It’s not like virtual performers are something new. Pioneers in the field were a bunch of animated chipmunks and, by the way, their "The Chipmunk Song," released in 1958, was the most popular Christmas song of all times until Mariah Carey came around with her holiday audio blockbuster.
Ten years later came The Archies, pretty much the first "band" that existed only on TV screens. Another epically successful virtual artist was Gorillaz, created in 1998 by Damon Albarn and Jamie Hewlett. The band has racked up 10 billion streams so far, and is still going strong, currently holding the 165th spot in the list of the most streamed artists of all time. Another classic example is Hatsune Miku, a vocal synthesizer created from samples of voice actress Saki Fujita by Crypton Future Media. It was first released in 2007 by now having over 100,000 released songs and even a highly anticipated collaboration with Fortnite that was announced in January 2025.
And now we have VTubers — virtual YouTube performers who are changing the game. COVER Corporation, a Japanese company recently making moves to the US market, runs 90 of them, and they've got 80 million subscribers. That's a lot of people watching animated characters sing, chat, and play games.
"The Japanese animation market has expanded to $20 billion over the past decade," says Motoaki Tanigo, CEO of COVER Corporation. "VTubers appeal to anime fans worldwide with their anime-inspired aesthetics. And one advantage (of being a VTuber) is that popularity isn't tied to physical appearance," Tanigo points out. "As long as someone has skill and motivation, they can succeed."
With the expansive popularity of VR artists, we have a lot of new names popping up fast. Some were initially exploding. A good example is Polar, created by TheSoul Publishing (and she actually looks like a cheap rip-off of Hatsune Miku, targeting easily impressionable children) . She went from zero to 1 million TikTok followers in just five months. Now she's got 6.19 million YouTube subscribers, although recent videos’ are a complete flop.
Especially compared to YouTube uploads from Hatsune Miku, who has half the subscriber count at the moment of writing.
But that’s not the only disaster in the VR artists space. Chad Gerber, platinum-selling artist and a founder of Meloscene, a platform for AR/VR artists’ collaboration has seen quite a few of them: "The US labels' attempts have been predictably shortsighted and ill-conceived, with their most famous attempt being FN Meka by Capitol, which was a giant ball of racism."
The money's flowing in from all directions. According to Gerber, "They approach monetization from as many angles as they like with Twitch tips, merchandise, and overall creator models where they gain attention and fan interaction through several platforms."
And it seems to be working. According to the polls by Influencer Marketing Hub in 2023 60.4% of respondents from the US said they “used” virtual influencers.
Behind the digital curtain
So what do you do if you want to become a virtual star? Well, you'll need a bit more than just a pretty pixel face.
"The technology behind VTubers includes face tracking through image recognition with iPhones and PC cameras and body tracking using advanced optical motion capture equipment," explains Motoaki Tanigo, CEO of COVER Corporation.
But there's a difference between doing it from your bedroom and running a full-scale virtual entertainment operation. COVER Corporation, for example, runs "one of Japan's largest motion capture studios," as Tanigo mentions. They've got state-of-the-art broadcasting systems and music recording facilities to make those virtual concerts look good.
"For someone to get started they only need a computer, motion capture software or wearable MoCap gear to combine with their software of choice," says Chad Gerber, founder of Meloscene. But he adds that "the most expensive tool is top-tier marketing and money to open the gatekeepers who want a cut of this."
The basic setup is pretty straightforward: software like VMC (Virtual Motion Capture), XSens, and OBS Studio for streaming. Add VSeeFace to put your virtual face on screen, and you're good to go. Well, kind of.
"Anyone can become one but you have to produce value," Tanigo points out. "Like a movie, anyone can record one, but not everyone can make Lord of the Rings. With simple software you can stream using a simple avatar, but body tracking with high quality 3D models, several cameras, editing, 3D backgrounds, concerts... that's something one can't do by themselves."
The big companies are trying to get in on the action too, but they're pretty bad at it. According to Gerber, "Meta is aware and working to facilitate some of this through Meta Horizon's, but since the tech world traditionally is less artistically inclined than, say, the art world, the fusion of the two spaces is painfully bad."
