Metaverse Market to Hit $5 Billion by 2030, Says McKinsey

According to the latest McKinsey & Company report, the metaverse, which is considered the future of business and human interaction, is expected to reach $5 trillion by 2030.

E-commerce, which has grown significantly due to the coronavirus pandemic over the past two years, is poised to account for more than half of the $2.6 billion metaverse market, the consultancy said. in Creation of value in the metaverse. It will be followed by virtual learning ($270 billion), advertising ($206 billion) and games ($125 billion).

The metaverse is a digital space that allows users to communicate and move about virtually in their three-dimensional avatars or digital representations. It is part of Web3, which is promoted as the next iteration of the World Wide Web, with blockchain, decentralization, openness, and greater user convenience among its core components.

“The metaverse represents a strategic inflection point for businesses…it presents a significant opportunity to influence the way we live, connect, learn, innovate and collaborate,” said Eric Hazan, senior partner at McKinsey.

Investor enthusiasm is at its peak, according to the report. So far in 2022, corporations, venture capital and private equity firms have invested over $120 billion in the metaverse, 110% more than last year.

Members of the public can also meet and interact with the Ajman Police in the metaverse, where avatars of officers will answer people's questions.  Photo: Ajman Police

Several factors are fueling investment growth, including advances in technology, demographic tailwinds, consumer-led marketing and brand engagement, and improved market readiness, McKinsey said.

The consultancy surveyed more than 3,400 consumers and senior executives in Asia Pacific, China, Europe and the United States. It also analyzed five industries – apparel, fashion and luxury; consumer packaged goods; financial services; detail; and telecommunications, media and technology.

The current version of the metaverse is largely driven by the gaming industry, while new applications are emerging in socializing, fitness, commerce, virtual learning and other uses, according to the report. Currently, more than three billion players worldwide have access to different versions of the metaverse.

“While the idea of ​​connecting virtually took decades, it is now increasingly real, meaning real people are using it and spending real money and businesses are betting big,” said said Lareina Yee, senior partner at McKinsey.

McKinsey research found that nearly six in 10 consumers (59%) prefer at least one metaverse experience to its physical alternative.

Some of these include shopping – buying physical or virtual goods (79%), attending virtual social events or playing social games (78%) and exercising using virtual reality (76% ).

Business leaders also recognize the potential of the metaverse to drive margin growth. Nearly 95% of executives admitted they expect technology to have a positive impact on their industry in five to 10 years, while 31% said it will change the way their industry operates .

Nearly a quarter expect the Metaverse to drive more than 15% of their organization’s total margin growth over the next five years.

“The metaverse has placed us on the cusp of the next wave of digital disruption. It’s transformative… it’s likely to have a major impact on our business and personal lives,” said Tarek Elmasry, senior partner at McKinsey.

In the Middle East, the United Arab Emirates is leading the metaverse movement.

Dubai‘s metaverse strategy aims to increase the metaverse sector’s contribution to Dubai’s economy to $4 billion by 2030 and increase its contribution to the emirate’s economy to 1%, according to data official.

In May, Dubai’s Virtual Assets Regulatory Authority entered the metaverse with the establishment of its headquarters, making it the first regulator to have a presence in the emerging digital space.

Last month, the United Arab Emirates hosted the first metaverse wedding. Technology allows couples to choose a venue, a personalized cake and a wedding dress.

Members of the public can also meet and interact with the Ajman Police in the metaverse, where avatars of officers will respond to people’s requests. Seven officers from Al Nuaimaiah Police Station have been trained in Metaverse technology.

Updated: June 16, 2022, 5:30 a.m.

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