Despite public interest in the metaverse waning, a new report by Bloomberg Intelligence (BI) suggests the sector could be worth $615bn by 2030, largely driven by Apple’s rumoured entry into the market with a new headset. The report suggests a desire for virtual 3D shopping, a growing number of enterprise use cases including training and product development, and metaverse adoption across events and social media will be other catalysts.
The BI report, not publicly available but seen by Tech Monitor, suggests even with a slowdown in consumer spending and a lack of standards, virtual and augmented reality adoption is still likely to continue to grow and become an important industry.
Reaching the projected $615bn sector size by 2030 does rely on a company such as Apple launching a mixed-reality headset that reaches mass-market adoption, the team explained, but even without that, there is a growing market in the enterprise space. It is rumoured Apple is preparing to launch a headset imminently, joining companies such as Microsoft and Meta, which own the Hololens and Oculus headset brands respectively.
Ronnie Vasishta, SVP for telecoms at chipmaker Nvidia, which is invested in the metaverse through its Omniverse platform, told a panel at the Mobile World Congress conference in Barcelona this week: “We’re already seeing significant productivity improvements having immersive experiences within a digital twin for very complex factory or warehouse automation.”
Some companies are already exploring the use of the metaverse including DHL working on better warehouse operations, Boeing for training staff building aircraft and Unilever working on knowledge sharing across widely spread teams. BMW is building a complete digital twin of a factory and international policing agency Interpol replicating airports to train security staff.
Mandeep Singh, BI senior industry analyst (Technology), said the metaverse itself, particularly around digital twin technology, has use cases beyond just gaming. He said it could be used in areas such as e-commerce, and education. “They have the potential to drive $615bn in spending by 2030, our analysis suggests,” Singh said.
“VR/AR hardware and token and ad-based revenue will be critical on the consumer side, while public-cloud infrastructure and VR/AR enterprise software and design will be key to laying the foundation for experiences.”
Why AI is essential for the metaverse
For the metaverse sector to become a multi-billion dollar market it relies on reaching a minimum user base of 50-100 million, the authors explained, driven by mass-market headsets that may lead to cheaper versions and bring more consumers into the sphere.
This will be further driven by the use of AI. While the metaverse hype seen over the past 12 months may have subsided in the face of the popularity of generative AI tools like ChatGPT, the report suggests this very technology will be essential for driving engagement in the metaverse. “Generative AI and GPT [OpenAI’s family of large language AI models] could revolutionise metaverse engagement by offering users convincingly human interactions in a virtual landscape,” the authors wrote. “GPT’s ability to leverage large language models is an enhancement that can provide distinct responses to text, voice and gestures.”
Meta CEO Mark Zuckerberg recently announced a significant shift in the business, taking AI out of the research and metaverse division and putting it into its own product-led category where it could generate revenue faster than the metaverse.
“We believe platforms like Meta’s Horizon World or Roblox may shift to GPT to augment and expand into new areas like education. GPT could also improve how users work virtually. Consumer applications have seen better adoption early vs commercial,” the authors wrote. Adding that “GPT might boost enterprise use by improving the way employees work.”
But there are hurdles in the way. A pullback in consumer spending is slowing growth in headset sales and at the current price point rapid adoption is unlikely. IDC has predicted that AR/VR market spending will rise to $40bn from 2030 from the $4.3bn today, but if companies like Meta continue to pare back operating and capital expenditure on the metaverse, this could impact potential growth.
Meta is among the Big Tech companies announcing mass layoffs and confirmed its metaverse division was running up big losses, and just a third of Brits say they would participate in virtual worlds, but it is still pushing ahead with the metaverse as a technology platform.
If the hardware takes off and it reaches a minimum critical user base then the researchers from BI say brand partnerships and events will prove to be the path to monetisation. This is inspired by evidence of existing tools such as Roblox and Decentraland striking deals with Gucci, Nike and Coca-Cola.