Why CEOs Shouldn’t Miss the Metaverse Bus

In just four years from now, one out of four people around the world will spend at least one hour a day in the metaverse for various activities such as work, shopping, education, socializing and entertainment, according to a study by research firm Gartner. Given this statistic, it’s not surprising that in 2022 investments in the metaverse reached over $120 billion, double of what was witnessed in 2021.

According to global management consultancy McKinsey, in the next eight years, the metaverse is expected to generate $4- $5 trillion in value, roughly the size of Japan’s economy, the third largest in the world. This is a staggering increase from the current size of $200 -$300 billion. This growth is expected on the back of several factors like consumers’ readiness to spend on metaverse assets, openness to adopting new technologies and companies’ heavy investment in the required infrastructure.

The sheer size of the opportunity is too big for CEOs to ignore it and speaks volumes about adding metaverse to marketing mix of the company. In fact, some companies have started doing so and are making their presence felt in virtual worlds like Roblox, Fortnite, and the Sandbox. The fashion brand Nike is a case in point. It has made waves by hosting more than 26 million visitors at Nikeland, its space in Roblox, and has sold over $185 million of NFTs for digital sneakers and other such products. Another brand Gucci is also hosting its own metaverse experience in The Sandbox. In a survey conducted by McKinsey, in April 2022, some 95 percent of business leaders expect the metaverse to have a positive impact on their industry within five to ten years, and 61 percent expect it to change the way their industry operates.

Reserving the seat

The new iteration of the internet has the potential to upend various sectors such as banking, manufacturing, media, professional services, retail, and telecommunications. Therefore, it’s important for CEOs to reserve the seats of their companies by taking a few crucial steps.

As a first step, CEOs should ponder upon questions:”what can they do in the metaverse?” and “why does the metaverse fit into their growth and innovation agenda?” Secondly, they should consider identifying and prioritizing practical use cases that suit the company’s strategy and then develop the concepts, business cases, and road maps for those use cases. Lastly, the CEO can perform two functions: set the vision and choose leaders for each use case and initiative. These leaders can ensure that the initiatives are closely embedded in functional agendas.

The good news is that the efforts are already being made in this direction. Several companies, including L’Oréal, have already appointed a chief metaverse officer. In February 2022, Walt Disney announced the appointment of Mike White, a company veteran, to lead the company’s strategy for the metaverse.

In the coming years, many companies will want to partner with specialist providers for hardware, software, and metaverse-related development services.