The Metaverse industry at a crossroads: gaming and industrial applications are booming, while social and cryptocurrencies are struggling

As 2025 comes to an end and the once-booming metaverse industry becomes clearer, the true landscape is becoming more distinct. From metaverse games to industrial applications, the development across different sectors is clearly bifurcating. Overall, the industry is not in decline; rather, some areas are experiencing remarkable leaps forward, while others remain sluggish — this is the complex reality of the metaverse industry in 2025.

After the boom in 2021 and the cooling in 2022, how has the metaverse ecosystem evolved by 2025? It’s not just a simple decline; instead, an uneven development phase has emerged, with clear differentiation between hot and cold sectors. This divergence between hot and cold sectors is the most important observation point for the metaverse industry in 2025.

Immersive Metaverse Games Maintain an Overwhelming User Base

In 2025, the most mature and active sector remains immersive gaming platforms. Roblox, a pioneer in metaverse gaming, has reached new heights in both user scale and revenue.

According to Q3 data, Roblox’s average daily active users reached 151 million, a 70% increase year-over-year. Quarterly revenue hit $1.36 billion, up 48% from the same period last year. This enormous user base demonstrates that the user-generated content (UGC) metaverse model, which integrates gaming and social interaction, still retains high stickiness and appeal.

Interestingly, Roblox is not actively emphasizing the “metaverse” label at this point. Instead, it prefers to frame its story around concepts like “global gaming market” and “platform and creator ecosystem.” While it declared its vision during the 2021 metaverse boom, it is now strategically distancing itself from the label.

Meanwhile, Epic Games, developer of Fortnite, which has hundreds of millions of monthly active users, continues to emphasize the importance of building an open, interoperable metaverse. In November 2025, Epic announced a strategic partnership with Unity, highlighting that corporate collaboration is essential for realizing the metaverse. According to Tim Sweeney, founder and CEO, 40% of Fortnite’s gameplay time occurs within third-party content, i.e., the “metaverse” part.

Fortnite’s music festivals, collaborating with Hatsune Miku, Bruno Mars, BLACKPINK’s Lisa, and others, have provided immersive large-scale musical experiences to millions of players. Roblox has also collaborated with Icelandic-Chinese musician Laufey and K-POP group aespa, staging performances at the official music venue “The Block.” These examples suggest that metaverse games are becoming new “digital third spaces.”

Minecraft, once recognized as a giant in metaverse gaming, still maintains presence, but interesting developments are happening. Since March 2025, official update logs warn that support for VR and MR devices will end, indicating a strategic retreat from immersive hardware.

Overall, the metaverse gaming sector is experiencing a “the strong get stronger” scenario. Major platforms with vast ecosystems and creator communities continue to expand their user bases, while smaller platforms face declining activity and pressure to consolidate.

Social Networks in the Metaverse Enter a Period of Adjustment

Compared to immersive games, the metaverse-based social realm has not achieved significant results in 2025. Instead, it is in an adjustment phase, exploring new directions through reflection.

Meta, a major player, has significantly revised its strategy. It shifted from developing independent VR social apps to integrating with existing platforms like Facebook and Instagram, which have large user bases.

Meta’s Horizon Worlds remains challenging, with monthly active users below 200,000, a very limited figure compared to Facebook’s hundreds of millions. Meta claims that opening up to mobile and web platforms since late 2024 has quadrupled mobile users within a year, but it has not fully escaped the fundamental constraint of dependence on VR devices.

At Meta Connect 2025, the company’s CTO acknowledged that metaverse social networks need to generate sufficient user retention and profitable business models. They plan to invest more in AI-generated content and NPCs, aiming to reduce user acquisition costs and better integrate with real-world social networks.

In contrast, veteran VR social platform VRChat has maintained steady growth driven by its core community, with peak concurrent users exceeding 130,000 during the New Year holiday in 2025. The surge in user-generated content in markets like Japan is expected to increase user numbers by over 30% from 2024 to 2025.

Meanwhile, Rec Room, once valued at $3.5 billion, faced growth bottlenecks and announced layoffs of over half its staff in August 2025. Expansion into mobile and console platforms led to a flood of low-quality content, negatively impacting retention and revenue.

