Metaverse could generate up to $5t by 2030: McKinsey
Adoption by the e-commerce industry will be the largest driver.
The metaverse could potentially generate an economic value of between $4t to $5t by 2030 as it is expected to be highly adopted across business sectors and consumers, McKinsey and Company estimated.
In its report, McKinsey said the potential economic value of the metaverse will be driven by several factors such as its appeal to genders, geographies and generations, consumer spending on digital assets and openness to adopting new technologies.
Companies' heavy investments in the development of metaverse infrastructure, and brands experimenting on metaverse that received positive consumer feedback would also contribute to the rise of its economic value.
“While estimates of the potential economic value of the metaverse vary widely, our bottom-up view of consumer and enterprise use cases suggests it may generate up to $5 trillion in impact by 2030— equivalent to the size of the world’s third-largest economy today, Japan,” McKinsey said.
“It is shaping up to be the biggest new growth opportunity for several industries in the coming decade, given its potential to enable new business models, products, and services, and act as an engagement channel for both business-to-consumer and business-to-business purposes,” it added.
Whilst efforts to implement metaverse are present in various industries, most initiatives to date were around marketing, learning and development for employers, virtual meetings, events or conferences, and product design or digital twinning.
However, McKinsey said e-commerce is expected to have the largest driver of the economic impact of the metaverse.
The industry is estimated to have a market impact of $2t to $2.6t by 2030, “depending on whether a base or upside case for the metaverse’s development is realised.”
This contribution dwarfs other sectors such as academic virtual learning which is estimated between $180b to $270b, advertising between $144b to $206b, and gaming between $108b to $125b.
Reaching full potential
Metaverse needs four technology enablers that will help to reach its full potential. Devices across augmented and virtual reality, haptics, and peripherals will drive the adoption of the metaverse. But more significant progress is needed across quality and usability factors such as weight and battery life and computing power.
McKinsey said interoperability and open standards were also key to enabling metaverse. Interoperability is a “nuanced problem with user-facing components” such as identity and ownership. It also includes elements like cross-platform development, file formats, 3D environments’ behaviour and physics, distribution, and monetisation.
There is also a need for a new set of access and discovery tools, and platforms that will facilitate payments and monetisation, and advertising.
A secure metaverse is also needed, as privacy concerns in metaverse are “greatly magnified” due to the rise in the level and complexity of data collected and increase risks of impersonation, harassment, and the possible need for content moderation in 3D environments.
“Stakeholders need to be mindful of the broader implications of their actions and, at a minimum, learn from past generations of online community and platform builders to define a roadmap toward an ethical, safe, and inclusive metaverse experience. The intent should not be to build another social web, but a societal-scale construct that puts people first,” McKinsey said.