The Metaverse is a vision of an internet-enabled virtual world where people have avatars and interact with digital assets with Augmented Reality (AR), Virtual Reality (VR). And Extended Reality (XR). This is developing rapidly with the evolution of block chain technology. Industry experts believe that NFT is going to be the revenue model for the Metaverse. Presently, virtual items are the revenue model in video gaming viz USD 175 billion business annually Since the Metaverse will have digital avatars, NFTs will enable direct access to real-life identities and digital avatars into the Metaverse NFTs are expected to be used in various metaverse use cases, such as user interaction. Socialization, and transactions. For example, in 201 9, an NFT-based token was used as an entry ticket for NFT NYC event. After the success of this event, many other events started using NFTs as entry- tickets, fuelling the further adoption of NFTs in the Metaverse. With major players, such as Meta and Microsoft, etc., investing in the Metaverse projects are focused on introducing massive transformations for online interaction. For instance, an NFT-based token served as an entry ticket for an event at NFT NYC in 2019. The popularity of this event led to the widespread use of NFTs as admission tickets at additional events, which accelerated the spread of NFTs throughout the Metaverse. Major investors in the Metaverse projects, including Meta and Microsoft, etc., are concentrating on bringing about significant changes for online interaction. For instance, Decentraland makes it possible to buy Metaverse real estate virtually and displays the locations where users have purchased it using land tokens.
The usage of NFTs as currency in the Metaverse, for both transactions and the acquisition and trade of virtual digital assets like virtual property, is another view held by industry professionals. The Metaverse is therefore anticipated to present NFTs with their greatest chance.
Market Overview
The global metaverse market size was USD 63.00 Billion in 2021 and is estimated to exhibit a revenue CAGR of 43.2% over the forecast period. Rising focus on combining digital and physical worlds, quickly growing trends of virtual economic sector and crypto-gaming, and growing popularity of online gaming are significant aspects driving market revenue growth.
Driving Factors
Cryptocurrencies are the standard form of payment in the metaverse, and each metaverse has its own set of coins. They are accustomed to paying for everything, including NFTs, virtual homes, and avatar shoes. The physical and digital worlds are connected through the use of cryptocurrencies. They enable us to determine the value of the digital assets in terms of the money issued by the government as well as the growth of such assets over time. Cryptocurrency purchases through the metaverse are becoming more popular all across the world.
Nowadays, people engage with one other digitally through social networking sites like Facebook, messaging applications, and websites. The metaverse is the advent of novel online environments where users can interact with digital content more deeply and in more multidimensional ways rather than just reading about it. Because cryptocurrency is available on venues all around the world, investors can profit by offering to sell their NFTs and metaverse coins directly to customers.
Restraining Factors
One of the limitations of the metaverse is that its implementation will need the use of cutting-edge technologies. Many commercially available standards and protocols are now available to implementers, but more funding will be required to develop cutting-edge technology. In certain aspects, social ties may be destroyed by the metaverse. Among the selling points is that by providing a more immersive manner of online communication, it may boost the benefits of social media and present web-enabled communication methods. However, a number of people have expressed doubts regarding this purported advantage or benefit.
Opportunities
One of the metaverse’s bright futures is that it will greatly expand consumers’ access to the market in new and frontier economies. Access to previously inaccessible goods and services has already been made possible thanks to the internet. For instance, workers from developing nations could now be able to work in western firms without moving. Virtual reality environments are a cheap and efficient way to learn, therefore they will assist improve educational possibilities. As a consequence of these developments, clear governance will be required. Trade shows, product demonstrations, meetings with clients, customer service, and advertisements are all examples of business-to-business (B2B) marketing. Each of these items can now be significantly altered thanks to the metaverse. Due to the commodity nature of many B2B products, exceptional service to customers could make a huge difference. The merging of B2B and B2C divisions is an intriguing by-product of the metaverse. Businesses could use this to expand their existing customer bases while eschewing corporate customs.
During the COVID-19 pandemic, the market saw increased investments and a greater reliance on digital platforms. Massive potential for new market entrants were made possible by the pandemic. People were placed under partial or total lockdown during pandemic, which substituted internet channels for face-to-face communication. For instance, L’Oreal and the desktop programme Snap Camera cooperated in November 2020 to allow users to enjoy virtual makeup during video conversations using services including Google Hangouts, Google Meet, Houseparty, Microsoft Teams, Skype, Twitch, and Zoom.
Challenges
Regardless of how the metaverse is ultimately implemented, technologies like virtual reality, augmented reality, the internet of things, and cryptocurrency will undoubtedly be utilised. The physical and virtual worlds could converge and synchronise thanks to these technologies. However, they will give fraudsters fresh chances to target both enterprises and people. Some significant factors that are anticipated to restrain the expansion of the global metaverse market’s revenue during the forecast period include worries concerning data security and privacy in these settings, problems with user identity, and difficulties in convincing consumers to use payment services there.
Although there are many virtual worlds available online, moving between them without losing one’s identity or possessions is impossible. In the future, this problem might be resolved by fusing various internet domains into a single, seamless entity. It has even been referred to as the next stage of the Internet.
Segmentation Overview
- Metaverse Product Outlook
- Hardware
- Displays
- eXtended Reality (XR) Hardware
- Haptic Sensors & Devices
- Smart Glasses
- Omni Treadmills
- AR/VR Headsets
- Others
- Software
- Asset Creation Tools
- Programming Engines
- Services
The global market is divided under hardware and software segments based on component. The hardware sector had the biggest revenue share. Chips serve as the metaverse’s primary fuel. NVIDIA delivered a key business update disclosure to the market in November 2021 at its own global industry technology summit GTC conference, stating that it would someday provide fundamental technologies like processors.
