Metaverse revenue forecast through 2028: Market nears $55B in annual revenue

S&P Global Market Intelligence forecasts that worldwide metaverse revenue is on course to grow at a 25.5% compound annual growth rate from $17.50 billion in 2023 to $54.50 billion in 2028, driven by a growing vendor pool delivering an incrementally more capable stack of solutions to increasingly receptive audiences.

Virtual spaces are playing larger roles in the lives of consumers and employees as evidenced by growing operations among the metaverse's early movers such as Roblox Corp. and Siemens AG. The potential of this market is drawing other entrenched media and tech players, such as Apple Inc., Walt Disney Co. and Microsoft Corp.

In other words, the flywheel is in motion, and the metaverse is primed to transition from a solution in search of a problem to a substantive piece of the media and productivity landscape over the five-year forecast.

That said, we are mindful of the metaverse's previous false starts and plateaus. Our model is built on the assumption that user adoption will continue to rise at a steady, if unspectacular, rate. Vendors will have to continuously navigate user expectations and technological limitations to deliver captivating products in this emerging market.

The metaverse is a vision of the next iteration of the internet: a single, shared, immersive, persistent, 3D virtual space where humans and machines interact with one another and with data, enhancing the physical world as much as replacing it.

Our metaverse forecast is designed to capture the revenue driven by virtual 3D spaces that afford users the ability to meet, play and work. The primary drivers in our model are social gaming operations, digital twin services, remote collaboration applications, and augmented reality and virtual reality headsets and smart glasses.

Our model is driven by publicly reported revenue trends and outlooks, proprietary survey data, proprietary broadband and mobile subscription penetration estimates, and other market research.

A look at the metaverse by segment:

• Businesses became the top customers in the metaverse through software and services supporting digital twins and remote collaboration tools in 2022 and cemented that lead in 2023, accounting for 42.8% of the industry.
• Gaming is the second-largest segment in our analysis. Our expectation for metaverse gaming is driven by the growing role that metaverse hubs such as Roblox and Fortnite play in the overall gaming industry.
• We also expect that metaverse hubs and estates will begin to stand up substantial e-commerce and advertising operations over the forecast. As currently configured, we believe that the metaverse may be a more comfortable fit for e-commerce as an extension of the digital goods being purchased on Amazon.com Inc. and Walmart Inc. than it is for display ads.
• Slow sales of AR and VR headsets and a declining average selling price have suppressed hardware revenue, with the segment in decline for two consecutive years. However, we expect hardware revenue to resume growth in 2024 as sales tick up and average selling prices rise with the launch of the $3,500 Apple Vision Pro and as the Meta Quest 3 has its first full year on the market at $500.