Metaverse Market Size, Share and industry Report [2031]

Report Description

Metaverse Market Outlook 2031

The global metaverse market size was valued at USD 77.54 Billion in 2022 and is expected to reach 1622.77 Billion by 2031 expanding at a CAGR of 40.2% during the forecast period, 2023–2031. The growth of the market is attributed to the rising focus on integrating the physical and digital worlds using the internet.

The word, metaverse, refers to an extremely immersive 3D virtual world created by combining technologies, including augmented reality, mixed reality, and virtual reality. It helps create a virtual environment in which users engage in immersive games, socialize, and sell and buy virtual real estate.

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Metaverse is a popular technological platform that is drawing many social networks, technology leaders, and online game developers to enter and build a presence in the market.

According to industry analysts, the metaverse is expected to permeate a wide range of businesses in the future years, with the potential market opportunity or total addressable market valued at more than USD 1 trillion in annual sales.

NVIDIA Corporation released cutting-edge software for artists. The business intends to give individual artists a free advanced version of Omniverse software to develop virtual worlds. The company plans to charge USD 9,000 per year for corporate and individual consumers.

The COVID-19 pandemic was a major factor in generating interest in the metaverse. People began working from home, and students began attending classes online, necessitating the development of practical procedures or channels to make online communication realistic. The pandemic increased its relevance among both consumers and corporations.

In 2020, tech companies began developing and investing in this technology. 2021 was a good year for technological investments in the metaverse, due to high investments made in the metaverse. According to industry analysts, the post-pandemic environment is expected to boost customer interest in the metaverse.

Artificial Intelligence (AI) impact on Metaverse Market

Metaverse Market Dynamics

Major Drivers

The increasing use of cryptocurrency to acquire digital assets is anticipated to drive the market. Cryptocurrencies are an essential part of the virtual world as they are used to buy clothes, land, and various other things.

Metaverse and cryptocurrency are connected to fulfill the need for virtual currency in digital space. Several metaverse companies are partnering with blockchain tech companies to serve users the freedom to purchase NFTs or in-game currencies.

• For instance, in June 2022, Star Atlas, a next-gen metaverse with triple-A game design and Unreal Engine 5 graphics built on the Solana blockchain announced the partnership with MoonPay, which enables players to purchase NFTs and in-game currency ATLAS (Star Atlas) instantly with a credit card. Moonpay is the leading global crypto payments infrastructure provider and will be responsible for facilitating fiat-to-crypto payments within the Star Atlas ecosystem.

Rising demand for sophisticated VR devices from small, medium, and large-scale companies, and individual customers is expected to boost the market. VR devices have a crucial role in spurring small businesses.

It offers small organizations to reach new customers virtually and promote their businesses. With the help of VR devices businesses can create different avatars to communicate with customers. It lessens the costs of small businesses by reducing physical infrastructure needs.

Existing Restraints

The threat of cyber-based attacks is expected to hinder the market growth during the forecast period. Security concerns related to privacy are becoming a major concern. In the metaverse, hosts collect a large amount of data and monetize them. Thus, there is a threat of the data being stolen which is expected to hinder the market. 

Moreover, inadequate knowledge of service and security options is anticipated to hamper the market expansion. Lack of proper knowledge of handling the services is expected to impede the growth of the metaverse market as this leads to cyberattacks and other related activities.

Emerging Opportunities

Technological advancements and business-to-consumer and business-to-business firms are creating lucrative opportunities for market growth. Metaverse is upgrading with cutting-edge technologies including the Internet of Things (IoT), head-mounted displays (HMDs) AR Cloud and 3D reconstruction, and many more.

Metaverse technology is more likely to employ a combination of AR and VR, popularly called Extended Reality (XR). Development in AI, machine learning, and IoT is expected to offer tremendous functions like limitless interactions and integrations of data.

Scope of Metaverse Market Report

The market report includes an assessment of the market, trends, segments, and regional markets. Overview and dynamics have also been included in the report.

Metaverse Market Segment Insights

Technology Segment Analysis

On the basis of technology, the metaverse market is segmented into mixed reality, virtual reality & augmented reality, and blockchain. The virtual reality & augmented reality segment is projected to expand at a considerable CAGR during the forecast period, due to increasing use of metaverse in the gaming industry.

In the gaming industry, AR and VR technology are used to make games realistic and deliver an optimal gaming experience. The mixed reality segment is anticipated to account for a major market share during the forecast period.

