3c Economics and innovation

Foundations of economic sustainability

Market trends analysis

The Virtual Worlds (VW) and Web 4.0 markets remain a sector with strong economic potential. Annual funding estimated between 8 and 10 billion dollars for virtual worlds-related technologies is at a level comparable to that observed during the early days of AI, reflecting a growing market and a real innovation momentum (Joint Research Centre, 2023). In 2024, the size of the AR/VR market was 16.32 billion USD and is projected to reach 123.06 billion USD by 2032 (Fortune Business Insights, 2025). This trend also verifies with the other markets involved in VW. The year 2022 was also exceptional for funding startups on the Internet of Things with an average funding amount of 15.9 million dollars worldwide per round, and even 16.7 million in Europe (IOT business news, 2023). The year 2024 was marked by a historic record of funding in the edge computing sector, with over 6 billion dollars invested, highlighting the strategic importance of this technology for the performance of VW and immersive services (STL Partners, 2024).

Actor type	Category	Estimated Market Share (%) of Total Ecosystem	Proportion of European companies
Infrastructure / Cloud / Connectivity	Service	17%	~15%
Hardware	Product	27%	~8%
Software	Product	38%	~25%
Content creators, artists and developers	Service	12%	~30%
Venues and events	Service	4%	~20%
Hardware rental	Service	2%	~20%

Source: Fortune Business Insights 2025, Grand View Research 2025, IDC (International Data Corporation) 2025, IMARC Group 2025, MarketsandMarkets 2025, Precedence Research 2025, Research and Markets 2024, The Business Research Company 2025.

The substantial recent investments reflect the confidence of financial players in these technologies’ ability to generate real added value while market revenues over the last five years show these new markets have evolved towards maturity.

Actor type	Category	Realized Revenue (2019–2024)	Key Insights
Infrastructure / Cloud / Connectivity	Service	USD 41.98B (2019) to USD 61.8B (2023)	Backbone for immersive experiences through cloud and 5G technologies.
Hardware	Product	USD 15.9B (2024)	Growth driven by consumer and enterprise demand for AR/VR devices.
Software	Product	USD 15.9B (2024)	Expansion of development platforms and enterprise applications.
Content creators, artists and developers	Service	USD 33.37B (2023) to USD 35.99B (2024)	Dominance of individual creators and subscription-based content models.
Venues and events	Service	USD 10.1B (2024)	Rise in location-based entertainment and immersive physical experiences.
Hardware rental	Service	Data limited	Emerging demand for cost-effective access to AR/VR equipment.

Sources: Business Wire 2023, MarketsandMarkets 2024, Research and Markets 2023, SkyQuest Technology Group 2023.

Revenue analysis faces several obstacles. As of today, there is no standardized reporting system comparable to those in the financial or energy sectors that can aggregate and certify economic data from these emerging industries, especially given the highly fragmented nature of the market. Companies operating in these domains rarely publish disaggregated data by segment. Moreover, data on actual realized revenues is often reserved for clients of economic analysis firms or embedded in paid proprietary reports. This issue calls for the development of common methodological and statistical frameworks at the European level to support the growth of the immersive economy.

Despite this, the economy of VW continues the well-known dynamics of the digital economy, where a few platforms concentrate most users, creators, data, and economic value. Large platforms develop closed ecosystems where they impose access rules, control the data and content generated, and favour their own services. These dominant players expand into new markets by leveraging their existing user base and offering bundled services, thus blocking competition (Next Generation Virtual Worlds: Societal, Technological, Economic and Policy Challenges for the EU, 2023).

Moreover, to build a truly competitive market around VW, affordability to immersive experiences and devices is a prerequisite, to foster an inclusive, equitable, and sustainable market.

To go further on a responsible and resilient economy, these technologies offer performative tools to improve green finance (see next section) or to bring ESG criteria to life in dynamic and intelligible ways can help reinforce methodological rigor, break down internal silos, meet growing demands for accountability, and support the development of more robust and impactful CSR strategies. This leverage is a strategic tool to enhance the credibility and attractiveness of economic actors in the sustainable transition.

