Japanese Companies Form Alliance to Tap into Metaverse Market

The Nihon Keizai Shimbun (Nikkei) reported that three Japanese companies, including Itochu Corporation and Sony Group, have formed a capital alliance with startup V, a Tokyo-based company that produces and sells characters for the metaverse.

These companies highly evaluated V’s video technology, which draws users’ alter egos, called ‘avatars’, in three dimensions. They are currently reviewing various linkages, such as selling digital goods within games.

Itochu and Sony Group completed their investments in V in late August, while Square Enix Holdings (HD) completed its investments in V in June. V raised approximately 240 million yen in funds, but the investment ratio or amount of each company was not disclosed.

The metaverse is a three-dimensional virtual space whose use is expanding in fields such as games and social networking services (SNS). Users can freely move around the virtual space through their avatars, interact with others, and buy and sell digital goods.

V is a company founded in 2019 that has outstanding capabilities in ‘3D modeling’ technology, which draws avatar characters in three dimensions. It has business records with several companies, including Japan’s Daimaru Matsuzakaya department store and NTT Communications, and has already achieved a profit.

V aims to expand sales to several billion yen within a few years. Its technology allows for efficient creation of avatars for a variety of virtual spaces, making it a valuable asset in the growing metaverse market.

According to a research firm’s forecast, the global metaverse market, which was worth $56.7 billion in 2023, is expected to expand to $507.8 billion in 2030. The Japanese domestic market is also expected to grow to about 2 trillion yen in 2027, an increase of about 7 times compared to the 2023 estimate.

The metaverse market is mainly driven by gaming and SNS services, but some point out that companies operating online shopping malls or education businesses are still small in size and are having difficulties growing.

Key Players in the Metaverse Market

• Itochu Corporation
• Sony Group
• Square Enix Holdings (HD)
• V (Tokyo-based startup)

Metaverse Market Forecast

• Global metaverse market: $56.7 billion (2023) → $507.8 billion (2030)
• Japanese domestic market: 2 trillion yen (2027), an increase of about 7 times compared to the 2023 estimate