Metaverse is one of the most popular buzzwords in the technology world, and this far-reaching vision of the next generation of the Internet will be realized on the entire company ecosystem. We will analyze in depth to explain what the metaverse is, how it is built, and who is building it.
The business world is obsessed with the “virtual world”: a shared world concept driven by highly immersive and interactive virtual products and digital experiences.
We already have a virtual world featuring live concerts and online games where players spend hundreds of hours – but metaverse enthusiasts see a future where the entire society thrives in an online field inhabited by a live person.
Although the field is still in its early stages, its long-term impact may not be trivial. Some users – especially younger users – may end up earning, consuming and investing most of their money in the digital world. According to industry analyst consensus at CB Insights, the metaverse could create a $1 trillion market by the end of the century.
This potential has attracted the attention of participants from all walks of life. Facebook was renamed "Meta" at the end of last year. In the fourth quarter of 2021, the earnings call for Metaverse increased by 4 times year-on-year. Media discussions around this topic have also surged as news media speculated whether the metaverse — and the emergence of a mature virtual economy, including property ownership, corporate offices, fashion seasons, etc. — was ready to be the next big thing in the field of technology, or if it was exaggerated.
The meta-universe is a vision, not a specific technology. For businesses, this ambiguity can make it difficult for you to figure out how to take advantage of the emerging trends represented by the metaverse.
Below, we provide a framework to navigate this evolving theme by breaking down the metaverse into different technical layers and highlighting the major suppliers dedicated to making the metaverse a reality.
Note: Supplier selection is based on a wide range of criteria – including funding, business relationships, market visibility and CB Insights’ proprietary evaluation score. This market map is not exhaustive. Categories are not mutually exclusive and companies are sorted by their main use cases.
This report focuses on private companies, but also includes some selected subsidiaries, exit companies and publicly listed companies platforms to provide market context.
infrastructure (network and computing)
meta universe needs a computing and processing infrastructure that can support both big data streams and low latency. Technologies emerging in categories such as chips and processors, 5G, cloud infrastructure and edge infrastructure are critical to creating seamless, latency-free experiences in the virtual world.
chip and processor: Advances in this field of will support the intensive computing and processing requirements of metacosmic applications.
New virtual reality-focused hardware such as virtual reality (VR) headsets and augmented reality (AR) glasses are designed to support intensive workloads associated with high-fidelity graphics and artificial intelligence (AI) on smaller and lighter devices. Qualcomm chips stand out in this space – the tech giant claims its Snapdragon chip has been used in over 50 AR/VR devices, including popular VR headphones such as Meta’s Oculus and HTC Vive. Qualcomm also recently announced the $100 million Snapdragon Metaverse Fund, which will invest in the Extended Reality (XR) space.
In addition, Intel claims that the metaverse will need to increase computing efficiency by 1000 times, including advances in 5G and hybrid edge cloud infrastructure. That is, new chips are also needed to power these critical low-latency computing networks. In February 2022, the semiconductor company released details of new chips that support high-power data centers and 5G networks.
5G and low latency networks: 5G wireless technology will provide reliable, flexible and low latency networks for connected devices, enabling high-resolution virtual world applications such as immersive worlds or games.
As of 2022, every leading telecom company in the United States offers 5G networks. Some companies are experimenting with 5G in gaming and AR/VR.For example, in April 2021, Verizon partnered with VR startup Dreamscape Immersive to build immersive learning and training applications on Verizon’s 5G network. Three months later, ATT partnered with Meta’s Reality Labs to show how 5G can be leveraged to produce a more seamless augmented reality experience.
Cloud Infrastructure: cloud infrastructure will enable metaverse companies, especially those hosting virtual worlds and experiences, to store and parse the large amounts of data they generate.