The wealth generated by the VW’ economy remains largely concentrated in services. It is therefore essential to develop a strategic vision that values authors, creators, and innovators, supports the emergence of independent creation and distribution solutions, and invests in sovereign hardware. This multi-pronged strategy is a key lever for building fairer, more ethical, and more resilient economic ecosystems. Such a dynamic would strengthen the attractiveness of the European market, boost research and innovation, and help attract and retain talent on a global scale.

Economic models and future perspectives

VW are seeing the emergence of several economic models at varying stages of maturity.

The most developed model currently is service provision, involving the production of IP or experiences billed to clients, often with IP rights transferred to the client. While effective, this model relies heavily on commissioned work, limiting recurring revenue streams.

Another driver is the sale or exchange of digital goods, often purchased with platform-specific virtual currencies or blockchain-based tokens. This model, drawing from Web3 principles and the digital scarcity economy, shows growth in immersive social environments. However, interoperability of digital currencies remains limited, and the ability to convert them back into fiat money is often uncertain, posing challenges for liquidity and real economic value extraction.

The monetisation of IP represents a significant transformation of the creative economy, driven by new hybrid economic models such as subscriptions, licensing schemes, pay-per-use, video on demand, or marketplaces for 3D assets. Revenues from digital licensing are projected to exceed USD 80 billion by 2026. While more sustainable and enabling passive income, this model tends to favour strong distribution actors and often excludes authors of experiential content. Implementing programmable royalty mechanisms could rebalance the value chain, ensuring continuous and automated compensation for original creators. This requires cultural transformation and tailored training for creators to adopt new tools and scalable business models.

The monetisation of data generated through interactions in VW is a major strategic asset. This data is more granular, contextual, and behaviourally rich than traditional web data. With its strict regulatory framework, particularly GDPR, Europe is uniquely positioned to offer a distinctive and ethical alternative. The EU could lead a new economic paradigm by promoting revenue redistribution models based on royalties or data dividends, for instance, by making data used to train generative AI models traceable and compensating original content creators proportionally. Considering that the VW sector already comprises 3,700 actors in Europe, and the personal data economy is projected to exceed USD 1 trillion globally by 2030, such reallocation mechanisms hold significant potential. A model where users are compensated for their data could fundamentally disrupt current competitive dynamics, positioning Europe as a pioneer of a more ethical, equitable, and autonomous immersive web.

Affordability: A key issue for competitiveness

To build a truly competitive market around VW, accessibility to immersive experiences is a prerequisite. This requires lowering entry barriers at two levels: hardware (access to XR devices) and software (optimised, resource-efficient, and cross-platform applications). Content must run on a wide range of devices, including low-power ones, with cloud computing offering a sustainable path. Widespread adoption of applications and services depends on their integration into daily life and democratised access, especially for populations with limited digital access. Affordability is therefore a strategic lever to ensure the economic viability of creative businesses and to foster an inclusive, equitable, and sustainable market.

Research topics for economic sustainability

3c.1 Innovative frameworks for data monetisation

The monetisation of data generated through interactions in VW represents a major strategic asset in the evolving digital economy, offering data that is more granular, contextual, and behaviourally rich than that from traditional web platforms. Exploring the exploitation of such data could possibly enable European companies of all size to be able to compete with leading non-European players that are using the wealth generated by user data. Be able to offer low price points on the use of their solutions.
Europe, with its robust regulatory framework like GDPR, is uniquely positioned to establish a distinctive and ethical economic paradigm by promoting revenue redistribution models, such as royalties or data dividend compensating users for their data use could fundamentally disrupt current competitive dynamics, positioning Europe as a pioneer of a more ethical, equitable, and autonomous immersive web.

Problem Definition and Research Gap: Despite the strategic value of data monetisation in VW, there is a significant gap in developing and implementing innovative frameworks, methods, and tools specifically adapted to these immersive and AI-driven environments. Current economic models primarily focus on service provision or digital goods sales, which have limitations. While the potential for revenue redistribution (e.g., traceable data for AI training leading to compensation for creators) is recognised, practical mechanisms for implementing such models at scale, ensuring fairness, proportionality, and adherence to European values, are not yet fully defined or widely adopted. Research is needed to bridge this gap, translating ethical aspirations into viable economic models.

