Virtual Worlds, Real Impact

Virtual worlds are reshaping the boundaries of human interaction and reality and impacting production process and business models. This report provides a comprehensive analysis of the global and European Union (EU) virtual worlds ecosystem, mapping over 88,000 activities across business, innovation, and research domains led by 68,000 players, including firms, research institutions, and government organisations. The EU is the global leader in virtual world related research publications. The EU’s strengths in foundational research paired with strategies to accelerate innovation-to-market pipelines could foster cross-sector collaboration and address regional fragmentation. Globally, venture capital funding into virtual worlds reveals stark disparities. The US predictably dominates the landscape with over 9 billion invested in virtual worlds. China ranks second worldwide with more than 5.8 billion invested. While the EU accounts for 16% of the global share of virtual worlds deals, ahead of China (9%) and second to only the US (40%), it comes in fourth behind the UK in terms of the total amount invested. Public funding and cross-border ownership patterns highlight the EU’s growing role as both an investor and recipient of foreign capital. The report identifies significant concentrations of virtual world activities across industrial ecosystems, with Creative Cultural Industries, Tourism, and Retail leading adoption both in the EU and worldwide. However, critical industries like Healthcare, Aerospace & Defence, and Energy-Intensive Industries remain underutilised with opportunities for EU expansion, despite research on their potential impact across these industries. The report also presents the matrix of key enabling technologies like Extended Reality (XR), AI and IoT that comprise global activity in virtual worlds. By leveraging its research capabilities and fostering strategic alliances, the EU can strengthen its global competitiveness to shape the next generation of virtual worlds.