In 2018, Epic Games's " Fortnite " generates 5 PB of data per month (equivalent to standard text of 2.5T pages). To store and understand this data, Fortnite runs almost exclusively on Amazon Web Services (AWS), which uses cloud computing to aggregate and analyze information from an otherwise clumsy data stream. Advances in this field of
will also help people access the virtual world on devices that lack sufficient processing power that lacks sufficient processing power for applications such as high-resolution graphics and artificial intelligence—cloud computing allows processing of experiences on remote servers, and then streaming the experiences to devices such as PCs, VR headsets or phones. While this back and forth communication with external servers may lag, the developments related to edge computing and 5G will help reduce latency.
Edge Infrastructure: Edge Computing will be used for metacosmic applications that rely on real-time responses, such as AR/VR and games.
edge computing enables data from low-power devices to be processed closer to their creation location (i.e., "edge"). This is especially useful when information is required to be processed in real time, such as using hand tracking sensors on VR headsets or processing commands during competitive games. In fact, edge infrastructure companies like Stackpath and Zenlayer list gaming and virtual reality as their main areas of focus.
edge processing is closely related to cloud computing. While cloud infrastructure processing does not require minimal latency workloads, such as loading invisible objects in games, edge infrastructure processing requires very fast responsive inputs, such as player movement. Some companies develop hybrid products. For example, Akamai provides edge cloud hybrid services to several well-known gaming companies, including Roblox and unicorn Riot Games.
access/interface (hardware)
This layer includes hardware devices that allow people to experience the virtual world. While this category includes connected devices such as mobile phones, PCs and gaming consoles, it mainly revolves around emerging technologies designed to enhance immersion in virtual environments.
Touch: Touch startups are developing technology to bring touch into the virtual world.
Some startups, such as HaptX and Sense Glove, are developing gloves that give visibility to virtual objects. Perceived micro vibration, resistance to pneumatic system and motion tracking, this technology can give people the impression of digital objects with texture, hardness and weight.
In the future, haptic technology may far exceed the human hand. Scotland-based Teslasuit is developing a complete leotard to provide full-body haptic feedback and climate control in a virtual environment.
headsets (VR): These companies are developing VR goggles —currently considered the main entry point for metacosmic applications. These devices provide users with visual and audio content that immerse them in a digital environment.
One of the most popular VR headsets is Meta’s Oculus, with consumer interest surges during the 2021 holiday.
startups have also followed suit. For example, Varjo uses lidar and computer vision to bring depth perception, eye tracking and hand tracking to its VR headsets.
holographic technology: These companies use light diffraction technology to project 3D objects into physical space. These holographic images are like augmented reality, bringing digital experiences into the physical world.
Although holographic technology is still in its early stages, it has the potential to be applied to a wide range of use cases, from holographic-led set design and performance to product design and medicine.Base Hologram is using the technology to bring popular artists like Whitney Houston and Buddy Holly back to the stage, while Israeli 's RealView Imaging renders holograms of the patient's internal organs to help develop a surgical plan.
The technology has a long way to go before it has achieved widespread success, but the companies currently working in the field have given us some insight into what we expect in the future.
Smart Glasses (AR): Companies like are developing glasses or contact lenses with AR capabilities.
While not all AR glasses applications are directly related to the metaverse—for example, AR tools designed to help engineers repair refrigerators do not revolve around shared experiences—the companies in the category are laying the foundation for the bridge between physical and virtual.
As AR becomes more popular, especially for social uses, the technology will evolve into a tool that more effectively blends virtual and real-world elements—such as interacting with someone’s virtual world avatar at events—further blurring the boundaries between consumers’ online and offline identities.
Currently, China-based Nreal is developing AR glasses equipped with web browsing and video streaming for everyday consumers. Other companies, such as Magic Leap, are developing AR headsets for enterprise use cases.
Virtualization Tools
These companies are developing software development kits, game engines, 3D scanning technology and other development tools to help 3D content designers build virtual worlds and experiences.
3D Design Engine: This type of company provides tools such as game engines and animation visual effects, which designers can use to build visual elements of the virtual world.
For example, Epic Games' Unreal Engine is used to develop its in-house game suites such as Rocket League and Fortnite. It is also the backbone of many of the highly anticipated games produced by other studios.
