Thursday, 14 July 2022

The Metaverse Will Make $5 Trillion By 2030. That Sounds Awesome and… Wait, What Are We Talking About?

NAB

Within a decade, it is entirely plausible that more than half of live events could be held in the metaverse. What’s more, a massive 80% of commerce could be impacted by something consumers do virtually. And by 2030, most learning and development could happen in a metaverse environment, as could most virtual or hybrid collaboration. All of which could generate $5 trillion into the global economy within the next eight years.

article here

All this is according to McKinsey & Company, which has compiled an exhaustive status report, “Value creation in the metaverse,” on the birth of the next-gen internet.

“We expect the economic value of the metaverse to rise exponentially. Its appeal spans genders, geographies, sectors, and generations,” says Eric Hazan, one of the report’s authors. “Consumers are open to adopting new technologies; companies are investing heavily in the development of metaverse infrastructure; and brands experimenting in the metaverse are getting positive feedback from consumers.”

It expects us to spend up to six hours a day on average in metaverse experiences by 2030 as more of what we all do moves online.

Of all the potential drivers of the economic impact of the metaverse, e-commerce is the largest. McKinsey estimates it may have a market impact of $2 trillion to $2.6 trillion by 2030, a contribution which dwarfs sectors such as academic virtual learning (an estimated $180 billion to $270 billion impact by 2030), advertising ($144 billion to $206 billion) and gaming ($108 billion to $125 billion).

“There’s an opportunity to reimagine public services and infrastructure in the metaverse,” Hazan says. “This opens new avenues to providing public services like education and healthcare, creating employment, and planning community spaces. One big challenge will be making sure the public sector talent base is well equipped to shape priorities for the greatest social good and to work with technology providers to make that happen.”

Almost 60% of consumers McKinsey surveyed for this report say they are excited about the transition of everyday activities to the metaverse, with connectivity being the number one driver of excitement. The kind of connectivity they are talking about mostly means socializing and communicating with family and friends.

McKinsey points out that connectivity also encompasses a broad range of activities offering commercial growth opportunities, such as entertainment (66% of consumers responded they were “excited” or “very excited” about attending live events such as concerts and sports, as well as seeing movies and attending festivals and museums online) and gaming (66%).

Oddly, travel is another activity that 62% of respondents were “excited” or “very excited” about (62%). As McKinsey observes, the main themes in metaverse-specific travel relate to the possibility of going beyond the limits of the physical world: time travel, fantastical places, exotic places that are difficult to access, and space travel.

This suggests to me that respondents have no real idea what the metaverse is. Moreover, being excited about connectivity is something they can do online now — through video calls or social media. I’m not sure why anyone would be exciting about visiting a sports event in the metaverse if they actually knew what that entailed (stuck in a VR headset, miles from the action).

However, the report is most concerned with the major impact the metaverse will have on our commercial and personal lives. It advises businesses, policymakers, and citizens to explore and understand as much as they can about this phenomenon, the technology that will underpin it, and the ramifications it will have for economies and the wider society.

Ninety-five percent of company executives also believe the metaverse will have a positive impact on their industry, per the report. About a third of them think the metaverse can bring significant change in how their industry operates, and a quarter of them believe it will generate more than 15% of corporate revenue in the next five years.

With such potentially great reward comes great responsibility.

“Organizations should take care to develop products responsibly, taking the opportunity to embed and engender digital trust while the metaverse is still in its formative stage,” says Lareina Yee, senior partner at McKinsey.

In the report, LEGO Ventures’ MD Rob Lowe puts it like this: “This is the right time to be thinking, okay, in real life, you have playgrounds and schools. And very clearly, they’re fun, playful spaces. But, equally, in the same way that you wouldn’t have a child walking alone after midnight in the middle of Soho, you wouldn’t want the same thing to happen in the metaverse.

“So, how can we build that in a way that allows kids to have these creative, social experiences that they deserve and want to have, but build it in a way from the ground up so we’re not trying to layer over it and fix it in the future?”

Hazan urges business leaders to think about how “digital trust” in the metaverse can be defined.

“There are urgent challenges that need to be considered,” he says. “There’s going to be a need to reskill part of the workforce to take advantage of, rather than compete with, the metaverse. Stakeholders will need to build a roadmap to make sure the metaverse experience is ethical, safe, and inclusive. This means creating guidelines around issues like data privacy, security, ethics, physical safety, sustainability, and equity.”

In McKinsey’s view, the metaverse should not be a substitute for the real world or the in-person connections that bind us. It should complement what people do and, like virtual and in-person offices, allow free movement between the virtual and physical worlds in a way that expands our range of experiences rather than limiting them.

But ensuring that happens requires collective leadership to ensure the actions taken responsibly shape the evolution of this revolution.

In the end, with its potential to generate up to $5 trillion in value by 2030, the metaverse is simply too big to be ignored.

 


No comments:

Post a Comment