Report Overview

Increasing demand in the entertainment and gaming industry and advancement in technology are expected to boost the growth of Saudi Arabia Metaverse market during the forecast period between 2023 and 2029.

Saudi Arabia Metaverse Market - Industry Trends & Forecast Report, 2029

Saudi Arabia metaverse market size was estimated to be worth USD 16.5 billion in 2022. During the forecast period between 2023 and 2029, the Saudi Arabia metaverse market size is projected to grow at a CAGR of 48%, reaching a value of USD 255.45 billion by 2029. Major growth factors for the Saudi Arabia Metaverse market include rising government investments, initiatives towards IT infrastructure development, and economic diversification. Furthermore, an increasing number of organizations and startups launching various metaverse projects in the Gulf country are anticipated to offer lucrative growth opportunities to the market during the forecast period.

Saudi Arabia Metaverse Market – Overview

According to McKinsey, the metaverse is an evolving 3-D digital environment that enables realistic personal and professional encounters online by utilizing virtual reality, augmented reality, and other cutting-edge internet and semiconductor technologies. Different types of technology, including cloud infrastructure, software tools, platforms, apps, user-generated content, and hardware, will power the metaverse. The metaverse will feature a variety of user experiences in addition to technical needs, including but not limited to entertainment, gaming, business, social interactions, education, and research.

Saudi Arabia Metaverse Market

Growth Drivers

Favorable Government Initiatives and Increasing Investments

Saudi Arabia, under its initiative ‘Vision 2030’, focusing on economic diversification, is significantly investing in boosting digitization in the country. Saudi Arabia is investing USD 1 billion in cyberspace-related projects. According to Ahmed Mohammed Al-Suwaiyan, the governor of the Digital Government Authority, during the Global Entrepreneurship Congress in Riyadh in 2023, the Saudi Arabian government spends more on technology than any other government in the world, accounting for 21.7% of all technical expenditures, as reported by the Arab News. Such high investments are projected to offer lucrative growth opportunities for the major players in the Saudi Arabia metaverse market during the forecast period.

Restraints

High Installation and Maintenance Costs

The main barrier preventing its widespread acceptance in businesses and nations, including Saudi Arabia, is the expensive cost of metaverse development. Depending on the needs of the project, the average cost to create a metaverse social media network is between USD 25,000 and USD 75,000. The price of creating a metaverse can also differ depending on the features required by the company, the tech stack needed, and the size and expertise of the team. In 2023, creating a metaverse might cost anywhere between USD 25,000 and USD 1 million, according to estimates.

Impact of COVID-19 on the Saudi Arabia Metaverse Market

The unprecedented COVID-19 pandemic presented significant growth opportunities for the Saudi Arabia metaverse market. Although the market initially witnessed slow growth during the lockdown owing to the restrictions on the manufacturing operations and supply chains of the metaverse hardware components. However, the pandemic accelerated the adoption of the metaverse, especially in the BFSI sector and the gaming industry. The adoption of the metaverse across various domains, including education, healthcare, events, and others, allows users to have interactive sessions in the virtual world.

Saudi Arabia Metaverse Market

Segmental Coverage

Saudi Arabia Metaverse Market – By Component

Based on components, the Saudi Arabia metaverse market is segmented into hardware, software, and services. The hardware component accounts for the largest market share. A virtual reality headset is the most well-known piece of hardware that can enable users to connect to the metaverse. Many companies have released their own VR headsets that can be used for gaming, work, virtual meetings, and internet content, including Oculus (owned by Meta), HTC, HP, and Sony.

Saudi Arabia Metaverse Market – By Technology

Based on technology, the Saudi Arabia metaverse market is segmented into blockchain, virtual reality (VR) and augmented reality (AR), mixed reality (MR), and others. The VR & AR technology segment holds the largest share of the Saudi Arabia metaverse market. Virtual reality (VR) is a network of related virtual worlds that allows avatar-based user interaction with digital content. With the help of augmented reality (AR), metaverse products will have immersive features like the ability to dress your avatar in a variety of clothing. To immerse its users in a different world, the metaverse realm blends numerous components of AR and VR.

Saudi Arabia Metaverse Market – By Application

Based on application, the Saudi Arabia metaverse market is segmented into digital marketing, content creation, social media, gaming, events & conferences, online shopping, testing & inspection, and others. The gaming segment dominates the market as a result of considerable continuous innovations and improvements by developers, as well as an increasing emphasis on enhancing immersion and making games more realistic. The events & conferences segment is also projected to grow at a significant rate during the forecast period.

Saudi Arabia Metaverse Market – By Industry Vertical

Based on the industry vertical, the Saudi Arabia metaverse market is segmented into retail, media & entertainment, BFSI, and others. The BFSI sector accounts for the largest share of the Saudi Arabia metaverse market. Through the metaverse, banks may provide unique consumer experiences while maintaining the confidentiality of financial data. By simulating actions like ATM cash withdrawals, branch placement and layout, and other physical banking events, banks can expand their physical experience in the digital realm. As a result, several banks are educating their staff in AR and VR, which is expected to open up new market growth potential.

Competitive Landscape

Major players operating in the Saudi Arabia metaverse market include Alibaba Group Holding Limited, ByteDance Ltd, Meta (Facebook, Inc.), Huawei Technologies Co. Ltd., Microsoft Corporation, Nextech AR Solutions Inc., NVIDIA Corporation, Roblox Corporation, Sandbox VR, and Shenzhen Zqgame Co., Ltd. To further enhance their market share, these companies employ various strategies, including mergers and acquisitions, partnerships, joint ventures, license agreements, and new product launches.

Recent Developments

• In February 2023 – The Sandbox announced that it had signed an MoU with Saudi Arabia Digital Government Authority (DGA) for future metaverse development.

Scope of the Report

By Component

• Hardware

• Software

• Service

By Technology

• Blockchain

• Virtual Reality (VR) & Augmented Reality (AR)

• Mixed Reality (MR)

• Others

By Application

• Digital Marketing

• Content Creation & Social Media

• Gaming

• Events & Conferences

• Online Shopping

• Testing & Inspection

• Others

By Industry Vertical

• Retail

• Media & Entertainment

• BFSI

• Others