Unreal Engine and its competitor Unity are also used by AR/VR developers - Unreal Engine has been used by VR game studios Survios and Sanzaru, while the popular VR game Beat Saber is designed using Unity.
3D Modeling and Capture: Such companies help brands capture and create 3D representations of physical products or environments. This technology is becoming increasingly popular in e-commerce platforms that hope to help consumers better understand their products. However, it will soon be adopted by companies looking to quickly create a virtual world version of a realistic product.
For example, Vntana allows brands to upload existing design files or 3D scans and optimize them immediately to meet web, social media and game engine standards. From there, the products can be uploaded to e-commerce websites, social media or augmented reality, where users can access a 360-degree view of the product, change colors and textures, and test how the product looks in a real-world space.
Other companies use scanning and 3D capture to convert physical environments into virtual environments. For example, PreVu3D creates a virtual model of a factory. These are currently used to help redesign layouts to improve efficiency, but can also be used to build virtual world experiences using underlying technology.
AR Developer Toolkit: These companies provide software development toolkits (SDKs) to optimize AR application development. Most startups in this category are in the early stages because AR has not yet penetrated into mainstream use cases.
In 2021, Niantic, the creator of Pokémon GO, announced the launch of its AR developer platform Lightship as it seeks to surpass its identity as a pure AR gaming company. In September 2021, Qualcomm acquired Austria-based Wikitude, a startup that builds SDKs to speed up AR application design. The acquisition is likely to be the basis for the development of Qualcomm's head-mounted AR development kit, which was launched 2 months after the acquisition.
Qualcomm is not the only existing technology player in the field. Startups may face competition from tech giants such as Amazon Sumerian, Google ARCore and Meta's Presence Platform.
avatar development: avatar development startup is helping individuals, games and brands to design custom and realistic avatars so that metaverse users can reflect and participate. Startups such as
Alter and Ready Player Me allow users to turn selfies into cartoon avatars, which can be customized in thousands of ways. The companies also want their avatars to be able to interoperate in the metaverse to allow users to maintain a single identity while traversing the virtual world and experiencing it.
Other startups focus more on super realistic avatars, including those used for enterprise use cases. For example, the avatar development platform provided by Pinscreen and Uneeq includes natural language processing (NLP) tools—AI that can understand and reply to human language in a smart way—so that brands and businesses can create virtual assistant avatars for customer service.
Stereo Video: Stereo Video Company captures videos of real-world experiences from multiple angles for viewing in 3D in a digital environment.
stereo video will play a key role in bringing entertainment to the virtual world. For example, Tetavi in Israel is using volumetric video to create media, games, and other VR-based content. The startup claims it is currently in discussions with major artists and production companies — that is, it may want to use its technology to broadcast concerts, dance performances, and more on virtual stages.
Virtual World
Virtual World is a place where people gather and exist in virtual worlds that will be characterized by their user-driven experience and economy.
Centralized world: In a centralized virtual world, a company has the ultimate say in the world's rules, goods and experience. Beyond that, it is often a socially driven environment where people can gather and use interactive tools.
For example, Roblox comes with its own developer portal, enabling users to create custom landscapes, items, mini games, and more. This freedom is key to Roblox’s world value proposition. The fact that users have the right to create scenes from deep-sea diving to bold jailbreak helps drive flywheel effect , which will be at the heart of the ever-evolving metacosmic world – dedicated users will improve the virtual world and attract more users, who in turn will improve the experience given to others.
creators can also charge for their services. While the centralized virtual world will account for a percentage of creators’ revenue (Roblox earns about 27 cents), some creators have achieved great success. In 2006, Anshe Chung, the creator of the virtual world Second Life, was considered the first person to gain a real-world millionaire status from a business built on the virtual world.
While Roblox and Second Life can be accessed on traditional gaming consoles such as Xbox, Playstation, PCs and smartphones, startups such as VRChat and Rec Room are looking to integrate VR capabilities beyond scripts to create a more immersive virtual world. Decentralized World: Decentralized Virtual World provides a similar experience to the virtual world. However, these worlds are built using blockchain technology .
