Consulting firm McKinsey & Company has urged companies and governments not to miss the opportunities that the metaverse is bringing, while the market is expected to generate up to $5 trillion for the economy by the end of the decade.
Almost 8 months after Facebook became Meta and its founder, Mark Zuckerberg, announced his ambitions for the “metaverse”, the hype is not letting up.
Although difficult to define, the metaverse is set to become the next stage of the internet, where the user is fully immersed in the online environment thanks to virtual reality, rather than just browsing on a two-dimensional screen.
How the metaverse will actually develop remains to be seen, but it could very well be revolutionary, and tech companies always looking for ‘the next big thing’ have certainly got the message. Soon consumers could be testing a luxury car in the metaverse before buying it, or do their shopping and try on new clothes in a virtual, immersive store.
The metaverse could be worth a lot – up to $5 trillion by 2030, according to a study presented by the American consulting firm McKinsey & Company at the annual event VivaTech being held this week in Paris.
“The metaverse is simply too big to be ignored”, the authors wrote, stressing that it is “entirely plausible” that half of the live events will be held in the metaverse and that the average user will spend “up to six hours a day” exploring these experiences by 2030.
The e-commerce industry is likely to be the first to benefit from this growth, with an estimated market impact of between $2 trillion and $2.6 trillion by 2030, followed by the academic virtual learning market ($180 billion to $270 billion), advertising ($144 billion to $206 billion) and gaming ($108 billion to $125 billion).
The commercial opportunities are tremendous. McKinsey’s report showed that around 79% of consumers active in the metaverse already have made a purchase, mostly to improve their experience online.
Businesses, venture capital and private equity have already invested $120 billion in the metaverse in the first five months of 2022, as opposed to the $57 billion invested in the whole year of 2021, the report adds, stressing that “large technology companies are the biggest investors and to a much greater extent than they were for artificial intelligence (AI) at a similar stage in its evolution”.
Like all technological revolutions, companies that showed early interest may be eventually able to rely on lasting competitive advantages.
The rise of the metaverse, however, will likely be fraught with plenty of challenges and thorny questions due to its capacity to magnify pre-existing online issues such as cyberbullying, scamming or hate speech.
As noted by Microsoft’s executive vice-president Charlie Bell in a recent blog post, “the problems of yesterday’s and today’s Internet — impersonation, attempts to steal credentials, social engineering, nation-state espionage, inevitable vulnerabilities — will be with us in the metaverse.”
Competition policies and antitrust rules will also likely require some upgrading.
“Policymakers will benefit from planning ahead and defining the legal, policy, and governance of the metaverse and its broad implications in these discussions”, McKinsey’s report wrote.
The European executive has reportedly started looking into this. “The metaverse is here already. So of course we start analysing what will be the role for a regulator, what is the role for our legislature”, the Commission’s vice-president Margrethe Vestager told an online event in February.
“Everything we do must be fact-based and based on the information that we can get… We need to understand it before we can decide what actions would be appropriate”, she added.
[Edited by Luca Bertuzzi/Nathalie Weatherald]