Value creation in the metaverse
The metaverse is still being defined, both literally and figuratively. Its potential to unleash the next wave of digital disruption seems increasingly clear. Examining its potential effect should be part of strategy discussions. The metaverse has the potential to be the next iteration of the internet. It may seamlessly combine our digital and physical lives. But the pace of its development will depend on multiple technological and user experience factors. The metaverse's technology stack has four core building blocks: content and experiences, platforms, infrastructure and hardware, and enablers. Ten layers span these components, providing the critical building blocks on which all metaverse experiences are based. Large technology companies, venture capital (VC), private equity (PE), start-ups, and established brands are seeking to capitalize on the metaverse opportunity. Multiple factors are driving this investor enthusiasm, including ongoing technological advances across the infrastructure required to run the metaverse.
A survey of more than 3,400 consumers and executives found significant excitement about the potential of the metaverse. 95 percent of business leaders expect the metaverse to have a positive impact on their industry within five to ten years. The metaverse is shaping up to be the biggest new growth opportunity for several industries in the coming decade. It has the potential to enable new business models, products, and services. The potential impact of the metaverse varies by industry, although we believe it holds implications for all. For instance, we estimate it may have a market impact of between $2 trillion and $2.6 trillion on e-commerce. Business leaders should develop a strategic stance by defining metaverse goals and the role they want to play. The metaverse also poses urgent challenges that cut across firms, their employees, independent developers and content creators, governments, and, of course, consumers. Part of the workforce will need to be reskilled to take advantage of it rather than compete with it. The metaverse is at an inflection point in its development. The direction it takes is tied to stakeholders' collective actions. Of course, there are also significant challenges to be overcome. Networks are too slow, and computing power is too weak. Yet it would be brave to bet against the developing solutions and billions of dollars flowing into every corner of metaverse infrastructure. The "proto-metaverse" 3 exists, fueled by a powerful force: the gaming experience. Gaming eclipses other subsectors of the entertainment industry with its popularity. Consumers and companies are already experimenting with the early metaverse.
The metaverse remains difficult to define, even though the term has been in circulation for decades. It is a gaming platform, a virtual retail destination, a training tool, and an advertising channel. The consensus view is the metaverse is the next iteration of the internet. Mark Zuckerberg says it will be the successor to the mobile internet.
Definition and characteristics
The metaverse is the next iteration of the internet that seamlessly combines our digital and physical lives. "We're trying to not define the metaverse so rigidly that it limits the imagination of creators," Square Enix CEO Yosuke Matsuda says. The development of the metaverse is gaining momentum as billions of dollars are invested. The metaverse will have three features. Ultimately, the full vision of the metaverse will also include the following.
Separating fact from fiction
The term was first coined in Neal Stephenson's 1992 novel Snow Crash. 'There's a digital extension to everything real,' says Niantic CEO John Hanke.
There are several persistent misconceptions about the metaverse. The concept is now three decades old and increasingly used by consumers and businesses. The metaverse does not represent a choice between the virtual and the real worlds. The best, superior version of the metaverse will complement rather than compete with the real world. There are no multiple metaverses. The metaverse is the envisioned end state. The metaverse is not AR/VR. Augmented and virtual reality are important interfaces to help users experience the metaverse. The metaverse is not (just) gaming. Gaming has been critical in seeding the metaverse, but the metaverse is not exclusive to gaming. Some gaming platforms are evolving to address multiple use cases.
The metaverse is not Web3
Web3, by definition, succeeds Web 2.0. The metaverse, by definition, succeeds our current computing and networking paradigm. "The fact that they both succeed what we experience as the internet today naturally intertwines". The metaverse is not only for a small group of users. There are three billion gamers in the world, spanning geographies, generations, and genders. Respondents identifying as men prioritized connectivity with people.
The building blocks of the metaverse
As a concept, the metaverse can be broken down into four core building blocks: content and experiences, platforms, infrastructure and hardware, and enablers. Importantly, capital is flowing into this technology stack. A big question is whether these building blocks and the layers they comprise will combine to form the metaverse.