Research and Innovation Objectives:

• Investigate innovative frameworks, methods, and tools for designing data monetisation models, particularly those adapted to virtual and immersive and AI environments.
• Investigate, support, and design the introduction of a "fair trade" label for VW to promote towards fairer and more equitable trade standards

3c.2 Affordable and accessible immersive technologies

To build a truly competitive and inclusive market around VW, affordability and accessibility of immersive experiences are prerequisites. This requires lowering entry barriers on both hardware (access to XR devices) and software (optimised, resource-efficient, and cross-platform applications) levels. Ensuring content can run on a wide range of devices, including low-power ones, and leveraging cloud computing, is crucial for democratising access. When access is democratised, especially for populations with limited digital access, applications and services can achieve widespread adoption and become part of people’s daily lives, thereby ensuring the economic viability of creative businesses and fostering an inclusive, equitable, and sustainable market.

Problem Definition and Research Gap: A key barrier to the widespread adoption and economic viability of VW is the lack of affordability and accessibility of immersive technologies. This creates a digital divide, limiting equitable access across different socio-economic and geographic populations. Currently, there is a research gap in innovating design and distribution methods that can effectively lower the entry barriers for XR devices and ensure that software is optimised, resource-efficient, and cross-platform compatible. The challenge lies in developing solutions that enable content to run efficiently on a wide range of devices, including low-power ones, and in fully leveraging cloud computing as a sustainable means to achieve broad accessibility, ensuring that VW do not become exclusive to a technologically privileged segment of the population.

Research and Innovation Objectives:

• Innovate in the design and distribution of affordable and accessible immersive technologies to reduce the digital divide, ensuring equitable access to VW across different socio-economic and geographic populations.

Foundations for innovation, Intellectual Property and creativity

VW represent a pivotal technological frontier where digital and physical realities converge, enabling transformative processes across diverse sectors. While these immersive digital environments offer substantial benefits, legal uncertainties, particularly in IP rights (IPRs), present challenges for innovation, human creative labour, and public and private investments. Comprehensive, interdisciplinary normative analysis of these legal dimensions is param

Research topics for innovation, Intellectual Property and creativity

3c.3 Legal insights and frameworks

VW are inherently content-intensive ecosystems, heavily reliant on digital assets commonly protected by copyright and other IPRs. In an era where intangible assets constitute up to 90 percent of companies’ market value, transparency and fairness in terms of IPR ownership and exploitation are a policy priority. By developing novel legal insights and frameworks, Europe can establish global standards, moving beyond merely conforming to international developments. This will empower European companies, researchers, and policymakers to confidently and sustainably drive innovation forward, ensuring Europe’s competitive advantage in VW.

Problem Definition and Research Gap: Pressing questions arise as to the application of existing rules on IP validity, ownership, and exploitation to (co-)creation ecosystems in VW, where platform terms and conditions play a significant role against the backdrop of existing legal frameworks. The creative process within VW must be scrutinised from a legal perspective. VW also constitute a potential platform for new types of IPR infringement, such as unauthorised use of trademarks, requiring in-depth research on the application of various infringement grounds. The global nature of VW leads to vital questions of public and private enforcement, including applicable law, jurisdiction, burden of proof, and appropriate cross border sanctions. Moreover, traditional IPR frameworks and infrastructures are increasingly proving inadequate for managing digital innovation, particularly given the proliferation of generative AI. Fundamental questions about access, transparency, infringement, liability, governance, and remuneration for AI-generated content remain unresolved, undermining creators' incentives, researchers’ access, and industry adoption. Furthermore, the effectiveness and scope of Trade Secrets (TS) protections within VW remain poorly understood, especially given the necessity for interoperability, transparency, and standards development. Without clear legal guidelines balancing secrecy with necessary openness, Europe risks fragmenting its technological base, reducing collaboration, and undermining innovation potential.

Research and Innovation Objectives:

• Focus funding priorities and action on exploring in an interdisciplinary manner the theoretical and practical legal and policy implications relevant to the unique challenges posed by VW.
• Enable advanced research and training within Europe’s academic and research institutions, creating a skilled workforce capable of managing the intricate legal and governance challenges inherent in VW.
• Resolve IP complexities and streamline data governance frameworks through targeted research programs designed to address these legal uncertainties.