Opinion Consulting giant McKinsey & Company has been playing a round of MythBusters: Metaverse Edition.
Though its origins lie in the 1992 sci-fi novel Snow Crash, the metaverse has been heavily talked about in business circles as if it’s a real thing over the last year or so, peaking with Facebook’s Earth-shattering rebrand to Meta in October 2021.
The metaverse, in all but name, is already here and has been for some time in the realm of online video games. However, Meta CEO Mark Zuckerberg’s vision of it is not.
Why? Consider what Zuckerberg wrote when introducing the pivot:
It’s a big ask. And though it might be closer to practical reality than, say, quantum computing or sentient AI, what about the metaverse makes any of the above easier than, for example, just 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 that Zuck’s suggestion that we won’t need to go outside anymore is somewhat terrifying.
Zuckerberg wants to create a make-believe world in which you can hide from all the damage Facebook has done
However, companies continue to try to talk the metaverse of everyday life into existence, and now it’s McKinsey’s turn to convince us the that forever-incoming tech is indeed incoming.
“We were curious to learn what typical American consumers think and how their views could shape how brands may venture into this new space,” the global consultancy writes. “To find out, we queried over 1,000 consumers aged 13 to 70, as well as spoke directly to advocates and early adopters, to understand current sentiment about the metaverse.”
The company goes on to “debunk” six myths about the metaverse based on these responses, suggesting that “consumers across age cohorts will shape its purpose and prosperity.”
OK, I’ll bite.
Myth #1: No one knows what the metaverse is
Since Facebook is now Boomerbook and the company’s transition to Meta rattled the bandwagon to every corner of the tech industry, it isn’t a huge leap to say many people have at least heard of the metaverse save for uncontacted tribal societies.
“When it came to awareness, 55 percent of our survey respondents said they had heard of at least one existing metaverse platform, such as Roblox, Fortnite, or Decentraland,” said 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 “vibrant clarity,” a third described it as “a digital world beyond anything a person can imagine,” and the rest didn’t have a clue what they were talking about. But the consultant was confident that 75 percent of early adopters could define the metaverse in “fairly accurate terms,” which you would hope seeing that they are “early adopters.”
We’re not sure it was a myth to begin with.
Myth #2: The metaverse is a fad
Hm, tricky. Can something be a fad if essentially no one is using it for anything outside gaming? Big Tech doesn’t want to be behind the curve so, yes, consumer-facing companies will be sure to namedrop in earnings calls.
McKinsey cited skepticism towards the concept from LinkedIn founder Reid Hoffman and fashion bigwig Bernard Arnault, but found that Gen Z, millennials, and older generations all expect to spend several hours a day in the metaverse, “driven by a desire for greater convenience, connectivity, and entertainment.”
In a world where just four hours on the internet would be a good, healthy day, this does not sound surprising. Convenience, connectivity, and entertainment are just three reasons why we are glued to screens already, and if the metaverse is indeed the “internet of the future,” why would this change?
But considering that the metaverse has so far failed to take off in any meaningful way, perhaps we should respectfully withhold judgement for now.
Myth #3: The metaverse is for gamers
Here is where McKinsey’s findings get interesting. The research shows a number of “digital activities” respondents said they’d perform in the metaverse. Topping the list is shopping at 48 percent, followed by telehealth appointments at 47, and live learning courses at 46 percent. In fact, gaming was way down at 40 percent above exercising, attending a work conference, collaboration, “using digital payments to purchase physical or digital goods” (shopping?), and going on a date…
The figures certainly show some form of appetite for metaverse activities aside from gaming. However, the majority of these can already be performed on the old-fashioned internet.
Myth #4: The metaverse is geared to Gen Z
“Generation Z is enthusiastic about the metaverse,” says McKinsey, citing Roblox’s majority under-16 player base. “What we see is that Gen Z is not the only generation that wants to take advantage of the metaverse. Our research shows broad awareness and interest in the metaverse across a wide age range. In fact, millennials showed the greatest awareness of the metaverse, with two-thirds saying they had previously heard of it and half expressing excitement about it. Gen Z and Gen X trail closely 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 isn’t that old, and baby boomers are, well, baby boomers. Gen Z and up will obviously benefit most from the metaverse at this rate, followed by millennials and so on with diminishing returns as the others shuffle off this mortal coil.
Myth #5: You can’t make money in the metaverse
This one seems heavily sector-dependent. “Although many brands have experimented with the metaverse, it has been challenging to get data on the return on investment,” says McKinsey. Looking at their figures, what the consultancy deems “metaverse digital products or assets” are 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 patience the general populace 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.
Video games, digital movies, mobile apps, books, and audio content don’t count as metaverse assets, according to McKinsey, but are set for higher growth rates over the next five years.
McKinsey reckons “consumers, on average, spend $219 annually on digital assets, of which more than 30 percent is on metaverse-related assets.”
So you can make money, it just depends on whether you want to get into the dirty and downright moronic business of non-fungible tokens. Brands that make actual things may struggle.
Myth #6: The speed of technology will set the pace for adoption
Here we get to the crux of what most people consider the metaverse – an advanced internet driven by virtual and augmented-reality devices.
“Many people believe that the broad adoption of the metaverse is hindered because technology is not keeping pace. There remains low penetration of immersive devices among consumers, and there are infrastructure barriers in the way of a truly scaled, immersive metaverse future,” McKinsey says.
In plain English, few own a VR headset or haptic gloves or whatever. They aren’t even that popular in gaming as having to wear a clunky visor that is more often than not wired into your console or PC is a restriction, and the field is little more than a niche gimmick.
However, McKinsey believes “the adoption curve to date follows the trajectory of other technologies that became widely available over time,” which is to say that VR technology will probably be more widespread down the line, like smartphones, laptops, smart TVs, and so on.
Companies therefore continue to invest in the tech and are driven to innovate by consumers wanting the products to be less cumbersome and more useable. Whether it will ever reach the smartphone level of penetration, however, is a vague science.
Concluding, McKinsey says: “Our research shows that consumers are excited about brands entering the metaverse. Two-thirds of respondents indicate they would be excited to engage in a digital experience with their favorite brands. Over half of people who attend virtual lifestyle and luxury events report a positive shift in brand perception.
“It is clear that we are only at the beginning of the metaverse as we know it today. As experimentation broadens, there will be an explosion of creative, commercially viable ideas that will transform the way we work, play, connect, and engage. Brands will need to define their metaverse strategy – and the decision on which path to take will depend on what they believe about adoption, opportunity, and investment required.”
So you know what to do, brands. Start work on your metaverse strategy or be left behind. Even if there isn’t really a coherent metaverse yet, and we may already be living in it to some degree. ®