Meeting the technology demands of the metaverse
The technology required to power the metaverse is recent. Yet the technology required to truly realize its potential doesn't exist. The bottom line is that advancements will be required. -Compute infrastructure. Limits of concurrency today cap the number of players. In a fully realized metaverse, many more users will need to be able to be online at once. Low-quality rendering means devices without graphics processing units cannot present photorealistic environments. High-latency "lagging" creates a sensation of video and/or audio being slow. Low bandwidth "buffering" occurs when data cannot be transferred quickly. Metaverse access today is primarily through flat screens: televisions, computers (PCs and laptops), and smartphones. We expect them to dominate for another five years before transitioning to AR/VR and eventually extending reality. pervasive. seems clear. Yet that does not mean the metaverse is guaranteed to develop into a melding of our physical and digital lives. There are questions about the ability of current technology to result in a fully realized metaverse. There's also the issue of the user experience. "If the metaverse follows the app-store model that we have today, a person has to go through the trouble of downloading an app and clicking a lot of permissions," Niantic's Hanke said.
Today's metaverse is made up of ten layers, which fall into four categories. Today's metaverse is made up of ten layers, which fall into four categories. Content & experiences Enrich the metaverse experiences-including first-party content. Applications and games are largely stand-alone experiences with limited interoperability. Many news sites, for example, provide hyperlinks from articles to external destinations, including competing news sources. Every industry faces questions about whether and to what extent the metaverse may impact it. Issues of privacy and security are only likely to intensify as the metaverse develops, raising questions for companies and governments. Interest in the metaverse has exploded. Global Google searches for " metaverse" skyrocketed 7,200 percent last year. We may one day experience the metaverse through glasses. Yet this booming interest has also made it difficult to separate hype from reality.
Following the money: What is driving investment?
Beneath the hype, the metaverse's development continues. Roblox, launched in 2006, has attracted companies including Nike 22 and Gucci 23. In the meantime, while there may be consolidation in the future, the list of metaverse platforms continues to grow.
Charting the acceleration of investment
More than $120 billion has flowed into the metaverse space already in 2022. The metaverse is a developing opportunity. The metaverse is a developing opportunity. Andreessen Horowitz recently launched Games Fund One. Total metaverse-related investment is also proving to be significantly larger than it was for AI. We attribute this to the fact the metaverse has emerged, for the most part, as a pure digital play. Sectors leading metaverse adoption today also plan to dedicate a significant share of their digital investment budgets to the metaverse. With its expanding number of use cases, the metaverse offers growth opportunities. The distribution of investments across the metaverse ecosystem can be seen as either troubling or inspiring. "What does this mean collectively? It means that this idea that we've thought of for decades is now a little bit more tangible," McKinsey senior adviser Ball said. As of October 2021, Facebook had almost three billion users on virtual platforms. Decentralized finance and blockchain gaming garnered 3.45 million and 2.36 million users.
Factors driving investor enthusiasm
Although the long-term vision of the metaverse is still to be realized, the early version of the metaverse is well established. More than three billion gamers globally are fueling it.
Ongoing technological advances
The infrastructure required to run the metaverse has rapidly improved and opened new possibilities. The full rollout of 5G will enable the processing of these large words on mobile devices. Back-end engines that drive the user experience have reduced the barrier to creation. This advancement is critical to the metaverse, as it enables the shift from more traditional 2-D internet spaces. Edge computing will play an important role in driving the computing power required to run the metaverse. At its core, edge computing enables data to be captured, stored, and processed locally. 5G technology solves the need for faster networks with lower latency. While AR/VR devices aren't yet mainstream, they're maturing fast. Software development drives metaverse applications. Microsoft is currently building and improving upon several metaverse enterprise solutions. 'Gaming is already incredibly social and you have continuous innovation of social features,' says CEO. 'But as you're trying to draw in people who don't self-identify as gamers, a more extensive set of social-engagement mechanisms is going to be required'. "A more extensive set of social engagement mechanisms is going to be required," says the chief strategy officer at Activision Blizzard.
Brands are also experimenting: Gucci has a presence across many platforms, and Nike has Nikeland in Roblox.
