Growth in digital content, services, and advertising creates a generous runway for the metaverse but headwinds could slow progress
NEW YORK, July 19, 2022 /PRNewswire/ — While the buildup toward the metaverse received a significant boost following Facebook’s rebranding to Meta, this future (or something similar) is underpinned by established trends occurring in the digital content and services markets and not recent events alone. Growth in these markets is laying the foundation for the metaverse and if trends continue (if not accelerate) this will create a healthy runway for the metaverse to properly takeoff within the consumer markets.
ABI Research, a global technology intelligence firm, sees prevailing growth rates pushing the streaming video, social, gaming, and broader digital advertising markets to collectively clear US$2 trillion by 2030. Headwinds tied to external economic and political factors, coupled with inner-market perceptual issues, however, could put a damper on some of the more optimistic expectations for the metaverse.
Michael Inouye, Metaverse Markets & Technologies Principal Analyst at ABI Research comments, “While there are high expectations for the metaverse, based on what we can see today, it looks just as likely for growth to occur more incrementally as it is to accelerate beyond our current expectations. Efforts around standardization, interoperability, better consumer education, and broader interest in facets of the metaverse like NFTs will go a long way in shaping the growth curve.”
Inouye adds, “The most transformative changes, not only to the metaverse but digital content and services at large, will occur with the arrival and spread of mainstream, consumer targeted smart glasses. We still see the bulk of this driving force, however, pushing into the 2030s, although any acceleration here would also shift forecasts and market expectations.”
Standardization efforts have started with the formation of Metaverse Standards Forum but volatility in the cryptocurrency markets, and economic and political uncertainty, will push some investors to look for less risky investments, which could limit near-term growth for the metaverse. Relatedly an economic malaise could restrict consumer spending in areas like multiple SVOD subscriptions. At this time, ABI Research holds a modest forecast for areas like virtual spaces, which is expected to approach US$45 billion by 2030 (this does not include all related NFT transaction volume), which is comparatively small in contrast to the broader landscape for digital media and entertainment. “It is however still early days, and the market remains very fluid and dynamic with significant headroom for growth,” Inouye concludes.
These findings are from ABI Research’s Consumer Metaverse: Digital Content, Services, and Advertising and Virtual Worlds and Goods: Convergence of Real and Virtual Worlds, Building Towards the Metaverse reports. This report is part of the company’s Metaverse Markets & Technologies research service, which includes research, data, and ABI Insights.
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SOURCE ABI Research