Decentraland and The Sandbox are two of the most popular decentralized worlds. Like their centralized counterparts, these worlds allow residents to buy, sell and create. However, these transactions are based on cryptocurrencies unique to each world. In addition, items or land in the world are traded as NFT as proof of decentralized ownership of digital assets.
Since developers won't give control to another single entity that controls the standard, some believe that the decentralized aspect of blockchain will promote interoperability between games and other platforms. This will ultimately allow for the enforcement of scarce assets worldwide. In the future, one might be able to “move” their NFT yachts from one decentralized world to another.
Decentralized worlds also tend to use business models that are different from centralized worlds—they generate revenue by selling virtual land, cryptocurrencies and other digital assets, rather than taking a percentage of the profits generated by the world’s creators.
Some decentralized virtual worlds even allow their residents to help governance through a decentralized autonomous organization (DAO) approach. These settings—powered by blockchain-based, automated “smart contracts”—are often granting users a voting right proportional to the world’s crypto assets they own, allowing them to have a say in world rules and regulations.
Economic Infrastructure
This layer includes technology that enables people to buy, sell and store goods and services in the metaverse.
Despite the surge in interest in cryptocurrencies and NFTs, startups and companies entering this field may serve only a small part of the metaverse—the decentralized metaverse. Therefore, traditional payment companies will remain highly relevant. After all, if the metaverse operates entirely on decentralized finance, companies will lose a huge opportunity to serve non-crypto customers.
Payment: Traditional payment methods will not be outdated in the meta universe. As the virtual world economy grows, customers want to use their typical payment system for convenience, and suppliers will be eager to get a piece of the deals.
PayPal is already available for purchasing virtual currency in Roblox, Minecraft, and Second Life. Meanwhile, Minecraft accepts multiple payment methods to use its world currency, Minecoin, including Visa, Google Pay, Apple Pay, and Mastercard.
Cryptocurrency Exchange: These companies provide platforms for buying and selling cryptocurrencies, including cryptocurrencies native to the decentralized digital world.
For example, The Sandbox's cryptocurrency Sand can be traded on exchanges such as Gemini, Crypto.com and Binance. Similarly, MANA, the native cryptocurrency of Decentraland can be purchased on platforms such as Coinbase, Kraken, etc.
Encrypted Wallet: Encrypted Wallet acts as login credentials for the decentralized world.
In order to log in to a world like Cryptovoxels or Decentraland, users need to have an encrypted wallet. The unique ID of the wallet allows it to act as the user's personal account. As long as they have access to their wallet, they can log in to the decentralized world from multiple devices and receive digital assets such as the world currency or NFT of virtual land.
For example, sandbox allows users to register some of the most popular crypto wallets, including Venly, Bitski and Metamask.
NFT Market: These startups develop platforms to support businesses in the decentralized world, where users can buy and sell NFTs from virtual land to virtual avatar clothing to virtual yachts.
Non-Functional Tokens (NFTs) are not just a meta-universe concept—one can buy and sell NFTs of tweets, videos, etc. without participating in the meta-universe. NFTs, however, are becoming the backbone of economic activity in the decentralized virtual world as they provide proof of ownership for property based on the metaverse. The NFTs of the
Metaverse project can also be listed on the external NFT marketplace. For example, markets like Open Sea or Rarible already support the sale of virtual real estate and items from Decentraland and The Sandbox. Similarly, startups like DMarket are developing NFT markets dedicated to trading goods for the decentralized world and games.
Experience
This layer covers a variety of goods, services and experiences available in the metaverse. Note that this layer will continue to evolve and change – the featured categories below illustrate some of the meta-universe experiences that are currently gaining attention.
Games: This category includes AR/VR game companies and companies that develop decentralized multiplayer games. While the Metauniverse World can include traditional games, the categories highlighted below instead discuss emerging gaming trends that may influence the evolution of the Metauniverse World.
augmented reality/virtual reality games
These startups are leading the next wave of immersive AR/VR games.