We only expect more examples as the metaverse matures. "Use cases beyond gaming are not just in the future, they're already emerging," says Kavya Pearlman. We envision the fully developed, long-term version of the metaverse to encompass most daily activities. We envision a world that spans five core categories. 1. Gaming has been driving the development of the metaverse. 2. Socializing extends existing consumer behavior through platforms such as Decentraland and The Sandbox. 3. Fitness often marries gaming and connectivity through providers such as Peloton. 4. Commerce includes Sotheby's proprietary marketplace for curated NFT art, 59 virtual-only fashion company Fabricant, 60, and start-ups promoting an immersive retail experience. The metaverse also has the potential to impact sectors that have long avoided digital disruption. "I hope that the metaverse and VR and AR will finally start to show actual, tangible, measurable productivity improvements," Ball said. 'Use cases beyond gaming are not just in the future, they're already emerging,' says Microsoft. -Kavya Pearlman, founder, and CEO of XR.
The metaverse will enable incremental improvements in the enterprise solutions we know today alongside entirely new innovations. Notable categories include the following: -Enhanced remote collaboration: An incremental improvement will see a move from 2-D screens to an immersive 3-D space. Online meetings in the metaverse further enable remote work and potentially diminish the need for co-locating. -Reimagined learning and development. : Simulations of real-life settings and situations will allow for a far more captivating learning process. BMW is building a digital factory twin on Nvidia Omniverse, which is expected to drive efficiency improvements across its supply chain. 50 percent of our work activities can be improved with these technologies. These include robotics, digital twins, and 3-D printing.
Dubai's Virtual Assets Regulatory Authority established Metaverse HQ on The Sandbox. -Jong-Soo Park, CIO of Seoul's Smart City Police Bureau. South Korea's capital, Seoul, announced a five-year "Metaverse Seoul Basic Plan" The objective was to "provide civic freedom, participation, engagement, and communication". "We believe that with the metaverse we can create higher-quality government services," he said. There are also emerging examples of using the metaverse to address social issues.
The metaverse and Web3
The Web3-enabled metaverse advances these opportunities. Web3 heralds a new decentralized ecosystem, in which users begin to own, monetize, and utilize their data for their benefit. It's enabled by three core technologies: -blockchain offering a universal, public, permanent, single source of truth -digital assets issued on a blockchain, representing value portability and permanence -smart contracts containing conditional programming code that create utility. Digital assets are a core component of the Web3 technology stack. Creators can freely launch new digital assets on any blockchain they desire. Noncustodial wallets enable users to access their digital possessions. Core services will need to evolve alongside emerging technologies for the Web3 metaverse to fulfill its potential. We expect the Web3 metaverse to advance rapidly through steps including the following: -creating solutions to enable the digital identification of users crossing over from the physical to virtual worlds -improving the user interface and user experience of the wallet experience. The Web3-enabled metaverse is a subject senior executive need to keep an eye on. Capture infrastructure conditions in real-time, so repairs can be made.
As of 2020, 48 percent of all gamers in China are 71 and 41 percent of all US video game players. Identified as female. A global community of independent developers and creators is on the rise. Developing immersive, engaging content is increasingly shifting toward individual content creatives. A thriving creator economy has emerged, powering user-generated content diversity across virtual platforms. We expect the creator economy to see further tailwinds as decentralized Web3 platforms emerge.
Growing consumer openness to a new kind of internet
Consumers are increasingly expressing discontent with many aspects of the internet. In parallel, creators are increasingly expressing discontent with the way content is monetized. Both trends are contributing to the Web3 movement gaining momentum globally. The metaverse sits at this inflection point in its evolution due to factors ranging from the size of the opportunity to drivers of expected growth. We believe the intense interest of the past year ignited dramatic corporate experimentation. 'It's a virtual immersion into the next generation of the internet,' he says. -Brian Solis, global innovation evangelist at Salesforce. In the past two years alone, many have rapidly and largely seamlessly adjusted to carrying out more daily activities virtually. Yet even as many companies and industries push the digital frontier, others remain hesitant.
How consumers view the metaverse
Almost 60 percent of consumers we surveyed are excited about the transition of everyday activities to the metaverse. Connectivity is the number one driver of excitement.
Scanning the horizon: How is consumer and business behavior evolving?
60 percent of consumers are excited about the transition of everyday activities to the metaverse. Yet, connectivity also encompassed a broad range of activities. Travel is another activity respondents were "excited" or "very excited" about. Main themes in metaverse-specific travel related to the possibility of going beyond the limits of the physical world.
