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The Metaverse: Macroeconomic Trends

Gaming and social media companies are at the forefront of metaverse development, but corporations will lead the charge over the next three years. This shift will be driven by the future of work and ongoing digital transformation initiatives in sectors ranging from retail to healthcare and financial services. Big Tech champions the Metaverse, with Microsoft and Meta promoting it as the ideal environment to support hybrid working.

Below are the top macro trends impacting the Metaverse theme, as identified by GlobalData.

The Metaverse is still largely conceptual, but the growing volumes of investment in it stem from the belief that it is the future of the internet. Bold claims from companies such as Meta, Microsoft and Epic Games have inflated market expectations. In addition, Web3 enthusiasts have taken the opportunity to initiate a so-called revolution against Big Tech by promising users ownership of their data and content.

While some technologies enabling the metaverse, such as artificial intelligence (AI), have matured considerably over the years, others are still in development. That said, the push to create the metaverse will boost the maturity of these technologies.

Consumer adoption

Consumer awareness of the Metaverse is currently low, and many perceive it as pure marketing hype. Marketing automation platform Klaviyo surveyed over 1,000 Americans in February 2022 and found that 49% didn’t know what Metaverse was. Among respondents who had heard of the Metaverse, most were skeptical of its development, with 78% calling it hype. The study also pointed out that 45% of 18-24 year olds have no idea about non-fungible tokens (NFTs), and even those who do aren’t very interested.

Another survey conducted in 2022 by Accenture with more than 11,000 consumers in 16 countries found that 64% of respondents had already purchased a virtual good or participated in a virtual experience in 2021. The survey also revealed that 42% of respondents had visited a retailer in the virtual world for advice, to make a payment or to browse a product when purchasing a physical item, while 56% plan to do so in 2022.

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Ads will be a key revenue stream for consumer-focused metaverses. Brands in sectors such as clothing and restaurants have already tried to seize this opportunity. Some brands have partnered with platforms like Fortnite and Roblox to expand their advertising opportunities, while others are buying virtual land in The Sandbox and Decentraland. As a result, advertising agencies such as Publicis.Poke, S4 Capital, and Vayner Media are creating departments to understand the metaverse and help brands identify future opportunities.

Company adoption

Enterprises will become the primary market for metaverse developers over the next three years. New use cases will emerge as Nvidia, Microsoft, and Meta build their metaverse capabilities, and startups develop solutions around data visualization, collaboration, and education. Companies from different industries are focusing on Augmented Reality (AR) and Virtual Reality (VR) or 3D visualization which will fuel the evolution of enterprise metaverse platforms.

IT service providers Infosys and Tech Mahindra have launched metaverse platforms to help clients explore theme opportunities and support their digital transformation initiatives. As large enterprises legitimize the metaverse, the development of use cases will allow more small and medium enterprises to enter the theme in the future.

The future of work

GlobalData’s thematic framework for the future of work includes five main categories: visualization, connectivity, automation, collaboration and interpretation. Technologies for the future of work such as augmented reality, virtual reality, digital twins, wearable technology, AI, 5G and collaboration tools are driving the development of the metaverse.

Big tech companies like Microsoft, Nvidia, and Meta, and startups like Varjo, Virbela, and Spatial, see the Metaverse as the next step in workplace collaboration. While most enterprise metaverse platforms focus on collaboration, some use digital twins to replicate physical locations. In terms of adoption, large companies from various industries such as technology, banking, advertising, and professional services are entering the metaverse with a focus on the future of work. However, many large companies are taking a wait-and-see approach.

Startups like PixelMax and NextMeet are developing virtual workplaces in the metaverse. They allow users to meet the avatars of their colleagues in virtual offices for activities of socialization, collaboration and playful learning while working from home. Several start-ups are also creating technology for businesses that can be used in the metaverse.

Metaverse Security

Security is a primary concern in the Metaverse. One of the main problems to be solved is that of sexual assault, which is rampant on existing virtual platforms. Sexual harassment in Meta’s Horizon Venues has been reported during trials in 2021. Another challenge involves children; it will be difficult for parents to ensure that their children stay in age-appropriate metaverses. The platform developers basically have to incorporate settings like safe search, profanity filters, and parental monitoring of children’s activities.

The underlying technologies associated with the metaverse, such as social media platforms, are already seen as largely detrimental to many. Unfortunately, the problems attributed to these platforms will likely be extended or even exacerbated in the metaverse. Not only will it follow a similar ad-based model, but it will be more immersive, even more integrated into most aspects of users’ lives, and harder to regulate.

Meta is already working on moderating toxic behavior in its metaverses. It added a security feature, dubbed Personal Boundary, to two VR apps (Horizon Worlds and Horizon Venues). The Personal Boundary feature allows avatars to add a bubble around them with a two-foot radius, which prevents users from coming into close contact. But there’s still a lot of work to do, given that metaverses aren’t mainstream yet. Metaverse developers should consider moderation behavior as a fundamental aspect.

This is an edited excerpt from Metaverse – Thematic research report produced by GlobalData Thematic Research.


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