In its new report, McKinsey indicated that metaverse could be working USD 5trillion by 2030.
Spending in Metaverse to Hit USD 5 Billion, Consumer Behaviour to Fall into Five Activities
Global spending on Metaverse is likely to reach USD5 trillion by 2020, according to the international consulting firm McKinsey & Company.
In the 77-page report titled “Value Creation in the Metaverse” released on 15th June, 2022, McKinsey evaluated the current adoption trends and also drew insights from two recent surveys. One of the surveys polled 3,104 consumers in 11 countries, while the other reached out to 448 companies in 15 industries in 10 countries.
McKinsey used the data from these surveys to predict the expected customer behaviour in the metaverse. The report concluded that the behaviour would be divided into five main activities, including:
- Remote learning
According to the report, 60% of consumers indicated they prefer at least one activity in the metaverse compared to its physical alternative. 79% of people active in metaverse have already completed a purchase.
The primary cash cow in the metaverse will be e-commerce, which McKinsey predicts will make up about USD2-2.6 trillion of the total spending by 2030. Another sector will be advertising which is expected to account for USD144-206 billion.
The crypto market will also account for a huge chunk of revenue in the metaverse. The report highlights that the conventional crypto market accounted for over USD120 billion in investments in the first five months of 2022. The bulk of this went into metaverse-related infrastructure and technology. The investment in 2022 so far is more than double the amount injected into the metaverse tech throughout 2021.
Some Executives Still Sceptical Despite the Expected Growth
The lead authors of the report, Eric Hazan and Lareina Yee said what is more exciting about metaverse is that it is the next platform that allows people to work, live, connect and collaborate.
However, Yee was quick to indicate that “executives often don’t agree on most things, but our research shows they overwhelmingly agree on one thing: 95% of them believe the metaverse will have a positive impact on their industry.”
According to the report, 25% of the executives indicated that they anticipate the metaverse to drive 15% of the entire margin growth over the next five years. 1/3 of them are of the view that it will result in significant changes in how their industries operate.
However, 31% of the executives were unsure of the return on investments to expect from experiences on metaverse. Although it is okay to be excited about the expected opportunities, Hazan said it is also crucial to be ready for challenges ahead. This calls for proper planning.
“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,” said Hazan.
Yee concluded by re-emphasizing that Metaverse is still nascent and evolving. Therefore, she called on individual creators and brands to embrace long-term planning to be successful.