What consumers are doing already
Of the two-thirds of consumers who have experienced the metaverse, 80 percent appreciate shared virtual experiences with friends and family. 63 percent prefer virtual work meetings, and 59 percent enjoy virtual education sessions. Consumers are looking forward to shifting a range of their activities to the virtual world. The conventional core audience for gaming continues to solidify the central role of gaming in today's entertainment landscape. 81 percent of Gen Z have played video games in the past six months, averaging 7.3 hours per week. "Social commerce"-integrating commerce with social media entertainment-is already estimated to comprise almost 15 percent of total retail in China. Consumer spending on digital assets in the metaverse will only grow. Excitement about the metaverse increases with income. About 79 percent of consumers active on the metaverse have made a purchase. 79 percent of consumers active on the metaverse have made a purchase, mainly to enhance their online experience. In-game purchases improve my in-game experience.
How executives view the metaverse
While the metaverse is still evolving, one thing seems clear: senior executives' belief in its potential. 95 percent of senior executives expect the metaverse to have a positive impact on their industry. 61 percent expect it to moderately change the way their industry operates. 65 percent expect metaverse technology to drive more than 5 percent of their organization's total revenue. Companies with more proactive metaverse adoption were already reporting greater financial success.
Early adopters are looking for a varied set of capabilities, including content creation, corporate strategy, and cybersecurity. Contemplators share building business models, infrastructure and back-end engineering, and product design among their top five capability needs. Metaverse adopters most commonly implemented marketing campaigns or initiatives. 63 percent have undertaken learning and development for employees. 53 percent have held virtual meetings.
Senior executives with high confidence in the metaverse driving revenue impact are already building capabilities within their organizations. Yet respondents also cited several barriers to entry to the metaverse.
Executives highlight revenue uncertainty as a key barrier and worry less about the technology involved. AI formally emerged as a concept during World War II. The metaverse is in its early stages and far from its potential end state. Users are accustomed to what it currently provides and excited about what it could become.
A possible $5 trillion impact
A few years ago, investment in artificial intelligence was estimated at up to $10 billion. It is now $93 billion. We expect the economic value of the metaverse to rise exponentially. in the development of metaverse infrastructure; and brands experimenting in the metaverse are reporting positive consumer feedback. This adds up to substantial potential economic value for the metaverse. Our estimate of the metaverse's potential impact by 2030 is based on a bottom-up view of consumer and enterprise use cases. The most relevant metaverse use cases during the next decade were identified, with the overall enterprise IT share of spending dedicated to these metaverse use cases estimated and pressure-tested with experts. In short, our forecast is our best estimate given the very high levels of technical, and regulatory.
Potential sector implications
The metaverse is emerging as the biggest new growth opportunity for several industries. Industries are already implementing metaverse initiatives. Most efforts to date have been centered around marketing. The opportunity to do this is captured in Exhibit 13, which examines four types of use cases. -Net-new business models and revenue sources that project a company's penetration further into markets. An example would be retailers using the metaverse to drive the sale of physical products. -Operations that produce higher productivity and collaboration, and lower costs. In the technology sector, that may be an efficient digital network of data centers in multiple locations at the same time. Initiative preferences vary by industry; meetings and events are of particular interest to healthcare, and travel, transport, and logistics. Financial institutions created branches in the metaverse, offering immersive brand engagement. -New products and services that provide seamless discovery, purchase, and post-purchase journeys. For manufacturers, that could mean fully personalized products. Of all the potential drivers of the economic impact of the metaverse, e-commerce is the largest. We estimate it may have a market impact of $2 trillion by 2030.
Apparel, fashion, and luxury
Shoppers already spend much of their day using digital screens. Is this where they will look to buy and wear fashion? Decentraland's Metaverse Fashion Week in March received more industry attention than any digital fashion event before it. Many brands are already embracing the opportunity to launch virtual clothing. "This opens up a whole new revenue model for brands," AnamXR CEO says.
How companies currently use the metaverse
The fashion industry's early experiments with virtual worlds have largely been via launches of virtual clothing. We believe the longer-term opportunity for fashion brands is engaging consumers with NFTs. 'Consumer behavior has largely shifted toward adopting digital personas,' says the company. 'This opens up a whole new revenue model for brands who can supply digital assets like clothing, for example'. -Irene-Marie Seelig, cofounder and CEO of AnamXR. Gucci launched the Gucci Garden-a two-week art installation on Roblox that attracted 20 million visitors. 100 Louboutin partnered with the Korean gaming app Zepeto to launch a virtual "Loubi World". Gamified experiences have also proven a powerful channel. Vans' "Vans World" on Roblox attracted around 60 million visitors in the year since it was launched.
