Global metaverse market likely to reach $996 bn in 2030

The global metaverse market size was valued at USD 22.79 billion in 2021 and is expected to grow at a compound annual growth rate (CAGR) of 39.8% during 2022-2030. A metaverse is a virtual world where users share experiences and interact in real-time within simulated scenarios. It is still largely conceptual but could transform how people work, shop, communicate, and consume content. Although it is in the early stages of development, it has the potential to be the next mega-theme in digital media.

Metaverse encompasses nine critical technologies: Networking equipment and cloud infrastructure, Data governance and security, Blockchain and cryptocurrencies/NFTs, AI/ML, AR and VR, AdTech (Internet advertising), Gaming, Enterprise applications, and Payments Platforms.

The hype around the metaverse is largely focused on consumer use cases. Gaming and social media companies are at the vanguard, but enterprises will lead the charge in the next five years. This shift will be driven by the future of work and digital transformation initiatives ongoing across sectors ranging from retail to healthcare and financial services. Big Tech is championing the metaverse, with Microsoft and Meta promoting it as the ideal environment to support hybrid working.

According to GlobalData estimates, the global metaverse industry will grow from USD 22.79 billion in 2021 to USD 996.42 billion in 2030 at a CAGR of 39.8% from 2022 to 2030. It is the next big theme in digital media, and VR & AR are crucial technologies driving its development. These two technologies will make the metaverse immersive and allow users to interact with virtual objects, people, and environments.

The metaverse market research report provides an executive-level overview of the current market worldwide, with detailed forecasts of key indicators up to 2030. The annual report provides a detailed analysis of the near-term opportunities, competitive dynamics, and evolution of demand by verticals and component stack across key regional and country markets. The study also captures a detailed overview of key dynamics including technology, and regulatory trends, among others with their current as well as the expected impact on the overall demand.

Vertical Insights
The metaverse market revenue opportunity has been assessed for verticals including BFSI, Retail, Education, Media & Entertainment, Aerospace & Defense, Manufacturing, and others

Banking, Financial Services and Insurance (BFSI) market: Banks such as JP Morgan and HSBC have already entered the metaverse via Decentraland The Sandbox, respectively. JP Morgan opened a customer lounge named Onyx to boost social engagement while HSBC purchased a plot in The Sandbox, aiming to use it to engage with sports, esports, and gaming fans. Trading start-up eToro offers MetaverseLife, a smart portfolio for investors interested in stocks, cryptocurrencies, and other projects within the metaverse. BFSI is anticipated to witness high growth over the forecast period, accounting for sizeable share of the revenue opportunity in 2021

Many banks already offer digital assets/custom platforms that can be stretched to support the requirements of the virtual world. Banks can expect to develop their private virtual world platforms, support new products and even marketplaces, and bind them back to traditional infrastructure.

Retail market: Retailers and brands are already thinking about how this technology is going to impact their business by building relationships and understating their experience and the product they prefer to buy. Big brands have realized the opportunity, Gucci partnered with Roblox during the pandemic and created a Gucci garden, featuring games that allowed users to win limited-edition Gucci accessories. It has also sold the limited-edition Dionysus Bag for $4,100 in Robux (the virtual currency in Roblox), exceeding the price of a real bag. Gucci is also active on The Sandbox and Decentraland with NFTs and virtual land.

Media & Entertainment market: Web 2.0 connected people that has changed many things such as social media, we are moving towards Web 3.0 which connect people, places, and things. Sometimes people, places, and things can be in a fully virtual synthetic environment, or it could be our world with some level of augmentation. Metaverse is a lot broader, it is a conversion of physical and digitally enabled by many different technologies like AR, VR, AI, 5G, and blockchain.

Although the market is in the nascent stage, it would be important for retailers and brands to recognize the potential impact of this technology and particularly in the evolution of consumer wants, desires, and expectation but also the impact on their business model.

Component Stack Insights
The global service addressable (SAM) market is categorized into hardware, software & services. The hardware segment encapsulates market size for cloud infrastructure, 5G infrastructure, headsets, wearables, IoT and other mobile devices. VR headsets are expected to witness rapid proliferation with prototypes emerging. For instance, Meta’s reality lab division showcased a plethora of prototypes guiding a roadmap towards VR graphics. Although not commercial yet, the hardware segment with prototype development poses a lucrative revenue opportunity for the overall metaverse industry during the forecast period. The speed and commitment of headset hardware vendors is an indicator of metaverse acceleration, creating opportunity for metaverse hardware market segment.

There will be a lot of new hardware over the next few years, but there does not seem to be a hardware contender that would instantly make the metaverse relevant, à la iPhone. The importance of headsets cannot be understated, and as a result we have an unfortunate dearth of reliable information from major players.

The software service addressable market is also expected to witness rapid growth during 2022 to 2030. The segment primarily encapsulates, platforms/software including Artificial Intelligence (AI), Augmented Reality (AR), Virtual Reality alongside 3D & spatial tech, blockchain, virtual worlds and games. Alongside virtual reality (VR), AR is central to the metaverse, one of the themes that will dominate 2022.

Regional Insights
North America market is expected to capture a sizeable revenue share of the overall market in 2021. An increase in number of startups is developing technology to support the metaverse revenue. Although consumer aware is still low, the region with its massive technology penetration is anticipated to witness rapid growth over the forecast period.

Key Players & Market Share Insights
The key players include Nvidia, Meta, and Microsoft, among others. The last two years, since the start of the COVID pandemic in early 2020, have seen many mergers and acquisitions (M&A) spurred by the widespread move to remote work. The report covers M&A deals involving Metaverse companies. In January 2022, NFT Investments specializing in the market for non-fungible tokens (NFTs) announced acquisition of Pluto Digital Assets, a crypto technology and venture company.

There’s a land grab going on for strong metaverse ecosystem partners and learnings. Telcos are, by and large, keen to understand the lay of the land and invest in exploration with startups as potential partners. M&A activity is picking up, with access to technology being the key rationale for most deals. Providers of AR, VR, AI, and blockchain solutions are becoming prime targets as acquirers aim to develop novel experience.

CT Bureau