When will the true metaverse be here?
Too big to ignore but its future is far from certain: This is the metaverse! It could generate USD 4 trillion – 5 trillion in value by 2030, consultancy McKinsey estimates. It could in ten years contribute 2.8% to global GDP, estimates consultancy Analysis Group in a study commissioned by Meta. Impressive potential, but the true metaverse is still a long way off.
A majority of experts in a Pew Research survey say that by 2040, the metaverse will for a half billion people or more globally be a well-functioning part of daily life.
Meta’s trust in the metaverse is confirmed by the fact that its CEO, Mark Zuckerberg, even changed the name of his Facebook to Meta to be prepared for a booming metaverse. A new survey shows a quarter of executives believe more than 15% of company revenue will come from the metaverse in the next five years.
About 60% of consumers who already use the metaverse prefer metaverse features that are useful for the physical world. More futuristic ideas are less interesting.
Gaming is already established in the early metaverse but the integrated or true metaverse is a long way off but companies have to get ready for it, is the conclusion from statements by McKinsey.
Talking about the attraction of the metaverse the company’s experts wrote: “With the real world beset by problems (such as war, COVID-19, inflation, and inequality), the metaverse offers an escape. That’s probably part of the attraction for the millions of customers who are flocking to early-stage metaverses. CEOs should ensure they are meeting their customers where they live—both virtually and IRL”.
They say market value of metaverse activity in June 2022, was calculated to be USD 200 billion – USD 300 billion.
“It’s larger now, and in eight years or so, it could be USD4 trillion to USD 5 trillion, which is roughly the size of Japan’s economy, the third largest in the world. Exponential growth is possible because of an alignment of several forces: the metaverse’s appeal spans genders, geographies, and generations; consumers have already shown they are ready to spend on metaverse assets; they are open to adopting new technologies; companies are investing heavily in the required infrastructure; and brands experimenting in the metaverse are finding that customers are delighted.”
The authors say the potential is so large because the metaverse is a combinatorial technology: it combines elements of many of the top trends identified this year as most promising, including AI, immersive reality, advanced connectivity, and Web3.
An 2022 survey showed 95% of business leaders expect the metaverse to have a positive impact on their industry within five to ten years, and 61% expect it to change the way their industry operates.
The article lists two of the largest and more advanced uses for the metaverse, one for consumer businesses and one for B2B companies: Brand marketing and consumer engagement and digital twins—virtual replicas of physical settings and objects in a metaverse that generate data in real time.
The authors say that the development of the metaverse is a few years away from a true tipping point.
“It could easily take longer (though that’s no reason not to prepare)”, they write and quote Brian Solis of Salesforce saying generational changes like Web 1.0, social media, and mobile “rarely happen overnight. They take years and are the result of an accumulation of incremental technological advances, evolving consumer demand, and cycles of experimentation.”
“Our latest Metaverse Consumer Survey finds that while many metaverse initiatives are pushing the boundaries of technology, they often miss the mark with consumers. In fact, winning in the metaverse is often about meeting more mundane needs: providing consumers with value-added products and services they can use today, either separately or in combination with the physical world”, McKinsey says.
Key results:
- Consumers appear less interested in more futuristic offerings. Consumers are more willing to pay for product offerings that tie back to the physical world in some way than for those that are purely virtual. For example, in the fashion and beauty category and in the home category, consumers ranked virtual events and virtual homes in the bottom two use cases.
- Consumers want real-world applicability. They are also less excited about products or services in the metaverse that don’t connect to their daily real-world activities. For example, about 30% of consumers attributed their lack of interest in fitness-specific use cases to a lack of interest in the same application in “real life.” Instead, they favor use cases such as “at home try ons” that bridge the physical and the digital world.
“While about 50% of consumers rank fashion and beauty in their top two categories for metaverse commerce, current offerings are failing to capitalize on that enthusiasm. Many brands are investing in creating immersive, digital-only metaverse experiences (especially when it comes to apparel and beauty shopping), but consumers are less excited about walking through digital stores than about metaverse applications augmenting the physical-world shopping experience.”
Consumers were most excited about experiences augmenting and complementing their physical-world experiences, especially those helping them with the fitting of clothes.
Using the metaverse for nightlife and affinity or affiliation groups ranked lowest in this category.
“The metaverse will require many new technologies, innovations, and discoveries before it can be fully realized”, according to the Analysis Group.
The metaverse landscape is fragmented and still lacks any single dominant player. This could create an opportunity for companies to use mergers and acquisitions to purchase critical components and fill strategic gaps, according to consultancy Deloitte.
Metaverse as a shopping channel is still in early stages. Anyway, 26% have used the platform for entertainment, virtual experiences or purchasing products in 2022, consultancy PwC’s says a global consumer survey shows.
“The largest portion of these users have primarily employed the metaverse for virtual reality (VR), i.e, playing games or watching a movie (10%), joining a virtual world, i.e, experience a retail environment or concert (9%), or purchasing a digital product, such as a Non-Fungible Token, or NFT (9%)”, the PwC survey shows.
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