Market Overview

The estimated domestic metaverse market size (total value of platform, contents, infrastructure, etc. and XR [VR, AR, MR] devices) for FY2022 has risen to 173.6% of that of previous fiscal year to 137,700 million yen and to 285,100 million yen for FY2023, 207.0% of the size of FY2022.

Until FY2022, there were proactive investment and various attempts done for the metaverse by those enterprises that tentatively entered the business and those that showed high interest in new technology. Municipalities and the administrations also participated in the attempts of the metaverse applications and provided various metaverse-used services for diverse fields. As the market had not been formed, the businesses from various industries focused on invigorating the market rather than competing and worked together in various demonstrations. The metaverse, that had slowly gained moderate awareness, was suddenly in the status of what could be called as a “fanatic boom”.

In FY2023 the boom has quietened down while the special situation of remote working amid the corona crisis has vanished. Such changes could be said as being ready to accelerate the business development for those enterprises that seriously considered the metaverse application. As business models for each enterprise have become clear and the market environment has been ready, growing numbers of enterprises have shown favorable performance. Such a trend has increased the expectation on full-scale expansion of the metaverse market.

Noteworthy Topics

Market Topics: Artificial Intelligence (Generative AI, etc.) and Metaverse

The metaverse, where vast amounts of data are daily accumulated in the three-dimensional (3D) space, has high affinity with artificial intelligence (AI) that is likely to be the accelerating factor for the use of the metaverse. Many businesses providing services in the metaverse are developing various studies on AI.
Those businesses that provide services by processing large-scale data by means of AI are likely to increase. Effective applications of AI technologies including large language models (LLMs) represented by ChatGPT and generative AI may bring about cost reductions for customer service, counseling, 3D model production, etc. in the metaverse, and as natural conversations and responses are attained, the demand is expected to escalate.
Still, many issues must be solved for AI applications for the business with enterprises, such as copyright infringement and credibility (i.e., incorrect responses, inadequate expressions, responses that include prejudice, etc.) Securing of the safety seems to be the pre-requisite for application and spreading of AI.

Future Outlook

The domestic metaverse market is likely to first see the growth of the enterprise metaverse market where increasing numbers of companies utilize the metaverse as the next-generation platform, after which the consumer metaverse market geared to general consumers to expand with gradually growing users. The entire domestic metaverse market is projected to exceed two trillion yen by FY2027.

When observing the market by company and field, the needs for contents production for the metaverse is projected to increase. If the creator economy (the market for individual creators to provide their creations and to make profits) is formed, distribution of digital contents thrives, expanding the sales at metaverse platformers (enterprises that operate the platform).
In addition, as the market grows, demand for infrastructure technology that support systems for the metaverse, such as 3D environment creating engine, cloud, XR, NFT, AI technologies, is likely to spike,.
As for XR (VR/AR/MR) devices, those for the metaverse services are likely to be popular at first when used with existing smartphones or PCs, and then later, from a certain period, more advanced XR devices are expected to spread, dominating the consumer metaverse, and expand the sales of device manufacturers.

Research Outline