The metaverse—an often-hyped yet vague, futuristic landscape–promises to change how we work, shop, bank, and otherwise engage, and businesses investing early are hoping for huge gains. How will this new digital space impact global sectors and businesses, and is there basis for optimism? A newly published McKinsey report digs into the value of the metaverse for businesses and finds the metaverse may well be too big to ignore.
The Promise of the Metaverse
The future will look very different from now, if you plan to bank on the metaverse. The metaverse is posited as not an app or a device, but an actual world in which our day-to-day lives will be lived in tandem with our virtual reality lives. And the future is coming—and changing—fast. Bill Gates tells us that “acceleration of innovation is just starting” in a blog post, but skeptics have equally questioned how seriously we need to take this. So, is it game changing, or sci-fi fodder? McKinsey research supports the former.
“There continue to be questions around the longevity and potential of the metaverse, with an extreme view regarding it as merely a rebranded gaming platform of little wider interest. We do not share that skepticism and believe the metaverse has the potential to be the next iteration of the internet,” the report reads.
The report, based on two global surveys which reached more than 3,400 consumers and executives about the metaverse, predicts the metaverse will have a major value escalation, with e-commerce as the largest value growth force ($2.6 trillion), as well as virtual learning ($270 billion), advertising ($206 billion), and gaming ($125 billion).
The Value of the Metaverse: Preference for Virtual
The anticipated impact of the metaverse seems largely to do with how individuals now prefer to engage in everyday activities such as shopping, fitness, and entertainment. In part driven by pandemic necessity, e-commerce, distance learning, and remote working have normalized digital life for millions of people.
Data supports this: In the report, 64% of consumers surveyed indicated they were excited or very excited about shopping in the metaverse. Of the 59% of respondents who indicated they already preferred one or more activities virtually versus physically, 79% said they preferred immersive world shopping.
Metaverse and the Impact on Business
In the business world, consumer preference and behavior drive success, changes business models, and impact how businesses interact with the customers they want to attract. With the looming metaverse, this means businesses need to rethink approaches to customer interaction but will also mean additional training and reskilling to acquire the new knowledge necessary to succeed in the metaverse.
“The metaverse represents a strategic inflection point for companies, and it presents a significant opportunity to influence the way we live, connect, learn, innovate, and collaborate,” according to Eric Hazan, senior partner, McKinsey & Company. “Our ambition is to help leaders of both consumer and B2B companies better understand its power and potential, identify strategic imperatives, and act as a force for its evolution.”
Capturing value in the Metaverse
There are potentially huge gains and opportunities for businesses across industries if the power of the metaverse can be harnessed the right way. According to the report, 99 percent of business leaders anticipate the metaverse to bring positive gains to their industries over the next five to ten years, but it will not all be business as usual: 31 percent of those surveyed predict the metaverse will fundamentally change the way their industry operates, and a quarter of leaders believe the metaverse will account for more than 15 percent of their organization’s total margin growth over the next five years.
Investing in the Future of the Metaverse
Skeptics point to the recent nosedive in cryptocurrency markets as an indication that metaverse visionaries are wrong, but investors appear to feel differently. According to McKinsey research, between January and June of this year, more than $120 billion has already been invested into metaverse-related technology and infrastructure, which is twice was invested the previous year.
Despite the enthusiasm of investors and business visionaries, there are questions about safety and security should the metaverse become a core part of our reality. Where all this will lead is uncertain, and what it all means is still puzzling to many. A Wunderman Thompson Intelligence report found that only 15% of surveyed respondents felt they could explain the metaverse.
The McKinsey report indicates that the metaverse is not a fad: It’s a new way of thinking and operating and will represent a cultural and business shift. But, according to Eric Hazan, one of the report’s lead authors, what the metaverse ultimately delivers will depend on what we do with the technology available to us.
“At its most basic, the metaverse consists of a sense of immersion, real-time interactivity, and user agency,” the report reads. “Consumers and companies are experimenting with the early metaverse for everything from socializing to fitness, commerce, virtual learning, and other daily activities. Like any technology, the metaverse is neither inherently good nor bad. It will be what we make it, and we can learn from previous eras of dramatic technological change.”