What could come next
Virtual worlds could be the next step for fashion and luxury brands in the metaverse. So far, companies have been treading lightly, choosing less resource-intensive ways. There are significant challenges, however. While pioneers have shown the metaverse provides opportunities that echo or even improve those in the real world, their potential remains unclear. There is also the issue of what a metaverse venture means organizationally. The level of connectivity in the metaverse for certain users already shows how the virtual world could have a significant influence on consumer habits and trends in the physical world.
Consumer packaged goods
Consumer packaged goods (CPG) companies may face challenges in the metaverse. In virtual spaces, day-to-day consumer activities will be replaced by immersive experiences.
How companies currently use the metaverse
Metaverse offerings may present high-margin revenue streams for CPG companies. CPG companies typically operate under significant margin pressure. Digital assets and virtual experiences have so far been the most popular play. Hasbro's popular toy maker Nerf launched Nerf Hub in Roblox. Concerning virtual experiences, CPG brands are increasingly active. P&G Beauty entered the metaverse with a virtual storytelling world.
What could come next
Just as Web 2.0 and social media were successors to offline marketing, these early virtual initiatives are to some extent simply a new generation of promotional tools. It is not necessarily simple. As it has been noted, the metaverse vision is especially challenging for CPG brands. Big-name brands will enter the metaverse first to secure their position, with others following. CPG companies should carefully weigh potential first-mover advantages against the inherent uncertainty. The metaverse will be about adding a new sales channel to the omnichannel mix. It will succeed in the consumer sector if it blurs the line between "online" and "offline".
The metaverse brings together online social networks, gaming, cryptocurrencies, and increasingly diverse digital assets. Financial services companies have joined peers across industries in exploring the potential opportunity.
How companies currently use the metaverse
Financial services companies are using virtual reality for employee training. While these applications are mature, their impact on the fundamental business model has been modest. In the Web3-enabled metaverse, we are starting to see more creative models of engagement. HSBC has purchased virtual land in The Sandbox dedicated to engaging with e-sports enthusiasts. London-based fintech Sokin is building infrastructure for processing metaverse payments. -Marketing: Institutions may create digital branches in the metaverse to build their brand and credibility with users. Financial institutions are uniquely positioned to bridge the trust gap that has traditionally held back the wider adoption of digital IDs. -Emerging products and services: As cyber insurance for companies and similar services become more commonplace, insurers and cybersecurity companies are well positioned.
What could come next
As the metaverse potentially captures a larger share of day-to-day human interactions, digital versions of more sophisticated banking services could emerge. -embedded bank-like services for wallet owners in native metaverse venues. -back-end servicing for financial services, like virtual real-estate mortgage origination and warehousing -funds and investing services for metaverse projects. -customer engagement enhancements, like gamified credit education and unique loyalty experiences. Not entering the metaverse is also a strategic choice. Many companies may decide an early investment is an appealing strategic hedge.
Traditional retailers have in recent decades felt the squeeze of technological change. Strong competitive advantage is likely to now flow to retailers who understand how to use the metaverse.
How companies currently use the metaverse
The idea of virtual and digitally enhanced retail is not new. 25 percent of consumers have shopped in a virtual store today. VR/AR can be used to create 3-D, navigable, and branded spaces allowing customers to experience and buy virtual or physical goods. Appliance company Dyson launched a digital store accessible through a VR headset. The development of online, virtual worlds also allows retailers to expand their footprint. Instead of having stores in every city, a brand can build one in the metaverse.
What could come next
The metaverse presents an opportunity for retailers to reimagine and personalize the store environment for individuals and groups of customers. 129 metaverse malls are also being created, featuring storefronts where users can interact through their avatars. The key is not just bridging the gap between the physical and digital, but creating a consistent customer experience. Such multichannel formats and marketplaces will drive the vast majority of sales growth in Europe and the United States. Despite the substantial promise of the metaverse, retail executives also have significant challenges and questions they will have to tackle. Retailers will need to seek the right balance between their existing physical retail network and virtual-world offerings.
