The total addressable market (TAM) for the metaverse economy could be between $8 trillion and $13 trillion by 2030, with up to five billion users in the near future. However, considering it is still in its upcoming stages, getting to that market level will still require sizeable infrastructure investment.
The metaverse is an immersive digital world created by the combination of virtual reality, augmented reality and the internet. In order to create the "ideal" metaverse, investment will be required in areas such as storage, network infrastructure, consumer hardware and game development platforms, among a few others.
However, although fresh in consumers' minds, the metaverse concept isn't new, the bank's analysts noted. The interest in the metaverse really began to snowball at the end of 2021 due to the rise in sales of non-fungible tokens (NFTs) and big technology companies announcing their interest in the sector. To give you a better idea, NFTs are digital assets on a blockchain that represent ownership of virtual or physical items, and can be sold or traded.
Currently the most popular way to experience the metaverse is by playing a video game on a virtual reality (VR) headset, Citi said, but it is possible that the "metaverse is moving towards becoming the next generation of the internet or Web3." This 'open metaverse' would be community-owned, community-governed and a freely interoperable version that ensures privacy by design," the report said. Its use cases include commerce, art, media, advertising, healthcare and social collaboration.
Monetarily, this open metaverse is expected to differ from the real world, with different forms of crypto currency expected to dominate. These would include flat currencies, central bank digital currencies (CBDCs) and stable coins, the report said.
If the metaverse is the new iteration of the internet, it is likely to attract greater scrutiny from regulators, policymakers and governments, and issues such as anti-money laundering rules, the use of decentralised finance (DeFi), crypto assets and property rights will all have to be addressed, in order for the metaverse to be a sustainable environment. However, those issues would soon be addressed as the metaverse matures with time through involvement of companies, users, policymakers and creatives. Till then, it is undeniable that this future $13 trillion industry has proved its potential from the few months since its come up with brands like Nike, J.P. Morgan and Meta heading towards its direction.