In 2025, the social metaverse overall is in a period of stagnation and adjustment. The novelty of pure virtual social experiences has waned for general users; without high-quality content and tangible social value, users do not stay long. Surviving companies are focusing on improving content quality and community culture, exploring integration with real-world social interactions.

XR/AR Hardware Shows a “Hot at Both Ends, Cold in the Middle” Structure

The XR hardware market in 2025 exhibits a unique bifurcated structure.

In the ultra-high-end segment, Apple’s Vision Pro attracted attention, but with a high price of $3,499 and limited production capacity, sales remain limited. Apple CEO Tim Cook explicitly stated that the product is “not for the mass market, but for early adopters.” Nonetheless, Apple continues to invest in ecosystem development, hinting at updates to visionOS and hardware improvements in 2025.

Meanwhile, Meta’s Quest series continues to dominate the mass-market VR space. According to IDC, Meta held about 60.6% of the global AR/VR headset and smart glasses market share in the first half of 2025. The Quest 3, with improved performance and comfort, achieved strong sales during the 2024 and 2025 holiday seasons for two consecutive years.

Notably, consumer smart glasses are rising. The second-generation smart glasses collaboration between Meta and Ray-Ban introduced integrated displays and basic AR functions. Their appearance resembles ordinary sunglasses, with practical features like photo-taking and AI capabilities, highly popular among young urban users. IDC reports that global shipments of AR/VR headsets and smart glasses will reach 14.3 million units in 2025, a 39.2% increase year-over-year.

Sony’s PlayStation VR2, after underperforming in its first year, cut prices by $150–$200 after March 2025, setting the price at $399.99. This price cut boosted holiday sales, and total sales are expected to approach 3 million units by the end of 2025. However, compared to Quest’s wireless portability, PS VR2 remains constrained by console dependence, with a content ecosystem mainly targeting core gamers.

The overall pattern in 2025 is clear: ultra-high-end products (Vision Pro) drive innovation but have limited sales; low- and mid-price devices (Quest, smart glasses) record high sales volumes and dominate the market. PC VR and enterprise AR devices remain niche within the industry.

At Meta Connect 2025, Meta emphasized the integration of generative AI into XR. Users will be able to generate virtual scenes and objects via voice commands. Apple is also exploring AI integration with Vision Pro, suggesting AI+XR will become a new investment focus in 2026.

Furthermore, industry standardization accelerates. The OpenXR standard gained broad support in 2025, gradually improving content and accessory compatibility across various brands’ headsets.

Digital Avatar Market: ZEPETO Makes Strides

The digital identity and avatar sector within the metaverse continued to develop in 2025.

NAVER Z’s ZEPETO has over 400 million registered users and about 20 million monthly active users. While smaller than Roblox or Fortnite, it is a significant scale within the metaverse community. Most users are Gen Z, especially females, enjoying 3D avatar creation, virtual fashion customization, and social interactions in virtual spaces.

In 2025, ZEPETO launched limited digital apparel collaborations with luxury brands like GUCCI and Dior, and hosted virtual fan meetings with multiple K-pop groups, attracting many brands. These activities boosted platform vitality, helping ZEPETO recover from pandemic-related user declines. NAVER Z reports that ZEPETO’s total monthly active users reached 49.4 million.

The cross-platform avatar creation tool Ready Player Me (RPM) was acquired by Netflix in late 2025, drawing significant attention. Prior to acquisition, RPM had raised about $72 million from investors including a16z. It enables creation of compatible 3D avatars across multiple virtual worlds, with over 6,500 developers using RPM SDK.

Post-acquisition, Netflix plans to leverage this technology to expand its gaming business, allowing Netflix users to use unified virtual avatars across various games. To focus on internal integration, Netflix announced it will shut down the standalone avatar service in early 2026.

Snapchat is also expanding its investment in virtual avatars, testing AI-generated content for Bitmoji and launching a Bitmoji fashion store. Meanwhile, Meta continues to invest in its own avatar system, introducing more realistic “Codec Avatars” to Quest and social apps in 2025, available on Facebook, Instagram, and Quest.

Industry Metaverse Becomes Most Practical and Rapidly Growing

Compared to consumer products, industry metaverse targeting mainly enterprises has become the most practical and rapidly growing sector in the metaverse field by 2025.

