It’s no secret that the metaverse is emerging as a colossal business opportunity. Predictions vary, but it’s anticipated to be valued at up to $800 billion by 2024, and some even foresee it growing to an astounding $5 trillion by 2030. With these staggering projections in mind, an increasing number of businesses are eager to establish a foothold in the metaverse and integrate it into their operational fabric.
However, amidst the growing enthusiasm, there’s a fog of uncertainty surrounding what the metaverse truly represents, its potential evolution, and the optimal approach for businesses looking to tap into its immense potential. For CEOs, the pressure to dive headfirst into the metaverse may seem tempting, fearing the risk of missing out on what could be the next big wave.
In this environment of ambiguity, it’s crucial for leaders to decipher the developmental status of the metaverse and the benefits of engagement. Surprisingly, for many CEOs, resisting the urge to formulate an immediate metaverse strategy may be the most prudent course of action.
Understanding the Metaverse
A central challenge in discussing the metaverse today is that the term means different things to different people. Divergent perspectives stem from varying perceptions and aspirations about what the metaverse might become in the future.
At times, it appears that the metaverse is primarily tailored for gamers through platforms like Roblox, Decentraland, or Fortnite. While there may be value for certain industries, this might seem limited for many CEOs.
Interpretations abound, with some likening the metaverse to an evolution of the current internet – an “internet-plus” as described by McKinsey. This interpretation provides a more accessible understanding, given the ubiquity of the internet.
However, alternative views suggest a more comprehensive and complex metaverse, described by thinkers like Matthew Ball. Ball envisions the metaverse as a network of real-time rendered 3D virtual worlds and environments, capable of hosting an unlimited number of users, each with a distinct sense of presence and a continuity of data. For many executives, this intricate definition poses challenges on where to begin engaging with such a multifaceted concept.
Another source of confusion is the hardware requirement for accessing the metaverse. Some, like Mark Zuckerberg, insist that virtual reality (VR) devices are essential, but skepticism persists regarding the widespread adoption of such cumbersome technology.
A Simplified Definition
In the face of these uncertainties, it’s typical for a groundbreaking technology like the metaverse to have an evolving and ambiguous definition. The internet’s early days were described as an “information super-highway,” with no consideration for visuals or user interaction. Similarly, AI started as rules-based systems and transformed into machine learning-driven solutions. As technologies mature, so do our definitions of them.
For CEOs grappling with the concept of the metaverse, a simplified, practical definition may be the most useful:
“The metaverse is a virtual world in which we experience 3D renditions of people, products, and places.”
This definition encapsulates the essence of various metaverse models across platforms and their potential business applications. The key to the metaverse is the immersive feeling of entering a new world, whether through avatars or other means.
Why CEOs Might Not Need a Metaverse Strategy Just Yet?
Given the complexity and uncertainty surrounding the metaverse, many CEOs may find that rushing to develop a comprehensive strategy is premature. Such an approach could lead to a technical bias, drawing organizations into deep technical debates about VR, augmented reality (AR), or mixed reality (MR).
Instead, CEOs should maintain a clear focus on their business challenges. While the allure of a potentially $10 trillion market is undeniable, it’s essential to recognize that these technologies are still in their infancy.
For now, CEOs should prioritize understanding a limited definition of the metaverse and cautiously engage with these new virtual worlds, all while conducting a sober analysis of the specific business problems they aim to solve.
