opinion Consulting giant McKinsey & Company played a round of MythBusters: Metaverse Edition.
Although its origins are in the 1992 science fiction novel snow crashThe Metaverse has been widely talked about in business circles for the last few years as if it were a real thing, culminating in Facebook’s earth-shattering rebrand to Meta in October 2021.
The Metaverse, except for the name, is already here and has been in the realm of online video games for some time. However, Meta CEO Mark Zuckerberg’s vision is not.
Why? Consider what Zuckerberg wrote when introducing the Pivot:
It’s a big request. And while it may be closer to practical reality than, say, quantum computing or sentient AI, the metaverse makes any of the above easier than, say, working from home, or dialing into a Zoom call, or shopping with a good old fashioned search bar , without having to strap on an Oculus Rift? Not to mention, Zuck’s suggestion that we don’t have to go outside anymore is a bit chilling.
Zuckerberg wants to create a make-believe world where you can hide from all the damage Facebook has done
However, companies continue to attempt to bring about the metaverse of everyday life, and now it’s McKinsey’s turn to convince us that technology is forever here to stay.
“We were curious to hear what typical American consumers are thinking and how their views might inform how brands can enter this new space,” writes the global consultancy. “To find out, we surveyed over 1,000 consumers aged 13-70 and spoke directly with advocates and early adopters to understand current sentiment on the Metaverse.”
Based on these responses, the company “debunks” six myths about the metaverse and suggests that “consumers of all ages will shape its purpose and wealth.”
OK, I bite.
Myth #1: Nobody knows what the Metaverse is
Now that Facebook is Boomerbook and the company’s transition to Meta has rattled the train to all corners of the tech industry, it’s not a big step to say that many people have at least heard of Metaverse, apart from uncontacted tribal societies.
“In terms of awareness, 55 percent of respondents to our survey said they had heard of at least one existing Metaverse platform, such as Roblox, Fourteen daysor decentralizedsaid McKinsey. “Interestingly, nearly 30 percent said they had used or played at least one Metaverse game.”
Among early adopters, McKinsey said 47 percent described the Metaverse with “vivid clarity,” a third described it as “a digital world beyond what a person could imagine,” and the rest had no idea what they were talking about. But the consultant was confident that 75 percent of early adopters were able to define the Metaverse in “fairly precise terms,” which is what one would hope for, given they’re “early adopters.”
We’re not sure if it was a myth to begin with.
Myth #2: The Metaverse is a fad
Hmm, tricky. Can something be a fad when basically nobody uses it for anything outside of gaming? Big tech doesn’t want to be behind the curve, so consumer-facing companies are sure to name a drop in earnings.
McKinsey expressed skepticism about LinkedIn founder Reid Hoffman and fashion bigwig Bernard Arnault’s concept, but noted that Gen Z, Millennials and older generations all expect to spend several hours a day in the Metaverse, “driven by desire for more convenience and connectivity and entertainment.”
In a world where just four hours on the internet would make a good, healthy day, that doesn’t sound surprising. Convenience, connectivity, and entertainment are just three reasons we’re already glued to screens, and if the Metaverse is indeed the “Internet of the Future,” why should that change?
But considering the metaverse hasn’t launched in any significant way so far, perhaps we should respectfully reserve our judgment for now.
Myth #3: The Metaverse is for gamers
This is where McKinsey’s findings become interesting. The research reveals a number of “digital activities” that respondents said they would perform in the metaverse. Shopping tops the list at 48 percent, followed by telemedicine appointments at 47 and live learning classes at 46 percent. In fact, gaming was 40 percent higher than working out, attending a work conference, collaborating, “using digital payments to purchase physical or digital goods” (shopping?), and going on a date…
The numbers certainly show some sort of appetite for Metaverse activity outside of gaming. However, most of these can already be done on the old-fashioned internet.
Myth #4: The Metaverse is geared towards Gen Z
“Generation Z is excited about the Metaverse,” quotes McKinsey Roblox’s Majority under 16 player base. “What we’re seeing is that Gen Z isn’t the only generation looking to take advantage of the metaverse. Our research demonstrates a broad awareness and interest in the metaverse across a broad age group. In fact, millennials showed the greatest awareness of the metaverse, with two-thirds saying they’ve heard of it and half saying they’re excited about it. Gen Z and Gen X are close behind, and surprisingly, nearly half of baby boomers are aware of the metaverse.”
We’re not sure what McKinsey is trying to prove here. Gen Z and Millennials are pretty much the same, Gen X is not the old, and baby boomers are, well, baby boomers. Gen Z and above will obviously benefit most from the Metaverse at this rate, followed by Millennials and so on with diminishing returns as the others shed this mortal spiral.
Myth #5: There is no money to be made in the metaverse
This appears to be highly sector dependent. “Although many brands have experimented with the metaverse, obtaining data on ROI has been a challenge,” says McKinsey. Looking at their numbers, what the consulting firm considers “digital metaverse products or assets” is limited to in-game purchases, virtual cosmetics, virtual real estate, and NFTs. These are closely related to gaming, and it’s uncertain how much more patient the general population has for NFTs. As for virtual real estate, Earth 2 comes to mind, where people actually spend money to own land on a virtual Earth.
According to McKinsey, video games, digital films, mobile apps, books and audio content are not among the Metaverse assets, but are expected to achieve higher growth rates over the next five years.
McKinsey estimates that “consumers spend an average of $219 per year on digital assets, of which more than 30 percent is Metaverse-related assets.”
so you can Making money, it just depends if you want to get into the dirty and downright moronic non-fungible token business. Brands that make real things may have problems.
Myth #6: The speed of technology will set the pace for adoption
Here we get to the heart of what most people think of as the metaverse – an advanced internet powered by virtual and augmented reality devices.
“Many people believe that widespread adoption of the metaverse is being hampered because technology isn’t keeping up. Consumer adoption of immersive devices remains low, and there are infrastructure barriers standing in the way of a truly scaled, immersive metaverse future,” says McKinsey.
In plain language, few own a VR headset or haptic gloves or whatever. They’re not even that popular in gaming, as carrying a chunky visor, most often attached to your console or PC, is a limitation and the field is little more than a niche gimmick.
However, McKinsey believes that “the adoption curve to date follows the trajectory of other technologies that have become more widespread over time,” meaning that VR technology will likely be more widely adopted later, like smartphones, laptops, smart TVs, and such further on.
As a result, companies continue to invest in technology and are driven to innovate by consumers who want products to be less cumbersome and easier to use. However, whether it will ever reach smartphone penetration levels is a vague science.
McKinsey concludes, “Our study shows that consumers are excited when brands enter the metaverse. Two-thirds of respondents say they would look forward to a digital experience with their favorite brands. More than half of people attending virtual lifestyle and luxury events report a positive change in brand perception.
“It is clear that we are only at the beginning of the metaverse as we know it today. As experimentation expands, there will be an explosion of creative, commercially viable ideas that will transform the way we work, play, connect and engage. Brands need to define their Metaverse strategy – and deciding which path to take will depend on what they believe about adoption, opportunity and investment required.”
So you know what to do, brands. Start working on your metaverse strategy or stay behind. Even if there isn’t really a coherent metaverse yet, and we might already be living in it to some degree. ®