The metaverse has become one of the hottest buzzwords in technology. But what exactly is the metaverse, and how big could it really become?
In simple terms, the metaverse refers to a set of interconnected, persistent virtual worlds focused on social connection. This network of 3D virtual environments seeks to essentially mimic aspects of real-world social experiences and economies in digital form.
The potential scope of the metaverse is staggering – some estimates peg it becoming an $800 billion market by 2024. To put this in perspective, that is close to triple the size of the entire global gaming market today.
Other predictions have the metaverse economy surpassing $1 trillion within the next 10-15 years if adoption continues at its current pace. That would make it one of the largest markets on the planet – similar in scale to the mobility or healthcare industries today.
How Did We Arrive at the Metaverse Concept?
The ideas behind an expansive, immersive virtual world serving as an extension of daily life have been circulating in science fiction and tech circles for decades.
Concepts like the OASIS from Ernest Cline‘s novel Ready Player One or the virtual realities from movies like The Matrix painted vivid pictures of such virtual worlds long before the capabilities to power them existed.
The term "metaverse" itself was actually coined back in 1992 by author Neal Stephenson in his sci-fi novel Snow Crash. It described people escaping a dystopian reality into a virtual one rich with agency, ownership, and economic opportunities – themes that carry into current visions.
In recent years, several technology leaps have finally brought the promise of metaverse experiences closer to reality:
- Rapid advancements in extended reality (XR) tech – VR/AR headsets, haptic devices, omnidirectional treadmills and other gear now allow more immersive and multi-sensory virtual environments than ever before.
- Explosion of gaming & social networks – Platforms like Roblox, Epic Games‘ Fortnite and Meta‘s Horizon Worlds demonstrate people‘s desire to interact virtually and are proto-metaverse examples.
- Maturing blockchain, digital assets & creator economies – Emergent tech like blockchain and NFTs allows unique digital ownership models – a key piece of creating true in-world virtual economies.
Bolstered by these tailwinds and facing plateauing growth in current product lines, many of the largest technology companies like Meta, Microsoft, Apple and Google have now made building towards the metaverse vision a strategic priority.
Their behind-the-scenes work has increased mainstream knowledge of and interest in the metaverse exponentially in just the past year alone.
But how big can this still largely conceptual idea of persistent virtual worlds interconnected really become? Let‘s analyze what market experts and metaverse pioneers predict.
Metaverse Market Size Projections
Given the nascency of the metaverse concept, estimates on total addressable market vary. In a emerging industry study, business consulting firm McKinsey sized the potential value across multiple categories:
Based on their projections, the market for the metaverse economy could reach nearly $5 trillion by 2030 across various hardware, infrastructure, services, commerce and creator/user spending. And this represents what they view as a conservative range given the rapid pace of development.
To put that massive figure in perspective, the global economy as a whole today is estimated at around $100 trillion currently.
Bloomberg Intelligence stripped scope down more narrowly to focus on monetization strictly tied to heavier metaverse interactions like full virtual worlds and gameplay – less so than casual AR experiences. With that framing, they still sized the market opportunity reaching $800 billion by 2024.
Breaking down their estimate:
- Over $400 billion – Video game industry software, hardware and services
- Around $200 billion – Live entertainment and events in virtual worlds
- Nearly $200 billion – Virtual advertising, digital products/assets and social media adjacent to metaverse worlds
Other analysis I‘ve seen shows projections ranging anywhere from $400 billion to $1 trillion+ for the metaverse by 2030. But all agree the scope has potential to transform multiple existing industries while creating entirely new ones.
Key Industries the Metaverse Could Impact or Create
At a high-level, consultants Bain & Company grouped metaverse use cases and market impacts into 5 main sectors:
Social – Enriching how people interact, date, learn, collaborate and more in virtual settings
Entertainment – Redefining media, live events, concerts, theme parks and other leisure experiences
Gaming – Evolving gaming hardware, software, platforms into more immersive environments
Ecommerce – Developing virtual stores, digital assets/goods and new innovation labs
Work Collaboration – Supporting hybrid work with more engaging and productive virtual meeting spaces
Based on their analysis, social and entertainment collectively represent over $270 billion of current market spending that could translate to metaverse-specific domains over the next 5-10 years.
Gaming and ecommerce also combine for over $200 billion in market impact as buying behaviors, digital ownership models and development efforts adapt to metaverse-centric visions.
Let‘s break down examples for a couple of the most likely impacted industries…
Virtual Events & Entertainment
As highlighted in the Bloomberg market sizing estimate earlier, virtual concerts, festivals and other live event experiences are expected to explode within metaverse environments.