The market size is astonishing. According to research reports, the industrial metaverse market will reach about $48.2 billion in 2025, with an annual growth rate of 20.5% from 2025 to 2032, reaching $600 billion by 2032.

A representative example is NVIDIA’s Omniverse platform. Manufacturing giants like Toyota, TSMC, and Foxconn use it to build digital twins of their factories, optimizing production lines and training AI. Industry software companies like Ansys, Siemens, and Cadence are actively collaborating with NVIDIA to establish data and visualization standards.

Traditional industrial software vendors like Siemens are also actively promoting the concept of the industrial metaverse in 2025. A joint survey by Siemens and S&P Global shows that 81% of companies worldwide are already using, testing, or planning to adopt industrial metaverse solutions.

Concrete results are evident. In 2025, BMW expanded its virtual factory project, using digital twins to simulate new production lines, reducing time to market for new products by 30%. Boeing used HoloLens and digital twin technology to design and assemble complex aerospace parts, reducing design errors by nearly 40%.

In healthcare and training, VR/AR applications are maturing. Several US hospitals have adopted VR therapy systems (like RelieVRx) to aid patient recovery. 84% of healthcare professionals believe AR/VR has a positive impact on the industry.

Multinational energy companies use VR for training in hazardous environments, and logistics firms employ AR glasses for warehouse management and picking, both achieving high ROI. France’s nuclear power company reports a 20% reduction in new employee accident rates through VR training.

Governments are also involved: Singapore upgraded its 3D digital city model for national planning, and Saudi Arabia built a large metaverse model for NEOM city. These city digital twin projects are supported by government initiatives.

Industry metaverse has moved beyond hype into a natural extension of digital transformation. However, issues like lack of interoperability among vendors and data silos cause some companies to adopt a wait-and-see approach. Data security and confidentiality concerns when connecting production systems with cloud simulations remain, and despite high adoption rates, many applications are still at proof-of-concept or small-scale stages.

Cryptocurrency & NFT Metaverse Struggling to Regain Trust

After the bubble burst in 2022–2023, speculation around NFT virtual land and blockchain games significantly cooled. Existing decentralized virtual worlds like Decentraland and The Sandbox continue to operate but with user activity far below peak levels.

According to DappRadar, the total NFT transaction volume for metaverse projects in Q3 2025 was only about $17 million. Decentraland’s quarterly land sales volume was just $416,000, a dramatic decline from the peak of several million dollars per sale in 2021. Daily active users in Decentraland are fewer than 1,000, with concurrent users only reaching several hundred to a few thousand, peaking at tens of thousands during major events.

This “ghost town” phenomenon is also seen in projects like The Sandbox. However, project teams are maintaining community engagement. Decentraland established a metaverse content fund in 2025, with a DAO allocating $8.2 million to support events like Art Week and career fairs. The Sandbox partnered with Universal Pictures to create themed virtual landscapes based on IPs like “The Walking Dead.”

The biggest event in crypto asset metaverse in 2025 was the launch of Yuga Labs’ “Otherside.” Yuga Labs, creator of BAYC, officially launched the “Otherside” virtual world in November 2025 after three years of development. Entry does not require NFTs, and on the first day, tens of thousands of players gathered at the new “Koda Nexus” area. Yuga Labs integrated AI world-generation tools into Otherside, allowing users to create 3D game scenes through interaction, enriching user-generated content.

However, compared to other metaverse sectors, crypto-based metaverse ecosystems carry a heavier historical burden. During the previous peak, excessive financialization and speculative narratives dominated, causing many participants to suffer substantial economic losses.

As a result, crypto asset metaverse faces a more serious trust barrier in the public perception. It struggles to dispel stereotypes like “asset speculation,” “disconnection from real needs,” and “poor user experience.” Some teams are attempting to return to content and user experience, but restoring trust and mainstream adoption in a short time remains a challenge.

The Future of the Metaverse: Continued Polarization

The metaverse industry in 2025 shows not just overall decline but clear sectoral differentiation. Immersive metaverse games and industrial metaverse are thriving, while social and crypto asset metaverse are in periods of adjustment and trust rebuilding.

This uneven development reflects the true state of the industry. Future growth will be driven by the continued expansion of high-retention metaverse gaming platforms and the rapid adoption of proven practical industrial metaverse solutions.