The metaverse presents a massive opportunity for technology companies, both existing and yet-to-be-born. Three areas in particular are emerging as control points. Metaverse environments need to deliver real-time 3-D experiences at scale to millions (or even billions) of individuals. These experiences will require computational efficiency to improve by two to three orders of magnitude. Building 3-D experiences requires a very different set of developer tools and platforms than the current developer stack on the web and mobile. This ranges from design tools (such as 3-D modeling, animation, and audio) to core engines and rendering. -Virtual worlds and content: Today, there are more than 100 virtual worlds. While a few major platforms will emerge, we expect continued fragmentation.
Four technology enablers
Four key technology enablers will also be required for the metaverse to reach its full potential. The first is devices across AR/VR, sensors, haptics, and peripherals. The second technology enabler is interoperability and open standards. Interoperability is a nuanced problem with user-facing components like identity and ownership. Web3 infrastructure potentially unlocks some of these. The final two major enablers are platforms to facilitate the metaverse economy, as well as tools for building a safe and secure metaverse. Security, identity, and privacy concerns in the metaverse are greatly magnified.
Potential broader implications
The best intentions can have unintended consequences. Stakeholders need to be mindful of the broader implications of their actions. "Much of what we've read about the metaverse from sci-fi has been pretty dystopic," Cathy Hackl says. "We don't want to escape reality but rather embrace and augment it". 'We don't want to escape reality but rather embrace and augment it with virtual content and experiences,' says Zuckerberg. -Cathy Hackl, chief metaverse officer and cofounder of Journey.
Maximizing the human experience
"The conversation needs to be about the kind of platforms we want to create, and what we can learn from the past 15 years of mobile platforms," says Marc Petit, VP of Epic Games' Unreal Engine Ecosystem. "They are going to be hugely important for the future," he says. Designers often define a set of principles to establish an agreed-upon approach and boundaries within which to ideate. We believe five design principles should guide initial iterations of the metaverse. 1. Build a people-first experience, always considering the needs of people. 2. Shift from social to societal, moving away from tools that simply allow communication. 3. Design responsibly, creating stellar experiences for people that ensure they're not disconnected from reality. 4. Make accessibility and inclusivity a feature. 5. Reduce the physical and mental friction by adapting decades of 2-D and 3-D user-experience design. Focusing on the human experience within the metaverse is a must, not an option. Brands, companies, and agencies have a responsibility to design positive experiences.
There are significant societal implications stemming from the development of the metaverse. Thinking of the metaverse through a societal lens imbues the user experience with a sense of belonging. Niantic's Hanke says people are recognizing the limitations of the internet. "The internet was an extremely decentralized concept from the beginning by design". Areas we believe may require guidelines include: -Data privacy, notably to ensure individuals retain control over their personal data. The metaverse promises new types of personal data (such as eye tracking, sensor data, and room mapping) tied to an identity that, with underdeveloped security capabilities, may endanger personal identity. -Security, not only concerning cybersecurity but also to payments. -Ethics and regulatory compliance to ensure the metaverse is a safe environment.- moderating content and addressing the use of online anonymity to commit crimes.
There are multiple possible uses of eye-tracking data collected by XR technologies. These include measures to mitigate the risks of addiction. -Sustainability, as the metaverse's computing infrastructure is resource intensive. . This applies to multiple elements, from state-of-the-art VR-which may create about 2,000 pounds of carbon emissions over five years to the massive amount of computing power (and energy) required to process blockchain transactions. The metaverse may bring extensive societal change. People could be working in a virtual world, playing games together, and owning virtual assets. We are already seeing allegations of disturbing behavior within metaverse worlds. "This is the right time to be thinking," LEGO Ventures' Rob Lowe says.
Developing a business strategy for capturing value
It is always an option to simply not participate in the metaverse. In our view, that may result in a significant competitive disadvantage.
Moving at speed: How do you capture value, and what can you do today?
