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The Global Metaverse Market size is estimated to grow at a CAGR of 40.06% between 2022 and 2027. The size of the market is forecast to increase by USD 1,152.35 billion. Primary factors to drive the metaverse market include Augmented Reality (AR) and Virtual Reality (VR) technology, growing smartphone penetration and use of 5G, and the rise of blockchain as a service.
The metaverse market share is currently experiencing a surge in consumer adoption of online gaming. The metaverse is a communal, persistent digital space where individuals can gather, engage in gaming activities, and socialize, represented as cartoonish 3D avatars traversing virtual environments. As the demand for such experiences continues to grow, the metaverse is rapidly expanding. For instance, According to KPMG research, online gaming will reach 510 million people by the end of 2022, up from 360 million in 2020. Such factors contribute to the global metaverse market growth during the forecast period. The demand for the metaverse has led industry players such as Animoca Brands, ByteDance, and CL Educate, to enter the market to explore the immersive possibilities of the digital world.
This report extensively covers market segmentation by the device (VR or AR devices and computing devices), component (hardware, software, and services), and geography (North America, Europe, APAC, South America, and Middle East and Africa). It also includes an in-depth analysis of drivers, trends, and challenges.
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The growing smartphone penetration and use of 5G technology are notably driving the market growth, although factors such as privacy and security concerns over the metaverse may impede the market growth. Our researchers analyzed the data with 2022 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
The growing smartphone penetration and use of 5G are notably driving the market growth. 5G, the latest technology that offers great speed, is becoming popular among consumers. With the high adoption of smart devices such as smartphones, the demand for 5G is growing. These devices are being widely used by consumers at home and workplaces. Hence, the need to expand 5G coverage is rising, which, in turn, will increase demand for 5G equipment.
Furthermore, smartphones are becoming common gadgets. With the growth in smartphone penetration, there has been a rise in online shopping, as well as the use of social media platforms. Thus, with the availability of 5G networks and smartphones, the use of different apps and online platforms for online shopping is expected to increase, which will drive the growth of the global market. Moreover, the availability of such high-speed internet will evoke various businesses, such as e-commerce and finance businesses, to adopt advanced technologies such as metaverse to enhance the virtual experiences of the customers while online shopping. Thus, growing smartphone penetration and use of 5G is one of the growing trends which is expected to drive the growth of the global market during the forecast period.
The rising consumer adoption of online gaming is an emerging trend in the market. Games are an important element of human culture, but how they are played has evolved over time, from ancient board games to VR. The much-hyped metaverse refers to a shared, lasting digital place where people can gather, play games, and socialize. It is now mainstream technology, as well as the next big thing in the digital world. Metaverse provides an immersive visual experience that supports emerging technologies such as blockchain, IoT, and 3D visualization. Although metaverse is being used by a variety of businesses, the gaming sector was the first to fully utilize it. Players are drawn to the metaverse because of its persistent nature. It means that players do not need to turn on or off the gaming platform, and it continues to exist after they have completed their session.
Because of factors such as the increasing use of advanced gaming technologies, changing consumer entertainment choices, and rising income levels, the market for online games is developing at a healthy rate. Moreover, better internet connectivity has resulted in a fast increase in the number of players. Hence, such factors contribute to the global market growth during the forecast period.
The privacy and security concerns over the metaverse are major challenges impeding the market growth. Data privacy and security have been a long-running concern for users of the metaverse even though companies and organizations keep revolutionizing their IT security systems. The metaverse collects and processes vast amounts of information about users and their environment. Privacy concerns, therefore, are a major challenge in the global market.
Metaverse can access the personal data of users and may pose a threat to their privacy. It can collect a lot of information from the user's social networking accounts. User privacy can also be threatened if hackers gain access to the user's device. Moreover, there are privacy-related concerns associated with smart gears used in the metaverse, such as smart glass, VR headsets, etc. These glasses automatically screen and process the user environment, violating the privacy of the user and those around them. Therefore, such factors may hamper the growth of the market during the forecast period.
The report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Global Metaverse Market Customer Landscape
Vendors are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
Roblox Corp. - The company offers entertainment products and services and is also involved in a wide range of online games such as internet three-dimensional and tutorial games for kids, teens, and adults. The key offerings of the company include metaverse.
The report also includes detailed analyses of the competitive landscape of the market and information about 15 market vendors, including:
Qualitative and quantitative analysis of vendors has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize vendors as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize vendors as dominant, leading, strong, tentative, and weak.
