Metaverse Market Size, Share & COVID-19 Impact Analysis, By Component (Hardware, Software/Platform, and Services), By Platform (Desktop, Mobile, Console, and Others), By Application (Gaming, Healthcare, Education and Training, Social Media and Entertainment, Travel and Tourism, Real Estate, Banking and Finance, and Others), and Regional Forecast, 2023-2027

The global metaverse market size was valued at USD 234.04 billion in 2022 and is projected to grow from USD 416.02 billion in 2023 to USD 3,409.29 billion by 2027, exhibiting a CAGR of 69.2% during the forecast period.

Metaverse is a simulated digital environment enabled by Virtual Reality (VR), Augmented Reality (AR), blockchain, mixed reality, and other advanced technologies. These technologies construct areas to create an exclusive user experience in the virtual environment.

This report comprises information on 3D immersive experience platforms and virtual reality-based services provided by organizations such as NVIDIA Corporation, Meta, Tencent Holdings Ltd., and Roblox Corporation.

This novel concept also uses blockchain to deliver numerous services such as secured transactions, easy accessibility, and digital governance. Additionally, increasing investments in virtual world services that are integrated with blockchain will strengthen the global metaverse market growth. For instance,

• In January 2022, Space Falcon, a gaming company, spent USD 4 million to transform its conventional gaming with blockchain technology. In addition, the organization focused on developing a metaverse space with the help of premium NFTs and blockchain technology.

Furthermore, many e-commerce companies are implementing digital world services to showcase their products in the virtual world to obtain real-world experience. Also, these companies are investing heavily in these services, thereby expanding the market size. For instance,

• In November 2021, Nike, Inc., a shoe and retail apparel brand, partnered with Roblox Corporation to produce a virtual world called Nikeland. Nikeland allows dressing up with individual avatars in Nike’s branded sneakers and apparel.

COVID-19 IMPACT

Rising Consumer’s Adoption of Online Gaming to Boost Demand for Video Game & Video Conferencing Services

The impact of the COVID-19 pandemic skyrocketed the demand for video gaming and video conferencing services. The global market witnessed a growth rate of 3.3% in 2020 as compared to 2.6% in 2019. This growth can be credited to a surge in the adoption of online video gaming and rising consumers’ preference for online shopping of retail products. According to a Newzoo report, the global gaming population for e-sports reached around 495 million in 2020, an increase by 11.7%, and is projected to reach 646 million by 2023. Such an increase in the gaming population has created a massive demand for services.

Additionally, the pandemic boosted the demand for online shopping and catalyzed the creation of a virtual world of shopping for customers. This prevailing trend encouraged several organizations to enter the online shopping market. Several leading players invested heavily in advanced technologies during the pandemic by adopting various business strategies, product launches, and partnerships. For instance,

• In November 2021, Niantic, Inc., an AR and VR platform provider, raised USD 300 million from gaming organization, Coatue Pokémon GO, to create a real-time virtual platform.

Moreover, the revenue of the leading players is expected to increase post-pandemic, which may boost the demand for services.

LATEST TREND

Rising Consumer Spending on Virtual Concerts and Events to Drive Market Growth

Rising consumer spending on virtual concerts across the media and entertainment sector to broadcast events will aid the market growth. According to the India Brand Equity Foundation Organization (IBEF), the media and entertainment sector reached around USD 19 billion in valuation in 2020 and is expected to reach USD 25.9 billion by 2023. Media & entertainment events and concerts are being carried out in various digital spaces that use VR headsets and AR gadgets.

Furthermore, rising demand for virtual events and surge in the number of visitors for concerts and events could fuel the market share. For instance,

• As per the Department for Digital, Culture, Media and Sports report in the U.K., immersive technologies, such as VR and AR, grew rapidly and gained USD 128.36 billion in 2020.

DRIVING FACTORS

Rising Adoption of Advanced VR Devices and Blockchain to Accelerate Market Growth

The rising demand for advanced VR devices globally from small, medium-scale & large-scale organizations and individual consumers will foster the market growth. Moreover, the increasing adoption of emerging technologies, such as Artificial Intelligence (AI), blockchain, and Mixed Reality (MR) in various applications is driving the market growth.

Additionally, rising investments in retail and e-commerce sectors and surge in the adoption of platforms to showcase products in the virtual environment is expected to bolster the market growth. According to the United Nations Conference on Trade and Development (UNCTAD) report, the global e-commerce sales reached USD 26.7 trillion, increasing from 16% to 19% in 2020. Such an increase in e-commerce sales around the globe is predicted to create lucrative opportunities for the market’s growth during the forecast period.

RESTRAINING FACTORS

Lack of Awareness of Service and Security Options to Impede Market Growth

The market is subjected to several challenges, such as security concerns, lack of awareness, government rules & regulations, and others. Also, leading industry players have incurred losses worth billions of dollars owing to cyberattacks in the virtual environment. This factor, along with high sensitivity issues in the virtual environment, may hinder the market expansion.

SEGMENTATION

By Component Analysis

Rising Development of Advanced Software/Platform Aids Market Growth

Based on component, the market is segmented into hardware, software/platform, and services. The software/platform segment is expected to record the highest CAGR owing to the development of advanced software and platforms by leading players. For instance,

• In January 2022, NVIDIA Corporation released software for 3D animators and developers. The company focused on distributing a free enhanced version of its Omniverse software to generate virtual worlds for individual artists. The organization planned to charge USD 9,000 yearly for individual and corporate customers.

