Misconceptions about the End of the Metaverse: The New Phase of 'Differentiation and Opportunities' Demonstrated by the Industry in 2025

By the end of 2025, four years after the boom of 2021, the metaverse industry is experiencing a significant turning point. The paradoxical situation where both the assessment that “it’s over” and the claim that “it’s still growing” coexist actually reflects the complex reality of the industry. The metaverse is not declining; rather, amid waves of淘汰 (elimination) and集中 (consolidation), the sector with genuine value is being clearly separated from illusions.

The Prosperity of Gaming Empires: Roblox and Fortnite Leading the Consumer Metaverse

In 2025, immersive gaming platforms demonstrate the most robust foundation within the metaverse industry. Notably, Roblox’s growth is remarkable, with monthly active users reaching 151 million in Q3 2025, a 70% increase year-over-year. Quarterly revenue also hit $1.36 billion, a 48% increase.

Interestingly, these giant platforms are deliberately downplaying the “metaverse” label. While Roblox emphasized its metaverse vision during the 2021 boom, it has now shifted focus to substantial value propositions such as the “global gaming market,” “platform ecosystem,” and “virtual economy.” This strategic shift indicates that the concept of the metaverse is transitioning from a marketing tool to real business value.

Meanwhile, Fortnite, with hundreds of millions of monthly active users, is evolving uniquely. Epic Games founder Tim Sweeney repeatedly advocates for building an open, interoperable metaverse, and in November 2025, announced a strategic partnership with Unity. About 40% of Fortnite gameplay time is spent on third-party content, i.e., “metaverse” features, and collaborations with Hatsune Miku, Bruno Mars, BLACKPINK, and others for music festivals create experiences for millions of users.

In contrast, Minecraft has made a major decision. Once considered a symbol of the metaverse industry, it has ended support for VR/MR devices since March 2025 and shifted entirely to a PC/console-centric strategy. This reflects the industry-wide recognition that immersive technologies are not yet practical for the general public.

The Trial of Social VR: Returning to Quality and the Importance of Community Culture

The social networking sector of the metaverse faces a severe adjustment in 2025. The novelty of socializing in purely virtual spaces is rapidly fading, and user needs are shifting toward realizing tangible value.

Meta’s Horizon Worlds exemplifies this. Its monthly active users are below 200,000, a stark contrast to Facebook’s hundreds of millions. Meta has been expanding its mobile and web versions since late 2024, claiming a fourfold increase in mobile users over a year, but growth remains far from explosive. At Meta Connect 2025, the company’s CTO acknowledged that the metaverse social platform “needs to prove sufficient user retention and profitability,” and is currently investing in AI content and NPC functionalities to turn the tide.

By contrast, VRChat maintains steady growth supported by its core community, with concurrent users exceeding 130,000 during the New Year holidays in 2025. The surge in user-generated content in the Japanese market is expected to lead to over 30% annual growth. Its success hinges on high-quality content and a strong community culture.

Meanwhile, Rec Room, once valued at $3.5 billion, announced in August 2025 that it would lay off more than half of its staff. The rapid expansion into mobile and console markets has lowered the quality of user-generated content, resulting in lower user retention and revenue than expected. This exemplifies that the era of “quantity over quality” in metaverse social networks has arrived.

Polarization in XR Hardware: Ultra-High-End and Low-Cost Accelerate Metaverse Adoption

The XR hardware market in 2025 exhibits a clear “extremes hot, middle cold” structure.

In the ultra-high-end segment, Apple Vision Pro garners attention for its innovation, but with a price of $3,499, sales are limited. Tim Cook himself has stated that “it is not aimed at the mass market at this stage, but for early adopters,” and Apple is steadily building its ecosystem through phased updates to visionOS and hardware improvements.

In the mass market, Meta Quest 3 dominates, with IDC data showing that Meta secured a 60.6% share of the entire AR/VR headset and smart glasses market in the first half of 2025. This far surpasses competitors, demonstrating strong market dominance. Sony’s PlayStation VR2 also cut prices by $150–$200 in March 2025, bringing it down to $399.99, which helped boost sales, with nearly 3 million units expected to be sold by the end of 2025.

A notable trend is the rise of consumer smart glasses. Meta and Ray-Ban’s second-generation collaboration introduced integrated displays, achieving “light AR” rather than fully immersive experiences. According to IDC, global shipments of AR/VR headsets and smart glasses reached 14.3 million units in 2025, a 39.2% increase year-over-year.

From the perspective of metaverse proliferation, a key announcement was made at Meta Connect 2025. Meta emphasized integrating generative AI into XR, showcasing features that allow users to generate virtual scenes and objects via voice commands. This indicates that AI+XR will become a new investment focus from 2026 onward. Industry standardization is also accelerating, with growing support for the OpenXR standard, improving compatibility across different brands’ headsets.

