Metaverse Market - Growth, Trends, COVID-19 Impact, and Forecasts (2023 - 2028)

Metaverse Market Analysis

The Metaverse Market is expected to register a CAGR of 41.6 % throughout the forecast period (2022 - 2027). The key reasons propelling the growth of the Metaverse Market globally are rising demand in the worldwide media, entertainment, and gaming industries, primarily due to the increased usage of Augmented Reality (AR), Virtual Reality (VR), and Mixed Reality (MR) technologies. The crucial justifications for adopting these technologies are that the gadgets, such as VR headsets, MR headsets, HUD, HMD, smart glasses, and intelligent helmets, can provide a first-person perspective, that act as natural user interfaces, providing 6-degree freedom, etc., to create virtual scenarios that look realistic and improve the overall gaming experience of end users.

• Small, medium-sized, and large-scale businesses and individual customers increasingly need advanced VR gadgets, promoting market expansion. Also, the rising investments in retail and e-commerce and increased use of platforms to display products in a virtual environment support industry expansion. For instance, Decentraland, a metaverse powered by the Ethereum Blockchain, raised USD 1.2 million in February 2022 through an auction and marketplace for fungible tokens. Price Waterhouse Cooper Hong Kong also paid USD 10,000 for LAND in Sandbox.
• Additionally, the market is growing due to the increased use of advanced technologies in various applications, including blockchain, mixed reality, and artificial intelligence (AI). The metaverse industry greatly benefits from the growing usage of new technologies, including mixed reality (MR), extended reality, artificial intelligence (AI), and blockchain. Companies, including Roblox, Facebook, Oculus, Epic Games, Microsoft, Google, USM, NVidia, etc., have already implemented or are implementing Metaverse XR/extended reality systems and other new technologies.
• Moreover, through metaverse portals, cryptocurrency is frequently used to pay for everything, from avatar shoes to NFT (Non-fungible tokens). According to a CNBC (Consumer News and Business Channel) survey, one in ten people invests in cryptocurrencies, which are commonly used in trading various commodities, including NFTs. The global accessibility of cryptocurrency exchange allows investors to use this asset to offer products directly to customers on the Metaverse, thus favorably altering the market patterns.
• However, since many users are unaware of the service and security alternatives available, the expansion of the metaverse market may be constrained. Also, on the other hand, cyberattacks against key players like Tencent Holdings, Globant, and others have raised serious security and sensitivity issues. As per the 2022 SonicWall Cyber Threat Report data, the first half of 2022 saw 2.8 billion malware attacks, an 11% rise over 2021.
• The COVID-19 pandemic significantly boosted interest in the concept of the Metaverse. There is a need for practical methods or channels to make online contact more realistic as more people started working from home and attending classes online. Its importance to both consumers and businesses increased because of the pandemic. Tech companies began working on this technology in 2020 and publicized their investments. The year 2021 was successful for investments in Metaverse technology due to the billion dollars spent on Metaverse.

Metaverse Industry Segments

The term "metaverse" refers to a highly immersive 3D virtual world experience obtained using a combination of AR, VR, and MR technologies. By creating a virtual world where users can play immersive games, conduct business, interact socially, buy and sell virtual properties, and enjoy immersive entertainment, the metaverse platform enhances the overall internet experience. 

The Metaverse Market is segmented by Type (AR & VR Hardware, Social Media Engagement (Ads), Virtual Live Entertainment - Epic, Games and Roblox Gaming Services), by End-User Industry (Gaming, Media & Entertainment, Commercial, Retail), and Geography

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Metaverse Market Trends

This section covers the major market trends shaping the Metaverse Market according to our research experts:

Gaming Segment Accounted for the Largest Market Share

• There has been significant growth in VR and AR gamers globally, broadening the market horizon. A provider of machine learning, artificial intelligence, big data analytics, and AR/VR solutions, NewGenApps predicts that by 2025, there will be 216 million people worldwide playing VR and AR games, with a market value of USD 11.6 billion.
• Additionally, a crucial factor that points to a promising future for VR technology in gaming is the rising comfort levels of customers in situational uses, such as VR calls and VR gaming. According to the Entertainment Software Association's statistics, around 227 million Americans play video games weekly, including two-thirds of adults and three-quarters of children under 18. The average age of video game players is 31 years, with 55% of men and 45% of women participating.
• In February 2022, Sony released the VR2 and VR2 Sense Controllers for the PlayStation 5 to provide customers with a high-quality virtual reality experience that enables users to lose themselves in the gaming world with a broad spectrum of experiences. High visual fidelity and improved trackers are added in VR2.
• Moreover, in July 2021, Virtex declared that it intends to introduce a virtual reality stadium, "Virtex Stadium," allowing fans to watch games with their friends from the center of the field. The introduction coincides with the rise in e-sports' popularity and the growing improvement in consumer VR hardware's performance and accessibility. According to VentureBeat data, the worldwide eSports audience was 474 million in 2021 and will increase to 577.2 million by 2024.
• The gaming world is changing at a rapid pace. A broad range of game developers worldwide is working on various futuristic game projects for select VR/AR platforms in 2022. According to a 2022 survey by Game Developers Conference, 27% of participating game developers globally said they were working on titles for the Oculus Quest virtual reality headset.

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