively artistic scene, and diverse cultural traditions serve as a great basis for this revolutionary initiative.
Shanghai aspires to bring its cultural heritage to life in unexpected ways by integrating immersive technologies such as augmented reality and others.
Shanghai recognises the potential of metaverse initiatives to revolutionise the tourism sector by providing unique and personalised experiences such as augmented reality tourist guides, metaverse entertainment experiences, blockchain-based artworks, and AI integration.
Shanghai's strategy plan to turn its culture and tourism metaverse initiatives into a thriving industry displays the city's dedication to digital innovation while maintaining its rich cultural heritage. Shanghai hopes to attract people, improve cultural experiences, and revolutionise tourism by embracing immersive technologies.
The predicted yearly revenue of 50 billion yuan (US$6.9 billion) by 2025 demonstrates the metaverse initiative's economic potential, while cooperation and partnerships will ensure its success. As it moves closer to its goal, Shanghai is positioned to become a global leader in the digital economy, bringing visitors from all over the world to experience its dynamic culture in novel ways.
May 2023: The Decentralized Identity Management platform, EarthID, which enables secure and hassle-free exchange and identity information verification, has recently announced a strategic partnership with Tech Mahindra, a top provider of consulting, digital transformation, and business re-engineering services and solutions.
Through the agreement, a Self-Sovereign Identity (SSI) driven Metaverse platform that gives users control over their privacy, data & permission will be co-created. The platform will also give businesses the ability to defend their Metaverse settings against harmful threats including DDoS (distributed denial-of-service) assaults, data breaches, and phishing scams.
SSIs are decentralized digital identities with an emphasis on authenticated credentials that are connected to physical verification information like biometrics. Users may self-manage their digital identities without relying on third parties to centrally store and maintain their data by using blockchain technology & zero-knowledge proofs.
Enterprises will be able to reduce security issues connected to identity theft and sensitive data theft, which might result in significant monetary and legal damages, thanks to SSI-powered Metaverse. By enabling safe, frictionless transmission and identity verification, Tech Mahindra & EarthID will together develop market-leading solutions to combat identity theft, reduce expenses, and improve sustainability.
Their collaboration with EarthID, according to Rajesh Dhuddu, the Global Business Head, Emerging Technology Practise, Tech Mahindra will allow them to develop an interoperable identity security solution for virtual worlds which will aid users in authenticating without disclosing identify. By enabling their clients to embrace and internalize Metaverse services in a safe & secure manner, it will also increase their business value. Through this collaboration, Tech Mahindra will protect its new SSI-powered metaverse platform for consumers and businesses by integrating EarthID's blockchain-based, decentralized identifying capabilities.
The ultimate goal of Tech Mahindra and EarthID is to deliver industry benchmarking solutions which solve data safety and privacy issues while helping businesses to stand out in the cutthroat Metaverse market.
With the introduction of Metaverse, businesses are now faced with the problem of offering customers a seamless, frictionless, & secure experience. A user-centric, decentralized identification framework is provided by EarthID that is quickly integrated, interoperable, and reusable in different Metaverses. As a result of their cooperation with Tech Mahindra, their business clients will be able to provide engaging and secure experiences to their clients, partners, and workers, which will increase stakeholder engagement & brand loyalty.
The relationship is in keeping with Tech Mahindra's NXT.NOWTM framework, which focuses on investing in new technologies & solutions that allow digital transformation and address the changing demands of the consumer and strives to improve "Human Centric Experience."
June 2022: KPMG US and Canada launched a metaverse hub for employees, clients, and communities to interact for industry growth prospects. This is a step towards Web 3.0 for employees as well as clients.
Standard Chartered Bank, Hong Kong Ltd. (SCBHK) announced that it has entered into the Metaverse market to explore co-creation opportunities, engaging its clients, partners, staff, and the tech community. SCBHK has also acquired virtual land at the Sandbox Metaverse's Mega-City district and a cultural hub.
Moreover, the bank announced a strategic partnership with a popular Blockchain virtual gaming platform that will help Sandbox to create a metaverse experience. This initiative is led by SC Group's innovation, Standard Chartered Ventures, fintech investment, and ventures arm.
Over recent years, SCBHK has been building crypto, and digital assets business models, seeing the rise of the Metaverse in the Web 3.0 evolution. Further, the SCBHK bank has been building new experiences for clients and bringing the local sports and art communities into the Metaverse.
April 2022: Standard Chartered Bank, Hong Kong Ltd. (SCBHK) announced that it has entered into the Metaverse market to explore co-creation opportunities, engaging its clients, partners, staff, and the tech community. SCBHK has also acquired virtual land at the Sandbox Metaverse's Mega-City district and a cultural hub.
Moreover, the bank announced a strategic partnership with a popular Blockchain virtual gaming platform that will help Sandbox to create a metaverse experience. This initiative is led by SC Group's innovation, Standard Chartered Ventures, fintech investment, and ventures arm.
Over recent years, SCBHK has been building crypto, and digital assets business models, seeing the rise of the Metaverse in the Web 3.0 evolution. Further, the SCBHK bank has been building new experiences for clients and bringing the local sports and art communities into the Metaverse.
March 2022: Gamium launched a new decentralized gaming platform combining Web3 and metaverse technology. Web3 and metaverse project is set to pioneer the socialize-to-earn concept to revolutionize premium gaming and gamification in the crypto space.
February 2022: Electronics Arts Company launched a multiplayer game GRID Legends, which enables users to enter real-time events, open races, and create party lobbies.
January 2022: Warner Music group partnered with the Sandbox to launch a music-themed world, a first-time initiative by any player in the market.
Tencent acquired Black Shark, one of China’s largest gaming smartphone makers. The deal will also let black shark manufacture VR headsets for Tencent.
December 2021: ProShares announced that it is all geared to launch Metaverse ETF. The firm has already submitted an application to the US Securities and Exchange Commission (SEC) to launch its exchange-traded fund (ETF) focusing on the Metaverse. Metaverse Theme ETF can track the Solactive Metaverse Theme Index's performance, helping keep track of companies exposed to the metaverse industry.
Metaverse Market Segmentation
Metaverse Component Outlook
- Hardware
- Software
Metaverse Platform Outlook
- Desktop/Laptops
- Mobile
- Wearables
Metaverse Technology Outlook
- Blockchain
- VR & AR
- Mixed Reality
- Others
Metaverse Application Outlook
- Gaming
- Online Shopping
- Content Creation
- Social Media
- Others
Metaverse End User Outlook
- Consumer
- Enterprises
Metaverse Regional Outlook
-
North America
- US
- Canada
-
Europe
- Germany
- France
- UK
- Italy
- Spain
- Rest of Europe
-
Asia-Pacific
- China
- Japan
- India
- Australia
- South Korea
- Australia
- Rest of Asia-Pacific
-
Rest of the World
- Middle East
- Africa
- Latin America
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