There are already small examples demonstrating people‘s willingness to spend on such experiences today:
- Travis Scott held a concert within the game Fortnite in 2020 that drew 27 million viewers live.
- Ariana Grande held a virtual concert on Roblox which saw over 50 million visits in just a few months.
- Events firm Autograph sold over $2 million in NFT "tickets" to access various virtual events last year.
As the environments and event production tools improve, the intersection of music, entertainment and the metaverse could surpass $100 billion alone by 2030 per Goldman Sachs estimates. Celebrity appearances via digital avatars, virtual merchandise exclusives and bespoke concert experiences could transform this sector.
Source: Goldman Sachs
Retail & eCommerce
Virtual goods and digital assets already drive billions in sales activity today, predominately around gaming skins and collectibles. But there is rising adoption happening through virtual worlds and metaverse-specific ecosystems.
For example, over $500 million was spent last year in Roblox on collectible accessories, avatar outfits and other virtual items. High-end fashion brands like Gucci and Ralph Lauren are also experimenting with digital garments and NFTs.
As more baseline ecommerce shifts to incorporate AR/VR elements over this decade, the ecommerce TAM could see $1.6 trillion in market value gravitate towards various metaverse interactions per McKinsey.
Apparel, accessories, collectibles and digital assets will lead this revolution – transforming retail in the process. Just as mobile acted as a catalyst and point of differentiation for commerce leaders in the 2010s, the metaverse promises to spur similar disruption in innovative shopping experiences.
How Big Tech and Startups Are Evolving for the Metaverse
Given massive market potential on the table, all the tech juggernauts and most sizeable startups have initiated metaverse roadmaps and investment priorities.
Meta (formerly Facebook) is front and center here – going so far as to rebrand their company name to reflect focus on building virtual community tools. Their $10 billion per year R&D budget focuses heavily on augmented and virtual reality through divisions like Facebook Reality Labs.
Products like Meta Quest headsets and Horizon Worlds social platform provide a launching pad to own the social metaverse realm – where they aim to ultimately have 1 billion users.
Microsoft sees the metaverse interfacing heavily with workplace tools and productivity. Features in Teams, SharePoint, Mesh and Dynamics 365 involving avatars, digital twins of offices/factories, and collaborative 3D spaces demonstrate one foot firmly planted in bringing the metaverse to enterprises.
On the consumer side, Microsoft‘s pending $68 billion acquisition of gaming giant Activision Blizzard similarly helps them assemble key Franchises and infrastructure for entertainment-focused metaverse worlds.
Apple has been more quiet to date – but is assumed by experts to have major augmented reality glasses in the works. Their strength in wearables, tight hardware/software integration and ecosystem lock could allow a compelling high-end offering for consumers.
Google is investing heavily in augmented reality (AR) with tools through its Google Cloud offerings and lightweight glasses via programs like Project Iris. While Google scales enterprise AR adoption, it reportedly has a separate VR headset in development to appeal to 3D virtual world use cases as well.
Nvidia provides much of the advanced GPU hardware powering metaverse experiences behind the scenes while also offering software tools like Omniverse – used by the likes of BMW and John Deere to create "digital twin" simulated factories and build realistic virtual collaboration spaces.
And countless venture capital funded startups chase niche elements of the metaverse vision – next generation VR/AR headsets, haptic gloves, blockchain asset trading services, 3D design software and more.
Investment funding into this arena accelerated greatly in 2022, topping $120 billion – more than tripling the prior year:
So in summary – all major players in tech clearly believe the metaverse opportunity to create the next computing platform and entirely new market categories will in aggregate reach trillions in value.
Conclusion – Brace Yourself for the Coming Metaverse Wave
As this overview shows – predictions for the size of the metaverse economy vary from hundreds of billions to trillions over the next decade. But all agree on staggering impact potential to transform gaming, events, shopping, social, collaboration, manufacturing and essentially every other facet of daily life in modern societies.
And given the technical infrastructure being built currently by juggernauts who have driven past decade shifts like mobile, cloud and AI – rapid metaverse adoption seems nearly inevitable.
The open questions center more on the timing, phases and ultimate prioritization of consumer versus enterprise focused worlds as this future unfolds.
But without question, companies small and large need to brace themselves for the coming metaverse wave. Within this decade, new device capabilities, blockchain-based ownership models, augmented shopping experiences, holographic offices spaces, and VR-specific social networks promise to redefine what we consider "virtual" at all.
Our physical and digital realities stand to blend together into expansive environments far beyond what sci-fi dreamed up. So buckle up, the next tech revolution starts now!
I‘m eager to hear your thoughts and predictions on this industry in the comments below!