Commercialization of Digital Identity: Avatar Technology Unlocks New Markets

The value of digital identity in the metaverse is progressing toward implementation.

Korea’s NAVER Z’s ZEPETO has grown to over 400 million registered users and about 20 million monthly active users. The user base is centered on Generation Z, especially women, attracting luxury brands like Gucci and Dior through limited digital apparel and virtual fan meetings. NAVER Z announced that ZEPETO and related products have reached 49.4 million monthly active users, recovering from post-pandemic decline.

Cross-platform support platform Ready Player Me was acquired by Netflix in the second half of 2025. Before the acquisition, over 6,500 developers used its SDK; post-acquisition, it is expected to evolve into an ecosystem where users can utilize unified avatars across multiple games, integrated into Netflix’s gaming business.

Snapchat leverages its platform with over 300 million daily active users to promote AI integration into Bitmoji and expand its fashion store offerings. Meta continues to strengthen its own avatar system, deploying Codec avatars and AI virtual celebrity series across Facebook, Instagram, and Quest, aiming to build an integrated digital identity platform.

The Reality of Industry Metaverse: A Natural Extension of Corporate Digital Transformation

Contrasting with consumer products, industrial and enterprise metaverse has established itself as the most practical and rapidly growing area in 2025. Market research estimates the industrial metaverse market will reach approximately $48.2 billion in 2025, with a compound annual growth rate of 20.5% from 2025 to 2032, expanding to $600 billion by 2032.

NVIDIA’s Omniverse platform exemplifies this sector. Major manufacturing companies like Toyota, TSMC, and Foxconn are building digital twins on Omniverse to optimize production lines and train AI. Traditional industrial software firms like Siemens are also actively promoting the industrial metaverse; according to Siemens & S&P Global, 81% of global companies are planning or testing industrial metaverse implementations.

Concrete results are reflected in numbers. BMW has shortened the time to market for new production lines by 30% through virtual factory expansion, and Boeing has reduced aircraft design errors by nearly 40% using digital twins. In healthcare, VR therapy adoption is increasing, with several US hospitals using VR systems for patient recovery, and 84% of medical professionals believe AR/VR positively impacts the industry.

However, challenges remain. Lack of interoperability between different vendor solutions, data silos, and data security concerns hinder progress, leaving many applications at the proof-of-concept stage.

Cryptocurrency Metaverse Challenges: A Long Road to Restoring Trust

After the bubble burst in 2022–2023, NFT virtual land and blockchain games faced severe stagnation. According to DappRadar, the total NFT transaction volume of metaverse projects in Q3 2025 was only $17 million, with Decentraland’s quarterly land transactions totaling $416,000 across 1,113 deals. Compared to the peak in 2021, when transactions reached millions of dollars, the decline is dramatic.

User activity data from DappRadar shows Decentraland’s daily active users are below 1,000, with only large events attracting tens of thousands, indicating a “ghost town” scenario.

Meanwhile, project teams continue efforts to maintain communities. Decentraland established a metaverse content fund in 2025, allocating $8.2 million through a DAO council to support art weeks, career fairs, and attract creators and companies. The Sandbox partnered with Universal Pictures to launch a Walking Dead-themed virtual area to attract new users.

The biggest event of 2025 was Yuga Labs’ “Otherside” launch. Developed over three years by the creators of BAYC, the virtual world was released in November 2025, attracting tens of thousands to the “Koda Nexus” area on the first day, achieving rare Web3 metaverse attendance. Yuga Labs is integrating AI world-generation tools to enrich user-generated content.

However, crypto asset and NFT-integrated metaverse still bears a heavy legacy. Excessive financialization and speculative narratives at the peak led many participants to substantial economic losses. Currently, this field faces entrenched perceptions of “asset speculation,” “disconnection from real demand,” and “low UX quality,” requiring significant time to regain mainstream user trust.

The End of 2025 and Outlook for 2026

The summary of the metaverse industry in 2025 cannot be simply described as an “end.” Rather, it was a year revealing the industry’s core through “differentiation and selection.”

Consumer gaming platforms, especially Roblox and Fortnite, continue steady growth and deepen user engagement. Industrial metaverse demonstrates its most realistic value in market size and growth rate, establishing itself as a natural extension of corporate digital transformation beyond the concept of the metaverse.

Meanwhile, social VR platforms based on early idealistic visions and crypto asset-integrated metaverse face severe淘汰 (elimination) pressures. Surviving companies are shifting focus toward quality and community value, with ongoing selection.

From 2026 onward, the evolution of the metaverse is expected to enter new phases driven by AI integration, accelerated XR hardware adoption, and full-scale industrial applications. However, the very concept of “metaverse” may fade, leaving only the valuable sectors to survive. The key lies in whether the industry can navigate this transition and truly create customer value.