And the tech setup keeps getting more complex. Some artists are learning Blender, Unity, and Maya to create "more of a multifaceted experience," as Gerber puts it. There's even AI music generation through platforms like Suno and Soundful. The result? As Gerber puts it, this lets "technically inclined people" show off their visual skills while pumping out "subpar music."
Want to do it properly? You'll need teams — lots of them. COVER Corporation runs CG teams for illustration and 3D modeling, studio teams for video streaming, and live event teams for organizing performances. And if you want to join their Hololive Production, you'll need to pass an audition first.
But changes are coming. "In the near future, movies will become like releases by Spotify artists, where anyone can make a blockbuster in their room," Gerber predicts. And he might be right. But as of now, there's still a gap between your bedroom setup and those million-dollar virtual concerts.
The economics of virtual entertainment
Virtual artists tend to make very real money these days. COVER Corporation's financial report is a good indication of this: ¥10.688 billion in Q2 revenue (about $68 million), up 49.8% from last year. That's quite good for managing virtual performers.
"Monetization includes streaming revenue from platforms like YouTube, merchandising, licensing, corporate advertising campaigns, and large-scale live concerts in arenas hosting 10,000–20,000 attendees," says Motoaki Tanigo.
If you want details on the split: for COVER Corporation streaming brought in ¥2.184 billion, concerts added another ¥1.144 billion, and merchandise — ¥5.879 billion. And the company predicts an expected annual revenue per VTuber at ¥402 million (about $2.5 million) by Q2 2025.
So while virtual performers rake in money from multiple sources — YouTube streams, Twitch tips, merchandise, and virtual DJ gigs — the big companies might be getting ready to cut out the human element entirely.
"Right now, it's a land grab," Gerber points out. “Labels are building this in-house now, so we will soon be seeing and experiencing AI artists who look 100% real and sound real but are anything but real. This allows them to keep 100% of the profits without any of the artist drama or payout. The model's pretty simple — get fans to watch you on YouTube, follow you on TikTok and Instagram, then sell them stuff. Virtual stuff, real stuff, doesn't matter as long as they're buying. "
Industry impact and future trajectory
Virtual concerts bring in some pretty serious cash. When Travis Scott performed in Fortnite, he made $20 million in one show — compared to $1.7 million for a single night of his real-world Astroworld tour.
His concert pulled in 27.7 million unique viewers and 12.3 million concurrent players. His YouTube video of the show hit 160 million views. And his music streams were up 38% the week after.
Ariana Grande followed his lead with her own Fortnite concert series, the Rift Tour. And well, she didn't do too bad either — $20+ million in profits from a three-day virtual event. Her song "Be Alright" got a 123% boost in streams right after the show.
Billie Eilish jumped on the VR train too, using virtual and augmented reality for her promotional campaigns on various platforms.
Some big labels are starting to catch on. Universal Music signed Mori Calliope, a virtual performer who's now selling out venues like the Hollywood Palladium. And in Japan, virtual artists are doing collaborations with mainstream performers all the time.
"Thanks to advancements in AR technology, collaborations through short videos or live streams have become easier," says Motoaki Tanigo. "VTubers are likely to become a significant platform for talented individuals who prefer not to reveal their identities."
"The collaborative element of all types of artists working together is going to drastically change," believes Chad Gerber. "A talented artist in their bedroom can create an experience in even more depth than the one that took tens of millions of dollars."
But let's be real, not everyone is going to make it big. Just look at Anna Indiana, an AI singer whose music is so bad it's become a meme. The tools might be getting better, but talent still matters.
"Since everyone is now an 'artist', we're fully into the creator-consumer model," Gerber points out. "We're seeing right now a total shift in art and consumption, top to bottom, where people get to experience unlimited creative potential within platforms that facilitate all types of artistic expression."
So yes, the big companies with deep pockets will probably keep making most of the money. And mainstream artists will keep finding new ways to cash in on virtual tech. But for the first time, that bedroom producer with great ideas but social anxiety might actually have a shot. And that's something to look forward to.
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