-Develop a value-focused strategic stance in two steps. 1. Define your metaverse goals, such as whether you want to generate demand across existing and new segments, build communities, and create. 2. Determine the role you want to play, from building experiences to facilitating interactions. -Test, learn, and adopt in three steps: 1. Launch initial activities and use cases, exploring opportunities such as NFTs, immersive experiences, native advertising, and having a metaverse. 2. Monitor near-term results to refine long-term potential. Identify the right metrics for initial activations and testing long-. 3. Learn more about users, examining behavior on different platforms. -Prepare to scale in two steps: 1. Identify and start scaling capabilities by sourcing the talent required and establishing the necessary technology infrastructure. 2. Embed the metaverse in your business strategy and operating model.
Actions for executives to consider
The metaverse is likely to impact not only how businesses interact with customers, but how companies operate. Human resources will have new ways to undertake learning and development. Make an effort to explore Roblox, Fortnite, Minecraft, or a similar gaming experience. Explore The Sandbox or Decentraland-and connect a MetaMask wallet. "What I've seen over the past year is that a lot of companies and brands have begun to dip their toes in the metaverse," says Cathy Hackl, chief metaverse officer and cofounder of Journey. "They're really wondering what this means for their company," she says.
Actions for policymakers to consider
The challenges of regulating technology today will also exist in the metaverse. Policymakers will benefit from planning and defining the legal, policy, and governance. Public-sector entities also have an opportunity to reimagine public services and infrastructure in the metaverse. One key challenge will be enhancing the talent base in the public sector. Early examples are already emerging of city governments outlining their metaverse strategies. National and local governments will need to define for themselves the right time to act. Policymakers may find it difficult to develop detailed regulatory frameworks for governing the metaverse while it remains so fluid. Within a decade, the metaverse has the potential to drive a very different world. By 2030, more than 50 percent of live events could be held in the metaverse. More than 80 percent of commerce could be impacted by something consumers do there. Such generational changes rarely happen overnight. They tend to take years and are the result of an accumulation of incremental advances. Because they ultimately result in fundamental changes to our lives, they may also present risks. Stakeholders have an opportunity to shape the metaverse in a way that fosters greater social cohesion, reduces inequality, widens access to education, and acts as a catalyst for social mobility. The metaverse should not be a substitute for the real world or the in-person connections that bind us. The metaverse has the potential to generate up to $5 trillion in value by 2030.
Investment flows into metaverse technology were divided into two major categories: external investments by funds and corporations, and internal corporate investments. The internal investment category includes expenditure on all corporate activities both for developing metaverse-based products, services, or experiences. To forecast the potential value that may be created by metaverse technology by 2030, a bottom-up assessment of the most relevant consumer and enterprise use cases was conducted across a set of industries and sectors. In that calculation, the potential value of the metaverse results from expected market sizes and key assumptions about industry-specific metaverse market penetration. 1. A global metaverse consumer survey (n = 3104) from countries across North America, Europe, and Asia. 2. A survey of C-level executives from 448 companies spanning geographies and company sizes.
Internal and external industry and technology expert interviews
For each future scenario of consumer and enterprise use cases, the impact analysis draws a conservative base case and an optimistic upside potential. The potential enterprise value from the metaverse is estimated by modeling the average annual enterprise technology spend per sector. The derived enterprise value calculation considers 19 industry sectors. The potential consumer value potential is split between existing and net new and emerging metaverse use cases. Calculations are considered the most important consumer uses cases across ten sectors. The potential value of the metaverse is a bottom-up estimate based on assumptions about future market conditions and developments. We conducted two global surveys designed to understand trends in metaverse adoption, use, and business implications. The consumer survey was conducted in May 2022. The final survey sample consisted of 3,104 end consumers. In addition to basic information about respondents and their households, the survey consisted of four groups of questions. The first asked respondents about their awareness, excitement, and adoption of activities using metaverse technologies. -The second asked about the current and future user behavior of metaverse-related technology. -The third investigated the usage of avatars. - The fourth addressed respondents' satisfaction with metaverse experiences. The senior executive survey was conducted in May 2022. The final survey, after quality checks, consisted of C-level executives from 448 companies. The survey consisted of four groups of questions. The first asked respondents about their awareness and adoption rates of metaverse technologies. The first asked about the current and future impact of the metaverse in the respondent's sector. -The third investigated the financial impact of the metaverse. -The fourth addressed the organizational impact of metaverse technologies, specifically on levels of employment. 13 senior executives and metaverse experts share their insights into the metaverse.
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