How do you define something that doesn’t exist? This is the challenge posed to tech analysts, pundits and thought leaders who future-gaze into the eyes of the metaverse. It’s as exciting as it is ill-defined….which represents both opportunity and mass confusion.
Our research arm ARtillery Intelligence first shunned “metaverse mania,” before getting caught up in the possibilities (to a degree) around a more dimensional internet. But as we examined recently, the metaverse evades all disciplined market-sizing and revenue forecasting.
However, that doesn’t mean it should be ignored. Though we’re likely in a bubble that bursts when overblown metaverse expectations don’t materialize in the near term (consumers and generalist media are impatient), it doesn’t mean there aren’t legitimate principles to flesh out.
To us, those principles come down to building blocks. For example, AR and VR are tied up in – but also independent of – all the metaverse exuberance. They’ll continue to make meaningful and quieter strides that have standalone value after this wave of metaverse mania crests.
So what are those building blocks? And how do they fare today in positioning and revenue outlook? These are questions ARtillery Intelligence tackled during AWE’s recent ‘Rock the Metaverse” event. It’s the focus of this week’s XR Talks with video and takeaways below.
For many of the above reasons about the metaverse’s early and nebulous state, it’s sort of a fool’s errand to try to define it. But one thing we can do is start to put our finger on metaverse principles or qualifiers that we want to aim for. Can we cherry pick the best of today’s web?
For example, there’s consensus that the metaverse needs to be embodied or rendered in 3D. And it needs to be synchronized in time but placeshifted for far-flung participants. There’s also the oft-invoked “I” word: it should be interoperable and not owned by any one entity.
When looking at these and other common metaverse targets, one could argue that we already have a metaverse….it’s called the web. It hits most of the above marks except that it’s primary state isn’t 3D. But we bring up the web here because it’s the right model or metaphor in lots of ways.
Though a prospective metaverse could have different standards — required for 3D rendering, processing and throughput — the principle of standardization and interoperability could remain. In that way, the metaverse could be the next iteration of the web, rather than its replacement.
Also like the web, a metaverse tech stack will have to develop. And many of those pieces will be similar to what we have today (networking, connectivity, content & services, etc), while some will deviate to a degree (game engines, hardware/access devices, crypto, etc.).
Moving from the above 40,000 foot view of metaverse aspirations to the main exercise – market sizing – how big could it be? Again, it’s hard to do revenue modeling for something that doesn’t exist. Some firms are throwing out trillion-dollar figures….and they very well could be right.
To take a middle path somewhere between sizing the undefined and copping out of market sizing altogether, we can quantify some metaverse components and building blocks that do exist today. That’s everything from game engines to networking & connectivity to AR & VR.
For this exercise, we’ll zero in on the latter, which is admittedly only one slice of the metaverse pie. For example, what’s the revenue outlook in mobile AR, headworn AR, and VR? These each consist of different market factors and signals, broken down in ARtillery Intelligence forecasts.
So what are the highlights? When adding up all the pieces of the spatial computing spectrum above, they’re estimated at almost $35 million in revenue this year, growing to almost $65 million by 2025. This contains a mix of hardware, software, consumer, enterprise and enabling tech.
Diving into just the mobile AR portion, it’s projected to grow from $9.5 billion last year to $26 billion by 2025. That consists of several sub-categories such as AR ad placement (e.g. sponsored lenses), which is projected to grow from about $2 billion last year to $6.7 billion by 2025.
Moving on to headworn AR, it’s projected to grow from $4.7 billion last year to almost $18 billion in 2025, and like mobile AR, this consists of several subsectors and moving parts. Meanwhile VR is projected to grow from about $9 billion last year to more than $22 billion in 2025.
So there you have it….one small corner of the metaverse, quantified in its current state. We’ll pause there to cue the full video below and circle back with more metaverse clues as they materialize…