The market share growth by the VR or AR devices segment will be significant during the forecast period. VR or AR devices segment accounted for the highest market share in 2022. This includes various headsets, smart glasses, and lenses used for interacting on the metaverse platform. Factors such as new product launches and growing adoption of VR/AR in different application areas, including metaverse, are expected to drive the segment growth.
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The VR or AR devices segment was valued at USD 47.70 billion in 2017 and continued to grow until 2021. VR or AR is an experience that utilizes a camera to change or enhance the user's view of the virtual world like a metaverse. This experience can be app-based or web-based. With the increased popularity of 360-degree videos and VR/AR gaming on the metaverse, the demand for VR/AR technology is growing. Furthermore, the addition of new features to the VR metaverse is expected to fuel the segment's growth. For instance, SAIBA CITY, a decentralized VR Metaverse platform, will offer options to create and monetize digital assets. People using this VR platform can own virtual land or any other virtual assets. VR/AR device manufacturers are focusing on new product launches and acquisitions to expand their market presence. For instance, in October 2021, Facebook announced that it would launch a new high-end VR/AR headset for the metaverse during the forecast period. Apart from that, the market is also witnessing the entry of big brands like Google. Recently, in 2022, Google acquired Raxium, a micro-LED solution provider for AR devices. This acquisition will help Google to develop its new AR headset for the global market. Hence, such factors are expected to propel the segment growth during the forecast period.
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North America is estimated to contribute 39% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.
In 2021, North America held the highest share of the global market. Factors such as the presence of key vendors like Meta Platforms, Inc., NVIDIA Corp., and Microsoft Corp., growing investments in AR technology from key vendors, rising adoption of technologically advanced applications among consumers, and strong research activities to increase the application of metaverse are driving the growth of the market in the region. The US and Canada are the leading contributors to the market in the region.
Strong research activities conducted in the region by vendors and universities to identify potential application areas of AR and VR technology are likely to boost the growth of AR/VR, thus positively impacting the growth of the market in this region. Apart from that, there is a growing interest in virtual healthcare in the metaverse. For instance, XRHealth, a virtual healthcare provider in the metaverse, raised USD 10 million to expand its services on the metaverse. It was funded by AARP, HTC, and Bridges Israel impact investment fund. Therefore, such developments will create new growth opportunities for the vendors in the regional market.
COVID-19 positively impacted the market in North America in 2020. In 2020, time spent on digital media increased by 15% in the US when compared to 2019. Therefore, this further increased the demand for VR/AR platforms, which accelerated the demand for metaverse in the region. In addition, in 2021, widespread vaccination drives led to the resumption of end-user industries activities which further fueled the regional market. Additionally, the economic condition showed a sign of stability, which, in turn, enhanced the IT sector growth in the region. Therefore, such factors are expected to foster growth in the regional market.
The report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027.
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Metaverse Market Scope |
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Report Coverage |
Details |
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Page number |
161 |
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Base year |
2022 |
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Historic period |
2017-2021 |
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Forecast period |
2023-2027 |
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Growth momentum & CAGR |
Accelerate at a CAGR of 40.06% |
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Market growth 2023-2027 |
USD 1,152.35 billion |
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Market structure |
Fragmented |
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YoY growth 2022-2023(%) |
39.12 |
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Regional analysis |
North America, Europe, APAC, South America, and Middle East and Africa |
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Performing market contribution |
North America at 39% |
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Key countries |
US, Canada, China, Germany, and UK |
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Competitive landscape |
Leading Vendors, Market Positioning of Vendors, Competitive Strategies, and Industry Risks |
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Key companies profiled |
Accenture Plc, Active Theory LLC, Animoca Brands Corp. Ltd., ByteDance Ltd., CL Educate Ltd, Decentraland, Devden Creative Solutions Pvt. Ltd., Epic Games Inc., GoMeta Inc., Infosys Ltd., Magic Leap Inc., Meta Platforms Inc., Microsoft Corp., Mobiloitte Technologies, NexTech AR Solutions Corp., NVIDIA Corp., Queppelin, Tencent Holdings Ltd., Unity Software Inc., Wilkins Avenue AR, and Roblox Corp. |
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Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and Market condition analysis for the forecast period. |
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Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Device
7 Market Segmentation by Component
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
Research Framework
Technavio presents a detailed picture of the market by way of study, synthesis, and summation of data from multiple sources. The analysts have presented the various facets of the market with a particular focus on identifying the key industry influencers. The data thus presented is comprehensive, reliable, and the result of extensive research, both primary and secondary.
INFORMATION SOURCES
Primary sources
Secondary sources
DATA ANALYSIS
Data Synthesis
Data Validation
REPORT WRITING
Qualitative
Quantitative
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