Hololive’s IPO: why a virtual talent agency became a real‐world market darling

On March 27, 2023, Cover Corporation, the operator of Hololive, listed on the Tokyo Stock Exchange's Growth Market with a market capitalization of 70 billion yen. This marked the world's first IPO for a company specializing in virtual talent. The company's vertically integrated “content × tech” model, which includes owning avatar IP and in-house development of motion capture and streaming infrastructure, was recognized by the capital market.

Since its listing, the company has expanded beyond mere streaming services, diversifying its revenue streams into e-commerce, live events, music, and games. For the third quarter of the fiscal year ending March 2025, cumulative revenue reached 288 billion yen—a 50% increase from the same period last year—while operating profit also rose by 58% to 55 billion yen, continuing its double-digit growth. The fastest-growing segment was merchandising, with trading cards and limited-edition goods capturing the demand for “fandom activities,” driving segment sales up by 77%.

There are three reasons why investors view the growth of the VTuber market as secure.

Release new products when the time is right

The company's growth this fiscal year is expected to continue with the official release (Ver. 1.0.0) of its metaverse, Holoearth, in April 2024. Holoearth includes a marketplace where users can create and sell their own costumes and stamps, a “My Shop” feature where users can creating their own virtual storefront, and the Hololive Official Shop.

Cover positions this as a “device to evolve fans into creators” and aims to expand its economic ecosystem centered on user-generated content (UGC). Japan's fan communities, long-familiar with anime-style avatars and secondary creation culture, have the potential to skyrocket UGC in a context distinct from platforms like Roblox or Fortnite.

This is backed by numbers. The domestic VTuber market is expected to continue growing through 2025, while the domestic metaverse market is projected to surge from 186.3 billion yen in 2023 to 1.87 trillion yen by 2028, with a growth rate surpassing that of VTubers.

If Hololive can connect its top VTubing brand, passionate fan community, and the rapidly growing metaverse economy, the conditions for securing platform dominance will be in place.

The hurdles for Hololive to dominate the market

Of course, the path ahead is not smooth. First, the payback period for technological development costs is long, and user acquisition is not easy. Second, the risk of IP dependency—where revenue is concentrated in a few top talents who can go elsewhere—remains. Nevertheless, there are only a handful of companies worldwide that can combine anime, games, music, and live events within the same virtual world. When Hololive provides practical UGC tools and stabilizes monthly Daily Active Users at the ten-thousand level, the battle for metaverse dominance will likely be won.

Will Hololive's success story continue?

Let's take a step back and consider the future. If Japan's startup ecosystem were to fully embrace this trend, three key changes would be necessary. First, the institutionalization of fundraising backed by digital IP. If an evaluation model that recognizes avatar IPs as an asset capable of generating future cash flow becomes widespread, the number of creator-led studios would explode. Second, the development of virtual special zones initiated by local governments. By expanding startup visas and replicating local tourist attractions in metaverse spaces, regional economies can connect with the VTuber economy. Third, the integration of generative AI and real-time streaming technology. If AI can handle not only simultaneous translation but also production assistance and fan behavior analysis, Japanese-language creators can instantly enter the global market.

If these conditions are met, Japanese virtual talent companies will no longer be merely entities delivering “cute characters” to the world, but will transform into the standard specifications of the metaverse economy—hubs that integrate communities, commerce, and cultural narratives. The success story of Hololive may merely be the prologue to this transformation.

For more details, please check out the our previous article about the business of VTubing: https://www.blackboxjp.com/stories/vtubers-are-changing-the-otaku-market-in-japan

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