Businesses must be in no doubt that the Metaverse is for real

Unless you are a gaming aficionado, the virtual world may seem of little relevance to your daily life, but that could be about to change. Since Facebook became Meta in October 2021, attentions have been turning to the development of the Metaverse, a virtual reality world that could become a $13 trillion economy by 2030, with huge implications for businesses.

What started out as an interactive VR space populated with online gamers is morphing into a future version of the web where virtual universes meet social networks, collaborative spaces, and e-marketplaces. The Metaverse is expected to be worth $800 billion within two years and operating inside it could become nothing short of mandatory over the coming decade, with as much as 25 per cent of the economy potentially residing in the virtual realm.

Whatever the sector, the Metaverse brings with it clear opportunities in an age where purchase and business decisions are increasingly occurring in the digital world. The available data suggests that Gen Z spends more time as digital personas than as their physical selves, and as the metaverse continues to grow, consumers may soon refuse to buy products that are not present or tested within it.

Against this emerging backdrop, prime among the opportunities is the chance for companies to build direct and immersive relationships with their consumers, test products in the virtual world, and even produce items designed by customers themselves. What’s more, there are financial savings to be had . In short, by eliminating the middleman and reducing waste (unsold products), the metaverse will enable businesses to generate more value, stimulate better quality creations, and cut costs.

Not about big vs small

Smaller companies will find themselves on an equal footing with corporate heavyweights. In the virtual sphere, they will be able to reach out directly to consumers and compete on the global stage. Meanwhile, healthcare providers will be able to deliver services to disadvantaged and remote communities – and at lower cost – democratizing access and care for citizens world-wide.

There is a security advantage too. Transactions in the Metaverse will be 100 per cent traceable, thanks to blockchain technology and the use of non-fungible tokens (NFTs), increasing both consumer and business confidence in transacting in the digital space.

Those without a presence will miss out on sizeable business opportunities and may be eliminated altogether as competitors steal their share in the digital marketplace. It is a scenario reminiscent of the risk run by businesses today that fail to engage with the internet.

Fortunately, forward-thinking governments are laying the groundwork for the virtual economy to thrive. Among the examples, Dubai has developed a strategy that could see the Metaverse contribute $4 billion to its economy by 2030. Already, the government has put regulations in place and transactions are underway across the emirate. In the foreseeable future, it may become mandatory to sign legally binding real estate contracts in the Metaverse.

A job creator?

With the ecosystem beginning to take shape, research points to a healthy future for the Metaverse, with annual growth estimated to reach 44 per cent by 2028 and more than 10,000 related jobs expected to be created over the next five years. However, realizing the wealth of potential won’t be without challenge.

As a priority, weaknesses in network infrastructure and reliability must be overcome, and the current lack of regulations relating to the Metaverse will need to be addressed in order to defend intellectual property and protect against criminal activity. Enabling interoperability and agreeing standards between the various parties in the Metaverse will also be difficult to achieve, while competition for talent will be stiff.

Adding to the list of obstacles, established physical brands will need to learn how to operate in the virtual world and counter the threat from digital native competitors. Meanwhile, consumer behavior will be hard to predict. There have been examples of consumers paying a premium for virtual products based on artificial scarcity, but once the Metaverse is more established, will such behaviors continue?

Many questions remain unanswered and exactly how the Metaverse evolves is yet to be seen, but two things are for sure: the implications for businesses will be profound and early adopters will reap the greatest rewards. Of course, seizing the opportunities won’t be without challenge or even a measure of risk, but with a $13 trillion economy in the making, passing them up could be the greatest danger of all.

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