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The Metaverse Market size is estimated to grow by USD 1,152.35 billion at a Compound Annual Growth Rate (CAGR) of 40.06% between 2022 and 2027. Primary factors to drive the 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 current market share is witnessing a notable surge in consumer adoption, primarily driven by the increasing popularity of online gaming. The metaverse refers to a virtual, communal digital space where individuals can come together, participate in gaming activities, and socialize, using cartoonish 3D avatars to navigate through various virtual environments. With the growing demand for these immersive experiences, the metaverse is rapidly expanding.
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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 rise of blockchain as a service is a key factor driving the market share growth. BaaS, short for Blockchain-as-a-Service, is a cloud computing solution designed to facilitate the management of distributed ledger systems. Developed collaboratively by Microsoft and ConsenSys, Ethereum BaaS (EBaaS) serves as a cloud-based blockchain developer environment. This innovative solution allows developers to utilize the Microsoft Azure cloud computing platform to efficiently manage and create blockchain applications. For added functionality, EBaaS supports the integration of features like Cortana Analytics and CRM Online for Government (CRMOL).
Microsoft is making BaaS available to corporate entities and application software developers seeking to engage in blockchain development. As a scalable and flexible platform, BaaS offers an efficient and cost-effective way for enterprises to manage their distributed ledger technologies. This factor is expected to fuel the adoption of blockchain technology and subsequently contribute to the growth of the global market throughout the forecast period.
Rising consumer spending across virtual concerts is a significant market trends. Virtual concerts and entertainment for broadcasting events are experiencing an increase in consumer spending, which is driving market growth. According to the India Brand Equity Foundation Organization (IBEF), the media and entertainment business in India reached USD 19 billion in 2020 and is predicted to reach USD 25.9 billion by 2023. Digital venues incorporating VR headgear and AR technology host media and entertainment events and concerts.
The industry is moving forward due to the growing demand for virtual events, as well as a rise in the number of people attending concerts and events. The Department for Culture, Digital, Media, and Sport in the UK reported that immersive technologies like AR and VR, which reached around USD 128.36 billion in 2020, are evolving rapidly. These factors will contribute to the growth of the global market during the forecast period.
Limitations of AR and VR technology are major challenges restraining the growth of the market. AR and VR face various limitations impacting their mainstream adoption. Hardware issues include bulky and expensive AR headsets, often tethered to computers, limiting convenience. Mobile AR on smartphones and tablets struggles with displaying visuals accurately. Lack of regulations poses risks of malicious use, like data mining and content manipulation. Consumer awareness of AR and VR benefits remains low despite popularity among tech experts. Additionally, AR applications can be dangerously distracting, leading to physical injuries, as seen with Pokemon Go. These limitations could impede the market's growth during the forecast period.
The market growth analysis 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 market forecasting report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Customer Landscape
Companies 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.
Tencent- The company offers metaverse such as roblox metaverse with third party companies.
The market growth and forecasting report also includes detailed analyses of the competitive landscape of the market and information about 15 market companies, including:
Qualitative and quantitative analysis of companies 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 companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies 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 companies like Meta Platforms, Inc., NVIDIA Corp., and Microsoft Corp., growing investments in AR technology from key compnies, 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 companies 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 companies in the regional market.
The metaverse market is rapidly evolving, encompassing a diverse array of technologies and applications. Revenue forecasts indicate exponential growth, with AR, VR, and MR leading the charge. VR headsets dominate, but MR headsets are gaining traction, along with HUDs and HMDs. Industries like healthcare and aerospace are embracing XR applications for experiential training, from medical simulations to flight training. However, concerns about health, privacy, and cybersecurity persist. Challenges such as virtual sickness and myopia plague users, while low resolution and electromagnetic radiation raise health concerns. Consulting services cater to businesses navigating this complex landscape, addressing user pain points and devising revenue streams.
The market research and growth research 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.
Metaverse Market Scope |
|
Market Report Coverage |
Details |
Page number |
161 |
Base year |
2022 |
Historic period |
2017-2021 |
Forecast period |
2023-2027 |
Growth momentum & CAGR |
Accelerate at a CAGR of 40.06% |
Market growth 2023-2027 |
USD 1,152.35 billion |
Market structure |
Fragmented |
YoY growth 2022-2023(%) |
39.12 |
Regional analysis |
North America, Europe, APAC, South America, and Middle East and Africa |
Performing market contribution |
North America at 39% |
Key countries |
US, Canada, China, Germany, and UK |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
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. |
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. |
Customization purview |
If our market growth and trends report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
We can help! Our analysts can customize this market research report to meet your requirements. Get in touch
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
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