- Metaverse Platform Outlook
- Desktop
- Mobile
- Headsets
The global market is divided into desktop and mobile segments based on platform. The desktop sector had the biggest revenue share. With AR/VR headsets like the Oculus Quest, HTC Vive, and Valve Index, a powerful desktop computer with processing and graphics capacity can produce VR experiences which are currently only offered on PCs in high – resolution (up to 4k) and at higher framerates (up to 120 Hz).
- Metaverse Technology Outlook
- Blockchain
- Virtual Reality (VR) & Augmented Reality (AR)
- Mixed Reality (MR)
- Others
The global market is divided into technological segments based on artificial intelligence (AI), virtual and augmented reality (VR & AR), mixed reality, decentralised technologies, human – machine interface, edge computing, and many others. The segment with the major revenue share was virtual and augmented reality. If Metaverse is successful in luring content creators into creative communities with a range of specialties, it may combine the capabilities of virtual reality, augmented reality, mixed reality, and other sorts of human-computer interfaces to create an altogether new dimension of digital life.
- Metaverse Offering Outlook
- Virtual Platforms
- Asset Marketplaces
- Avatars
- Financial Services
The global market is divided into virtual platforms, marketplaces, decentralised finance, digital twins, and other categories based on the offerings. The virtual platform category had the biggest revenue share. To enable individuals and organisations to explore, develop, socialise, and engage in a variety of activities, virtual platforms are immersive, digital, three-dimensional simulations, settings, and surroundings that are created and managed.
- Metaverse Application Outlook
- Gaming
- Online Shopping
- Content Creation & Social Media
- Events & Conference
- Digital Marketing (Advertising)
- Testing and Inspection
- Others
Gaming, media & entertainment, education, travel & tourism, estate development, medical services, banking, financial services & insurance (BFSI), and others are some of the end-use categories that make up the global market. The media & entertainment sector had the greatest revenue share. Customers enjoy an immersive experience when the metaverse is integrated into a wide range of media and entertainment apps because to its 3D capabilities.
- Metaverse End-use Outlook
- BFSI
- Retail
- Media & Entertainment
- Education
- Aerospace and Defence
- Automotive
- Others
Gaming, media & entertainment, education, travel & tourism, real estate, healthcare, banking, financial services & insurance (BFSI), and others are some of the end-use categories that make up the global market. The media & entertainment segment had the greatest revenue share. Customers enjoy an immersive experience when the metaverse is incorporated into a wide range of media and entertainment applications because to its 3D capabilities.
- Metaverse Regional Outlook
- North America
- U.S.
- Canada
- Mexico
- Europe
- U.K.
- Germany
- France
- Asia Pacific
- China
- Japan
- India
- South Korea
- South America
- Brazil
- Middle East & Africa
The market in North America accounted for the biggest revenue share. This is due to an increase in users embracing new and sophisticated technologies. Americans are rapidly accessing and experiencing the metaverse via VR, MR, AR, and other cutting-edge technologies, which pushes them to spend money on tools that would enhance it. Additionally, escalating consumer desire for goods that improve user experiences also contributes to market growth. Additionally, rising investments made by businesses and individuals in such cutting-edge technology and advanced strategies are anticipated to fuel market expansion. Because of its technological sophistication, North America also outperforms all other markets in the creation of cutting-edge technology to be used in display devices.
During the anticipated period, the Asia Pacific market is likely to experience substantial revenue expansion. This is a result of sustained economic expansion and increased digital use in countries like China, India, and Japan. In comparison to other regions, Asia Pacific’s technology businesses, entrepreneurs, and government organisations have adopted technological breakthroughs far more quickly and enthusiastically. The market is also being driven by a strong industrial environment, high commercial value, and technological breakthroughs like gaming, social networking, entertainment, education, and the digitization trend. In addition, a growing number of startups and businesses, such as Sandbox (Hong Kong), Bolly Heroes (India), Axie Infinity (Singapore), NextMeet (India), GuildFi (Thailand), Shenzhen Zhongqingbaowang Interaction Network Co., Ltd. (ZQGame Global), and miHoYo Co., Ltd. In China, are anticipated to fuel market expansion.
Over the course of the forecast period, the Europe market is anticipated to experience moderate revenue growth. In the next ten years, firms in Europe should pay close attention to the metaverse, both from a hardware as well as corporate IT perspective. For instance, Facebook announced its plans to create 10,000 new jobs across the European Union in October 2021. The increase in regional market revenue can also be attributed to the growth of social media platforms’ and the gaming industry’s user bases. The growing online gaming industry is fuelling market expansion in significant European countries like France, Italy, the UK, Germany, and others. Meta platforms are also being used by financial service providers to improve efficiency. AEGLE and Meaningful Integration of Data, Analytics, and Services are two important projects that are expected to have a positive impact on the metaverse industry in Europe.
Competitive Analysis
The revenue generated by a small number of small and medium-sized key players makes up the majority of the metaverse market, which is fairly consolidated. Major businesses are using a variety of tactics, engaging in merger and acquisitions, strategic agreements, and contracts, as well as creating, experimenting with, and introducing more efficient products to the market. Some of the key competitors of the market are:-
- Meta Platforms, Inc.
- Tencent Holdings Ltd.
- ByteDance Ltd.
- NetEase, Inc.
- Nvidia Corporation
- Epic Games, Inc.
- Roblox Corporation
- Unity Technologies, Inc.
- Lilith Games
- Nextech AR Solutions Corp.
- The Sandbox
- Active Theory
- Decentraland
- Microsoft Corporation
- Antier Solutions Pvt. Ltd.