Holoearth has collapsed! Burning 3.2 billion yen, why is the VTuber metaverse still unable to take off?

Japan’s VTuber giant Hololive’s parent company Cover announced that the metaverse platform “Holoearth” will shut down, recognizing a loss of approximately 3.2 billion yen. This article will explore this costly project and the reasons behind its ultimate failure.

Holoearth is about to close, the VTuber metaverse has failed

Japan’s VTuber giant Hololive’s parent company Cover suddenly announced yesterday (5/14) that their metaverse platform “Holoearth” will cease operations on June 28, and simultaneously recognize a special loss of 8B yen in their latest financial report, sparking heated discussions among fans in Taiwan, Japan, and other countries.

This article will review the development history of “Holoearth,” compile official statements from Cover and discussions among players, and explore the reasons behind this costly project’s failure.

Holoearth was launched during the peak of the metaverse craze

In recent years, VTuber has emerged as a new type of YouTuber, quickly moving from niche to mainstream visibility. Cover, which owns 47 channels with over 63 million total subscribers, is a well-known VTuber talent agency in the industry.

Image source: VTuber Ranking

Leveraging its large fan base, Cover announced the “Holoearth” project in 2021, with a formal release scheduled for April 2025.

“Holoearth” is a metaverse project based on the Hololive universe, featuring multiple gameplay modes such as sandbox, survival adventure, and virtual concerts. Players can interact in virtual lobbies, explore together with VTubers and other players.

• **Related report:**Holoearth official version launched! How to play and earn? Game features and gameplay overview

Cover CEO Yagoo Hasegawa (nickname: Yagoo) once stated that he hoped to create a dedicated social space through “Holoearth.” At that time, Cover aimed to deeply integrate the metaverse with VTuber culture and generate high revenue through concert ticket sales and virtual item sales.

Image source: Cover

Reasons for Holoearth’s failure, related to too many elements?

Although initially confident, “Holoearth” only lasted a year after its official launch before quietly shutting down.

Regarding the reasons for “Holoearth”’s failure, Yagoo Hasegawa admitted at the financial report press conference that the team added live streaming activities and games to the project, resulting in too many elements, which led to subpar functionality. This not only increased the burden on their VTubers but also failed to leverage the IP’s influence.

After recognizing a loss of nearly 3.2 billion yen, Cover’s management team has voluntarily returned part of their salaries. However, the virtual avatar technology and 3D motion capture efforts developed during “Holoearth” will be integrated into their existing live streaming business to strengthen core operations.

Additionally, Cover announced future strategies, including a new project called “mekPark,” similar to a trainee system, which will regularly hold auditions to discover new talent, thereby solidifying their talent pool and enhancing operational capabilities.

Image source: Cover

PTT users point out the fatal flaw, Holoearth feels like a semi-finished product

The announcement of “Holoearth”’s end sparked lively discussions among communities in Taiwan and Japan.

On the PTT forum’s West Lounge, Taiwanese netizens generally believe that the game lacks engaging content, which is related to Cover’s lack of experience in game development.

Players pointed out that although “Holoearth” features building and monster fighting elements, the gameplay experience feels like a semi-finished product. Expectations for rich storylines involving Hololive members were unmet, as the official version lacked Hololive’s distinctive features. Additionally, server stability was poor.

“Holoearth” is contrasted with another fan-made game brand by Cover called “Holo Indie.” This brand mainly encourages fans to create fan-made games and allows commercial sales. Through mutually beneficial collaborations with fan developers, they extend the influence of the Hololive IP.

Image source: Steam

Although these fan-made “Holo Indie” games are not AAA titles, they have accumulated 61 titles so far. With active live streams by VTubers introducing these games, some downloads have even reached hundreds of thousands. This shows that even with limited technical resources, integrating member elements properly can attract fans.

Holoearth’s failure proves that the metaverse is still too early

In the author’s view, the failure of “Holoearth” is a microcosm of the waning interest in the metaverse concept.

Meta spent a lot of money on virtual reality and headsets, but “Horizon Worlds”’ graphics were underwhelming, even worse than some commercial games; “Holoearth” showed advantages in creating VTuber virtual concerts but couldn’t hide the lackluster or even hollow content elsewhere.

When “Holoearth” was announced, it coincided with the Meta metaverse, NFT land craze, but by 2025, market sentiment had already shifted. Even this year, Zuckerberg himself considered shutting down the VR version of “Horizon Worlds” (though he retracted after user backlash). Whether due to immature technology, post-pandemic social environment changes, or the return of traditional social interactions, it repeatedly proves that the metaverse is still too early for humanity.

Now, as a publicly listed company, Cover must face reality. The enthusiasm for the VTuber industry has cooled from its pandemic peak.

Hololive personnel changes have already been significant, with major talents like Gawr Gura, Minato Aqua, Salome, and Shion Sazaki leaving in recent years. Recently, they also announced major cuts to their “Holostars” male group support. The end of “Holoearth” is a good opportunity for Cover to refocus on their core VTuber live streaming business.

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