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Platform Segment Analysis

In terms of platform, the market is divided into mobiles, desktop/ laptops, and wearables. The desktop/laptop segment is expected to hold a significant share of the market in the coming years. Rising demand for massive virtual screens where users can watch movies, play games, surf the web, and design artwork is boosting the segment.

• For instance, in March 2023 NVIDIA announced six new NVIDIA RTX™ Ada Lovelace architecture GPUs for laptops and desktops, which offers creators, engineers, and data scientists to meet the demands of the new era of AI, design, and the metaverse.

The mobiles segment accounts for a significant market share, as mobiles are quickly becoming common means to connect to the metaverse. Moreover, the development of new applications for mobile devices by market players is boosting the segment.

• For instance, in May 2023, DatChat Inc. launched the initial version of its Habytat open mobile metaverse through its SmarterVerse, Inc. subsidiary. Habytat version 1.0 offers users free NFT-deeded properties and houses.

Component Segment Analysis

Based on component, the metaverse market is bifurcated into software and hardware. The software segment is further classified into 3D mapping and modeling construction, metaverse platforms, financial platforms, and extended reality software. 

The software segment is expected to expand at a high rate during the forecast period, owing to the use of progressive software and the presence of key players in the market. Moreover, metaverse offers fintech companies various opportunities to develop user experience using 3D and AI avatars. The avatars created using AI work as VR advisor who offers individualized financial guidance to the consumers. It further helps financial platforms to form several financial platforms related to payments and other activities.

• For instance, in October 2022, as part of the participation of Ajman's Department of Finance (ADF) under the umbrella of the Ajman Government Pavilion at GITEX Global 2022, launched the first government payment platform on the Metaverse as well as the first service to register suppliers. The Ajman Payment Platform (AjmanPay) is the first unified government payment platform that enables fee collection for the services of local government agencies in Ajman on the Metaverse.

The hardware segment is expected to be the fast-growing segment during the forecast period, due to the increasing adoption of advanced AR/VR devices. For instance, in June 2023, Mark Zuckerberg announced Meta Quest 3, the next-generation virtual and mixed reality headset, which launches by the end of the year. It features higher resolution, stronger performance, breakthrough Meta Reality technology, and a slimmer, more comfortable form factor.

Application Segment Analysis

On the basis of application, the market is fragmented into online shopping, content creation, gaming, social media, and others. The gaming segment is expected to dominate the market in the forecast period, due to substantial advances and rising emphasis on immersion to make games realistic. 

• For instance, in July 2023, McDonald’s Hong Kong revealed McNuggets Land, an official world that’s available in The Sandbox, an Ethereum-based metaverse game.

The social media segment is expected to grow rapidly. During the COVID-19 pandemic, the internet and social media were crucial in daily life, creating high demand for content development. Many firms increasingly use content production to sell their brands and product portfolio to gain a competitive edge.

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End-user Segment Analysis

In terms of end-users, the metaverse market is categorized into education, aerospace & defense, media & entertainment, real estate, healthcare, engineering, and others. The media & entertainment segment is expected to grow significantly during the forecast period, owing to growing gaming industry globally. Organizations are increasingly focused on hosting virtual music and gaming performances, which is expected to promote revenue growth.

The real estate segment is anticipated to hold a considerable share of the market during the forecast period, due to a large number of emerging companies that acquire, resell, create, and rent virtual properties. 

• For instance, in April 2023, ProprHome, a Portugal-based blockchain-powered real estate marketplace, announced a partnership with a US-based metaverse company, Odyssey. With the partnership, ProprHome is expected to offer a more trusted and convenient real estate experience, building on its mission to provide property developers and agents with a new way to earn trust and credibility in every sales interaction.

Regional Analysis

In terms of region, the metaverse market is classified as Asia Pacific, North America, Latin America, Europe, and Middle East & Africa. North America is expected to constitute a key share of the market during the forecast period, as clients and users in the region are embracing new and complicated technologies.

The market in Asia Pacific is anticipated to expand at a rapid pace during the forecast period, due to the growing number of start-ups and organizations in the region, including The Sandbox in Hong Kong, NextMeet in India, Axie Infinity in Singapore, Shenzhen Zhongqingbaowang Interaction Network Co., Ltd. (ZQGame Global), and miHo.

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