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Metaverse may be a multi-billion market opportunity, the next tech platform
01 August 2022 |
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In a metaverse, several 3D virtual environments emphasize human interactions. A virtual reality (VR) and augmented reality (AR) headset is often utilized in fictitious and futurist science movies and videos to suggest one, global virtual world which is supported by the usage of the headsets. Due to the rising need for immersion, virtual reality technology is often related to metaverse development. It is thought that Web3, and the basis for a diverse internet, has impacted the process of developing the metaverse. Using buzzwords like Web3 and The Metaverse to overestimate the advancement of different connected technologies and initiatives for public relations objectives is a common practice nowadays. Metaverses have issues with privacy, addiction, and user safety, all of which derive from the social networking and software industry as a whole.
With a market potential of approximately $800 billion, the metaverse is estimated to be the next large technological platform that will attract online game producers, social networks, and other technology giants. The metaverse is the coming generation of technology and internet interactions utilizing instant 3D software to bring together the physical and digital domains. It creates a new business potential for prominent online entertainment and social media organizations. Companies that are most vulnerable across sectors have been included in a global metaverse topic basket. Investors ought to anticipate earning a considerable percentage of personal income through a VR platform, experience, as well as transaction. For online game developers and gaming gear, the primary market may approach $400 billion in 2024. On the other hand, prospects in live shows and interactive media cover the remaining amount.
Based on recent research, this sector may grow by over $780 billion in 2024, up from around $479 billion in 2020, reflecting a yearly growth rate of 13.1%. Live entertainment like concerts and sporting events, as well as social media advertising-income, may increase as these developers keep enhancing their games into the 3D online universe which more closely imitates the social interactions of human beings. Gaming software, services, and advertising income are just a small portion of the entire Metaverse business. 3D virtual worlds, which are becoming more popular, are a potential revenue source for many online game developers.
The current gaming software and service sector and increased sales of gaming gear will be the key Metaverse income opportunities for video game developers in the future. More than two-thirds of the industry's income comes from in-game advertising and software and services revenue. This market is anticipated to grow to about $413 billion in 2024 from $275 billion in 2020. For online game developers, it's important to get a larger piece of the market by elevating current games into virtual worlds, even if this industry is already established. For the balance of the core market potential, the gaming gear, including gaming PCs and accessories, as well as AR/VR devices like Facebook's Oculus, is included.
To make use of the Metaverse possibilities, game developers may use real events, such as concerts, film screenings, and sporting events, to create 3D virtual worlds. Epic Games and Roblox have previously held events within their gaming platforms, while Unity is looking to explore ways to introduce live sporting ideas and tools into the 3D development kits. Money from a live entertainment enterprise that potentially becomes an inclusion of the Metaverse concept—films, live music, and sports—may top $200 billion in 2024, approximately flat compared to 2019.
The combination of the megatrends of gaming, social, and user-generated content may pit online game developers against current social networks for control of the $800 billion Metaverse economy. Game engine makers Unity and Epic may experience more software demand as Facebook's user base and virtual reality initiatives grow.
However, there is still plenty of chances for other gaming developers and interactive media firms, such as Roblox, Minecraft, and Epic Games' Fortnite to alter their current services or develop other ones to benefit from the Metaverse's rapid growth, EA's The Sims, Take-GTA Two's Online, Nexon's MapleStory, and Dungeon&Fighter Online have achieved the attraction of active user populations in great numbers. These firms may try to include more user-generated content and social features to meet the growing demand for Metaverse services. Virtual 3D environments in video games have the potential to increase user engagement and, therefore, revenue development.
However, insurers are seeing big chances to provide current and new products in the metaverse. However, they will have to overcome enormous regulatory skepticism in a sector that is fraught with privacy and cybersecurity threats to succeed. As the use of metaverse-based platforms becomes more widespread, it is projected that security concerns regarding the digital identities of people and companies will likewise rise in tandem. Insurance industry analysts estimate that, among other hazards, persons and property will need to be protected against electronic crime, robbery, malware, privacy violations, and business disruption.
According to Carl Niedbala, co-founder, and chief operating officer of Founder Shield, an insurance broker, there may soon be an opportunity to provide financial protection for land and property in the metaverse. There will undeniably be a significant opportunity for internet insurance providers to distinguish themselves from the competition by offering enhanced protection and sponsorships that take into account the increased risk associated with the greater proportion of an individual's wealth that is tied to their internet experience, he continued.
The notion of a metaverse, also known as a virtual world, gained widespread attention when internet giant Facebook endorsed it last October and changed the name of its platform to Meta to reflect an expanded emphasis. Metaverse systems are often powered by blockchain, cryptocurrencies, and non-financial tokens (NFTs), all of which are subject to little to no governmental control. Experts are concerned that broad use of the metaverse may bring with it new but highly uncertain dangers. For example, it is unknown if an individual user with a poor security protocol may serve as an entry point into broader cybercrime operations - a concern that has risen to the top of the priority list in recent months, particularly in light of Russia's invasion of Ukraine.
i. Source: Bloomberg Market Intelligence, Statista
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