VRChat: The Metaverse That’s Actually Growing

While Western media declares the metaverse dead, VRChat quietly hit record numbers — with explosive growth from an unexpected direction.

The Narrative vs. The Numbers

“The metaverse is dead.”

You’ve read it a hundred times. Meta’s pivot away from the metaverse branding. The VR headset market forecast to decline 42.8% in 2025 according to IDC. Jessica Young, an independent VR content creator specializing in Horizon Worlds, openly calling it a “VR winter” in interviews.

And yet.

On New Year’s Eve 2025, VRChat hit 148,886 concurrent users — a 9% increase over the previous year’s record. Not a decline. Not stagnation. Growth.

So what’s actually happening here?

Japan’s Explosive Growth

Here’s the data point that complicates the doom narrative: Japan has more than doubled its share of VRChat’s user base in two years.

As of late 2025, Japanese users account for over 27% of VRChat’s web traffic — second only to the United States. In 2023, that figure was just 12.9%. That’s more than a doubling in two years, making Japan the fastest-growing major market for social VR.

The catalyst has a name: the “Sutanmi boom” (named after Sutanmi Japan, a popular Japanese streamer who brought mainstream attention to VRChat through viral videos and livestreams).

Starting around June 2024, VRChat experienced a surge in Japanese adoption driven by a combination of factors: VTubers (virtual YouTubers — streamers who use animated avatars) showcasing the platform, a thriving domestic avatar creator economy, and cultural alignment with VRChat’s core appeal — self-expression through custom avatars and intimate social spaces.

The VTuber connection runs deep. Major VTuber agencies like Hololive and Nijisanji have members who openly discuss their VRChat experiences. Independent VTubers use VRChat as a content creation tool, filming music videos and collaborative streams in user-created worlds. This exposure introduced millions of Japanese viewers to the platform’s creative potential.

While Meta poured billions into corporate VR meeting products, VRChat’s Japanese community was building something else entirely: a space for creative self-expression, social connection, and — critically — actual commerce.

The Creator Economy That Works

Let’s talk money.

According to the “Metaverse Economy: Social VR Lifestyle Survey 2025” by researchers Nem and Mila (surveying 901 social VR users, 82% primarily on VRChat), approximately 40% of active social VR users have spent $3,500 or more on VR hardware. These aren’t casual tourists. These are committed participants who’ve invested significantly in the platform.

The spending doesn’t stop at hardware. Around 40% of users spend $350 or more per year on in-platform content — avatars, accessories, world assets, and commissions from creators. Among daily players, 43% own 50 or more purchased items.

This is a functioning creator economy. Not a speculative NFT marketplace. Not a corporate metaverse store. A genuine ecosystem where independent creators make things, users buy them, and value flows through the community.

BOOTH, Japan’s largest marketplace for digital avatar assets, has become the hub for this economy. Japanese creators produce some of the most sought-after avatar bases and accessories on the platform. A typical avatar base costs ¥3,000-¥8,000 ($20-55), while accessories and clothing items range from ¥500-¥3,000 ($3-20). Popular creators can earn substantial income from their designs.

The ecosystem has developed sophisticated tooling. Modular Avatar and Mochifitter let users combine assets from different creators. VRoid Studio provides free avatar creation for beginners. The barrier to entry is low, but the ceiling for creative expression is remarkably high.

What Meta Got Wrong

The contrast with Meta’s Horizon is stark.

In January 2026, Meta announced the discontinuation of Horizon Workrooms, its enterprise VR meeting product (shutting down February 16). Horizon Worlds continues to face criticism for low population density and simplistic graphics. Reports suggest monthly active users peaked around 300,000 before declining to approximately 200,000. The company’s mobile app pivot — which drew comparisons to Roblox and featured TikTok-style content feeds — signals a retreat from the original metaverse vision.

Meta’s approach was top-down: build the platform, market it heavily, and users will come. The company spent over $50 billion on Reality Labs since 2020. The result? A platform that struggles to retain users beyond initial curiosity. The infamous “no legs” criticism became a symbol of Horizon’s technical limitations compared to VRChat’s full-body avatars.

VRChat’s approach was the opposite: provide tools, get out of the way, and let the community build. The platform offers no first-party avatars to speak of — users are expected to bring their own or buy from creators. Worlds are almost entirely user-generated. The company’s role is infrastructure, not content.

