Metaverse could be worth US$5 trillion by 2030: McKinsey report
A new report titled ‘Value Creation in the Metaverse’ from global consulting firm McKinsey predicts that the Metaverse industry could reach US$ 5 trillion by 2030.
The report covers findings and data aggregated from over 3,400 participants in four areas: China, the USA, Europe, and the Asia-Pacific region. McKinsey researchers believe over 50 percent of this $5 trillion figure will pour into e-commerce, around US$2.6 trillion, ahead of spending in sectors like virtual learning (US$ 270 billion), advertising (US$ 206 billion), and Web3 gaming (US$ 125 billion).
In addition to speaking with consumers, McKinsey asked business leaders and VC firms including Square Enix, Niantic, and Epic Games on the adoption of the metaverse, its potential, and its impact on human behavior.
The majority of people McKinsey & Co. spoke with had a favorable view of Metaverse applications with 31% of all executives still remaining uncertain about the return on investment of Metaverse experiences. On the other hand, 95 percent of executives believed the metaverse would boost their businesses in the next 5 to 10 years; over 30 percent of companies said the Metaverse would bring significant changes to their operations, while around 25 percent expect the Metaverse’s margin growth to increase by at least 15 percent.
What’s fueling the Metaverse investment and adoption
According to the report, from January 2022 - May 2022, more than US$120 billion has already been invested into Metaverse-related technology and infrastructure, a figure more than double the total $57 billion invested in Metaverse tech throughout 2021.
Factors driving the investment include:
ongoing technological advances across the infrastructure required to power the metaverse
increasingly consumer-led brand marketing and engagement
increasing marketplace readiness as users explore today’s version of the metaverse, which is largely driven by gaming while applications emerge in socializing, fitness, commerce, virtual learning, and other uses
Currently, more than three billion gamers worldwide have access to different versions of the Metaverse.
Lead authors of the report Lareina Yee and Eric Hazan cautioned that while there are exciting prospects associated with the Metaverse, they should also be prepared to face challenges and prepare for them ahead of time. Hazan said ‘There are urgent challenges that need to be considered. For one, 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.’
‘While the idea of connecting virtually has been decades in the making, it is now increasingly real, meaning real people are using it and spending real money and companies are betting big,’ said Yee. ‘Yet this booming interest has made it difficult to separate hype from reality. It’s worth remembering that while the bust of the first dot-com boom resulted in the disappearance of scores of companies, the internet itself went from strength to strength, giving rise to new entrants.’
Photo: McKinsey & Co.