Trillions of Potential Reasons to Invest in the Metaverse

Global metaverse spending by consumers and businesses could reach $5 trillion by 2030, according to a recent report from consulting firm McKinsey & Company.[1]  What may drive this growth in metaverse spending?  How are businesses responding?

 

$5 Trillion by 2030

McKinsey interviewed 3,104 global consumers and polled executives from 448 companies across 15 industries in 10 countries.  Based on their research, they estimate global metaverse spending by 2030 will reach $5 trillion.  The study estimates the largest impact in the following sectors:

  • E-commerce - $2 trillion to $2.6 trillion
  • Virtual learning - $180 billion to $270 billion 
  • Advertising - $144 billion to $206 billion
  • Gaming - $108 billion to $125 billion

 

Substantial Investment in the Metaverse

Business leaders continue to signal their confidence in the metaverse space through significant investments.  During the first five months of 2022, over $120 billion worth of investment flowed into the metaverse space, more than double the entire $57 billion invested in 2021.

 

According to the report, this growth is being fueled by the following factors:

  • Ongoing technological infrastructure enhancements needed to power the metaverse
  • Favorable demographics
  • Desire to increase consumer-led brand marketing and engagement
  • Increasing marketplace readiness and enthusiasm
  • The existing 3 billion gamers who already have access to different versions of the metaverse

 

Consumers Are Enthusiastic About the Metaverse

Consumers are enthusiastic about the functionality of the metaverse.  McKinsey reports that almost 60% of consumers are excited about the transition of everyday activities to the metaverse, with connectivity being the number one driver of excitement.  59% of survey respondents said they preferred at least one virtual activity versus physical, while some 79% of consumers have already made purchases in the metaverse .   The following were the most preferred activities in digital spaces versus their physical alternatives:

  • Shopping
  • Attending virtual games and events
  • Virtual reality exercise
  • Dating
  • Education (classes/learning events)

 

Company Executives Are Equally Enthusiastic

Senior executives of companies surveyed also believe in the potential of the metaverse, with 95% of respondents expecting the metaverse to have a major impact on their industry within the next five to ten years.  Nearly 61% of respondents expect the metaverse to moderately change how their industry operates.  Almost two thirds of executives expect metaverse technology to drive more than 5% of their revenues within five years, with 24% expecting it to drive more than 15% of revenue.

 

The top five uses for which company executives expect to employ metaverse technology are:

  • Marketing
  • Employee education and development
  • Meetings
  • Events or conferences
  • Product design

 

Investment Opportunity

Given its estimated growth, along with the willingness of consumers to adopt metaverse activities and the investment being made by companies, the metaverse may present an attractive investment opportunity for individuals.

 

How may individuals gain exposure to the metaverse?

 

The Fount Metaverse ETF (MTVR)

The Fount Metaverse ETF seeks to provide investment results that, before fees and expenses, generally correspond to the performance of the Fount Metaverse Index.  The index was designed to measure the performance of companies that develop, manufacture, distribute, or sell products related to metaverse technology.

 

MTVR may be an attractive vehicle for investors looking to invest in the metaverse.

 

 

 

 


[1] All data sourced from: Value Creation in the Metaverse, McKinsey & Company, June 2022

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Bong-Geun Choi Chief Economist

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