The 2025-2026 data makes it clear: community-driven platforms are outperforming corporate ones by every meaningful metric.

The Technical Foundation

VRChat’s avatar system deserves technical recognition. Built on Unity, VRChat’s Avatars 3.0 SDK gives creators unprecedented control over their digital representations.

The system supports PhysBones (dynamic physics for hair, clothing, and accessories), VRC Contacts (interaction systems that let avatars respond to touch), facial tracking integration, and complex animation controllers. Creators can build avatars with dozens of toggleable outfits, animated expressions, and interactive elements.

This technical depth enables the creator economy. When an avatar can have genuinely sophisticated features, people will pay for quality work. When the platform restricts what’s possible, creators have nothing to sell but basic shapes.

The 2026.1.1 Update and Roadmap

VRChat isn’t resting on its success. The 2026.1.1 update, released in January, focused heavily on Groups — VRChat’s answer to communities, clans, and organizations within the platform.

The update expanded group functionality and raised the world favorites limit to 800 for VRC+ subscribers (VRChat’s premium subscription tier). This might sound like a minor quality-of-life change, but it addresses a real friction point: active VRChat users visit dozens or hundreds of unique worlds, and the previous favorites cap was a genuine limitation.

Looking ahead, VRChat’s roadmap includes Soba (their Udon 2 visual scripting replacement), continued Avatar Optimizer improvements, Steam Audio spatial audio in open beta, and expanded content gating for age verification expected in H1 2026. The Avatar Marketplace, launched in May 2025, continues to grow as an official channel for creator sales.

It’s a philosophy that signals VRChat is optimizing for its existing community rather than chasing hypothetical mainstream adoption. Give invested users what they’re asking for. Make the platform work better for the people who actually use it.

The VR Winter Is Real — Just Not Everywhere

The hardware numbers are real. VR headset sales are down. The Meta Quest 3’s launch didn’t reverse the trend. The average consumer hasn’t bought into VR.

But “VR adoption” and “social VR adoption” aren’t the same thing.

The people who did buy VR headsets — the 40% who spent $3,500 or more — are using them. They’re logging into VRChat regularly. They’re spending hundreds of dollars a year on digital goods. They’re building communities that span years and continents.

VR isn’t dying. It’s consolidating around its core audience. And that audience is increasingly global, with Japan leading the growth.

The Metaverse Isn’t Dead

It just looks different than the boardroom presentations promised.

The billion-dollar corporate metaverse — the one with the Super Bowl ads and the enterprise partnerships and the celebrity appearances — that vision is struggling. The metrics don’t lie.

But the metaverse as a concept — persistent virtual spaces where people socialize, create, and exchange value? That’s alive and growing. 148,886 people counted down to midnight together in VR, scattered across dozens of user-created worlds.

VRChat didn’t build “the metaverse.” Its community did. And they’re still building.

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Data sources: VRChat official announcements, Nem x Mila “Metaverse Economy” survey (2025), IDC quarterly reports, Similarweb traffic data.

Understanding the Platform’s Appeal

What makes VRChat work where others have failed? Several factors contribute to its success.

First, the social density matters. VRChat’s world capacity system ensures that popular worlds feel populated rather than empty. When you visit a social hub, you’ll find people to interact with. This contrasts sharply with Horizon Worlds’ reported issues with empty instances and low population density.

Second, the avatar investment creates stickiness. When users have spent money and time customizing an avatar they love, they’re invested in the platform. That avatar represents hours of work or hundreds of dollars — it’s not something they’ll abandon lightly. This attachment drives retention in ways that corporate platforms struggle to replicate.

Third, VRChat benefits from network effects that compound over time. Friends invite friends. Creators attract audiences. Communities form around shared interests. These organic growth mechanisms don’t require marketing budgets — they require a platform worth sharing.

Looking Forward

The question isn’t whether VRChat will survive the “VR winter.” It clearly will. The question is whether the broader VR industry will learn from its success.

Community-driven development. Creator-first economics. Technical depth that rewards investment. These aren’t revolutionary concepts, but they’re consistently ignored by corporate platforms chasing quick mainstream adoption.

VRChat’s growth suggests an alternative path: build for the committed audience first, and let them build the reasons for others to join.

The metaverse isn’t dead. It’s just being built by the users, not the corporations.