Most featured companies, such as Ramen VR, Survios and ForeVR Games, are VR-focused gaming studios. Other companies, such as Illumix, which is supported by Disney , are developing AR games that can turn your smartphone camera into a gaming platform.Illumix's critically acclaimed horror game Freddy's Five Nights allows users to fight back and collect possessed electronic animations hidden on the walls of their homes.
decentralized games
These startups are blockchain-based multiplayer games or help game companies develop blockchain-based games startups. Decentralized games are similar to decentralized virtual worlds, but not as extensive in terms of player freedom.
For example, Mythical Games’ decentralized game Blankos allows players to build mini games and trade NFT items. However, players cannot create new textures, creatures, or items like they do in Roblox or Second Life. Furthermore, the rules of the game are not determined by the DAO, just like Decentraland or The Sandbox.
Virtual Concerts: These startups are building virtual concert venues in the virtual world, and they are also enhancing live concerts with new immersive experiences.
For example, in January 2022, AmazeVR raised $15 million in Series B financing for its VR concert platform. Companies like
may find themselves facing competition from virtual worlds and gaming companies – Fortnite’s Travis Scott concert, for example, has over 12 million viewers attending.
Other startups are augmenting the creativity of live concerts by using augmented reality. Pixellynx, a company founded by musicians including deadmau5, is using AR to gamify concerts. Fans can point their phones to the stage, experience new visuals, participate in mini-games, collect virtual items and NFTs.
Virtual Fashion: Virtual Fashion Company is a brand that develops clothing worn in the virtual world.
Virtual fashion startups are still in their early stages of development. Brand New Vision and DressX recently raised seed rounds to support their NFT-based fashion offerings. Users who buy from these startups can choose to use AR to showcase their virtual outfits, from jackets that look relatively conventional to exquisite dresses that are difficult to make in the real world.
The larger fashion brands also view virtual fashion as a way to market themselves and build new sources of income. For example, Nike acquired virtual sneaker company RTFKT and collaborated with Roblox to create “Nike Paradise” – a world where users can buy Nike clothing for their avatars. Similarly, Balenciaga released a virtual fashion brand in Fortnite, and in May 2021, a digital Gucci "pack" sold on Roblox for over $4,000.
Virtual Real Estate: Virtual Real Estate companies buy, resell, develop and rent virtual assets in a decentralized virtual world.
This is how Anshe Chung made millions of dollars mentioned earlier—by buying virtual real estate, redeveloping it using Second Life’s creative tools, and then renting it out to other Second Life residents.
Virtual real estate company Everyrealm is a spin-off of Republic Realm that made headlines when The Sandbox bought a $4 million property. One of the startup’s projects includes developing tropical landscapes on land, equipped with unique items and NFTs, such as superyachts (the largest of which was sold for $650,000).
Virtual Work: These companies are developing immersive workspaces where employees can collaborate on projects, walk around in digital offices and interact with each other as if they were in the same room.
Many companies in this field rely heavily on augmented reality and virtual reality technology . For example, Immersed and vSpatial are developing VR office spaces where avatars can collaborate in real-time to share whiteboards, build complex workstations with multiple dashboards that are impractical to set up in real life, hold meetings, and more. Other startups focus on specific use cases. For example, IrisVR is developing VR spaces for architects to collaborate on projects, allowing them to connect and explore 3D renderings of structures in a shared virtual environment.
Other companies, such as Cosmos Video, focus more on amplifying the social aspects of work.The London-based startup allows employees to navigate through video game-like representations in their offices, where they can host video conferences, office hours or challenge each other in mini games.
Others: In addition to the above apps, there are many companies that are developing unique meta-universe experiences.
For example, Smartguide is building an AR application that can turn a person's phone into a museum's guide. Meanwhile, Spatial raised $25 million in Series B financing to get rid of virtual workspaces and develop VR-based galleries where people can showcase NFT art.
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