The metaverse has become “too big to ignore” – yet its future is far from certain, according to a special report from McKinsey.
Is investing in the metaverse a big opportunity or a big risk? It’s both – and business leaders and technologists need to sort through all the noise, hype, and sprawl to determine what works best for their organizations. Here at RTInsights, we have examined digital twins as the core for serious, industrial-scale metaverses. But the metaverse spans well beyond digital twins, into artificial intelligence, immersive reality, advanced connectivity, and Web3.
The metaverse has become “too big to ignore – yet its future is far from certain,” according to special report out of McKinsey. “Companies need to dip a toe in the water and plan to take the plunge should developments warrant,” according to the report’s co-authors, led by Homayoun Hatami.
There’s definitely gold in the metaverse hills. McKinsey estimates that the metaverse could generate $4 trillion to $5 trillion in value by 2030. That’s trillion with a “t.” With numbers like this, Hatami and his co-authors urge business leaders to step up and embrace the possibilities the metaverse offers. “The metaverse touches on many parts of the enterprise,” they observe. “The CEO is the natural integrator who can marshal the company’s resources to put together a coherent, value-driven response. And with the CEO’s support, there’s less chance that the metaverse effort gets stuck in ‘pilot purgatory.’”
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Digital twins, cited above, are one side of the metaverse – the industrial zone. The other side is on the consumer-facing side. “Many companies have already added the metaverse to their omnichannel marketing mix, staking out a presence in virtual worlds like Roblox, Fortnite, and the Sandbox,” Hatami. and his co-authors state. “Some are already finding success. Nike has hosted more than 26 million visitors at Nikeland, its space in Roblox, and it has sold over $185 million of NFTs for digital sneakers and suchlike products. And its digital division has tripled revenues to exceed $10 billion, almost a quarter of the company’s total.”
At the same time, the McKinsey analysts caution, the metaverse still has a long way to go until it flourishes – and business leaders need to understand that it’s a long journey. “The development of the metaverse is a few years away from a true tipping point,” they state. “It could easily take longer – though that’s no reason not to prepare.” The technology itself is not ready: “advances in 5G networks, edge computing, hardware, and software must come online – they’re in progress. At the moment, audiences are primarily gamers and the technically savvy; others must be recruited. There is no connection among all the various partial metaverses (Roblox, the Sandbox, and many others). The integrated or true metaverse is a long way off.”
At this stage, the most important start to a metaverse journey is making the business case. “The key question is less what can we do in the metaverse?’ and more ‘why does the metaverse fit into our growth and innovation agenda?'” Hatami and his team advise. Business leaders “should consider identifying and prioritizing practical use cases that suit the company’s strategy and then develop the concepts, business cases, and road maps for those use cases.”