The services segment is also growing at a moderate pace due to the rising adoption of metaverse services by e-commerce brands. For instance,

• In May 2021, Roblox Corporation, a gaming platform, offered its services to e-commerce and retail brand Gucci Garden to create brand awareness among young customers. In addition, Roblox created a virtual regeneration of Gucci’s shoes and apparel.

By Platform Analysis

Rising Demand for Online Gaming to Fuel Adoption of Desktops

Based on platform, the market is divided into desktop, mobile, console, and others. The desktop segment captured the largest market share in 2021 owing to the device’s rising adoption among online gamers. Increasing revenue from video games and surge in the number of video gamers across the globe are driving the market’s growth. According to the WePC Report, in 2021, there were more than 2.5 billion video gamers globally. This scenario has created a massive demand for desktops for experiencing virtual reality gaming. 

Further, the mobile segment is expected to record the highest CAGR during the forecast period. This growth is primarily attributed to a strong increase in companies’ revenue generation capacity from mobile gamers.

By Application Analysis

Rising Adoption of Gaming and Live Video Streaming to Fuel Market Growth

Based on application, the market is divided into gaming, healthcare, education and training, social media and entertainment, travel and tourism, real estate, banking and finance, and others. Among these, the gaming segment is expected to hold the largest share in the market due to a surge in the adoption of gaming and live video streaming services across the world. According to a Newzoo report in 2021, the global gaming market recorded USD 175.8 billion in revenue in 2021 and is expected to reach USD 200 billion by 2024. Gamers across the world are widely adopting advanced technologies, such as VR and AR gadgets and digital world services for experiencing a virtual world of gaming.

REGIONAL INSIGHTS

The market is segmented into North America, Europe, and the Rest of the World. The regions are further categorized into countries.

North America is expected to hold the largest metaverse market share due to rising investments in metaverse platforms by leading players such as Meta, Roblox Corporation, NVIDIA Corporation, and others. For instance,

• In September 2021, Meta, a U.S.-based technology and social media organization, injected around USD 50 million in the global R&D for its platform.

Europe is expected to register the highest CAGR during the forecast period. This is attributed to the rising number of social media platform users and gamers. The regional market’s growth is also driven by the rise of the online gaming industry in major countries, such as France, Italy, the U.K., Germany, and others. According to MejoresApuestas.com, the number of gamers in Europe increased to 329.5 million in 2021. This figure is expected to reach 351 million by 2023. Also, many financial service providers are adopting metaverse platforms to collaborate efficiently.

The Rest of the World including Asia Pacific, the Middle East & Africa, and Latin America is anticipated to grow at a moderate pace during the forecast period. This growth can be credited to the development of the platforms and services in Asia Pacific countries including China, Japan, and India. For instance,

• In January 2022, Tencent released metaverse services to assist Japanese organizations. These organizations would make use of Tencent’s cloud computing solutions by using virtual human avatars that are equipped with Japanese language features. Tencent’s assistance would play a crucial role as a shop staffer for Japan’s weather channels and e-commerce websites.

KEY INDUSTRY PLAYERS

Key Players are Developing and Expanding their Service Offerings Worldwide

Major organizations in the market are spending on advanced technologies, such as cloud, AI, and ML, to enhance the quality of their services. Also, these players are involved in implementing various strategic tactics, such as acquisitions, collaborations, mergers, and partnerships, to expand their market existence. 

List of Key Companies Profiled:

• Tencent Holdings Ltd. (China)


• NVIDIA Corporation (U.S.)


• Meta (U.S.)


• Roblox Corporation (U.S.)


• Microsoft Corporation (U.S.)


• Globant (Luxembourg)


• Queppelin (India)


• Alibaba Cloud (U.S.)


• Netease Inc. (China)


• Magic Leap, Inc. (U.S.)

KEY INDUSTRY DEVELOPMENTS:

• January 2023: The International Organization for Public-Private Cooperation in Geneva, also known as the World Economic Forum (WEF), collaborated with Microsoft and Accenture to build a Global Collaboration Village. This metaverse platform focuses on promoting virtual multi-stakeholder cooperation.


• December 2022: Meta mentioned that it would contribute USD 2.5 million to support European academic research for discovering opportunities and problems in the metaverse. With the help of this funding, researchers from seven countries in Europe would study how metaverse technologies affect safety, privacy, inclusiveness, and the future of employment.


• September 2022: Meta Platforms collaborated with the IT Ministry of India to release the XR Startup Program to develop advancements in evolving technologies such as virtual and augmented reality. This initiative focused on encouraging technological improvement in smaller towns and cities.


• January 2022: Sandbox partnered with Warner Music Group to introduce the first music-themed world into the Sandbox metaverse. With this strategy, Warner Music Group (WMG) would take its first step into the NFT and metaverse sector.


• April 2021: Epic Games Inc. received funds worth USD 1 billion to support the market growth in the future. The company’s financing round comprises a USD 200 million strategic investment from the Sony Group Corporation.

REPORT COVERAGE

The report highlights leading regions to offer a better understanding of the market. Furthermore, the report provides insights into the latest market developments, share, growth, trends, research, overview, and analyzes technologies deployed at a global level. It further highlights some of the driving factors and restraints, helping the reader gain in-depth knowledge about the market.

REPORT SCOPE & SEGMENTATION