Metaverse User Base Could Top 1B by 2030, but Hurdles Remain: ABI

By 2030, the number of active users in virtual spaces will top 1 billion, up from 118.3 million last year, said an August ABI Research report on metaverse market opportunities. User-generated revenue is projected to grow from $4.2 billion to $44.8 billion over the span. That doesn’t include transaction volume for related non-fungible tokens (NFTs) or dedicated AR/VR revenue, which it said will add “billions of dollars” more, ABI said.

The arrival of mainstream-level smart glasses will play a role in bringing “transformative changes” within the video industry for the metaverse, ABI said, saying the devices will give consumers more choice and control of TV viewing. Digital identity management will help video ecosystems and the value chain support the buildup to the metaverse, the report said.

Gamers already embrace a digital-first market and pay for digital assets and goods, though wide acceptance of NFTs “remains elusive,” ABI said. Trends in gaming have led to more live service games and platforms, creating a foundation for “future persistent worlds in the metaverse,” it said. Virtual gaming spaces are creating connections to other segments within media and entertainment such as live virtual concerts and events, plus group video viewing sessions.

Microsoft’s recent buy of Activision Blizzard and Sony’s Bungie acquisition indicate the industry is gearing up for more live service games and virtual worlds, ABI said. Meta, in addition to its Oculus and Horizon properties, is targeting the metaverse through video, gaming and social media.

The gradual migration to cloud services has metaverse elements, such as broader accessibility to content and services, the report said. Lowering the price of entry by moving the computer from the client device to the cloud reduces barriers to entry and opens the gaming market to more consumers outside the core gaming base, it said. Cloud gaming also creates more opportunities to push content and services into public spaces by making gaming more portable, resulting in more immersive experiences like AR; it drives use cases for technologies like 5G/6G and edge computing, which will play key roles in the development of the metaverse, it said.

Revenue growth in media and entertainment markets will approach $2 trillion by 2030, ABI estimates, though inflation, political instability and recession could impede growth. Most revenue isn’t allocated directly to the metaverse now, but can act as a total available market (TAM) and a potential source of additional income if adoption of virtual spaces and business models, such as Web3 elements like blockchain, are adopted at rates higher than projected, it said.

A potential obstacle to the metaverse’s TAM is broad consumer reluctance on blockchain and cryptocurrencies, key elements of Web3 that are limiting near-term expectations for the nascent consumer marketplace, such as virtual real estate and NFTs, ABI said. The research firm expects the gaming market to keep momentum moving in the consumer space “until other elements, such as advertising and social, play a larger role.”

Digital advertising will be a driver in the buildup to the metaverse and broader media and entertainment landscape, ABI said. Privacy concerns and regulations are driving changes in ad tracking and attribution that will push further into areas including self-sovereign identity where consumers own and control their identity, without administrative authorities as a go-between. In that environment, market pressures will create new opportunities for companies to be aggregation points for data exchanges and centers of trust, it said, citing SK Telecom’s T Universe as an early example. If the metaverse meets its “lofty projections”-- and merges the physical world with virtual spaces -- it will need to build on work being done on digital identities and data/content management, the report said.

Immersive collaboration in the workplace will create services and hardware revenue of $64 billion by 2030, up from $24 billion in 2020, ABI said. It referenced platforms and services within virtual or immersive environments that don’t require head-mounted displays, citing Spatial, Glue, Arthur, MeetinVR and The Wild. It also cited virtual headquarters designed to replicate the in-office experience to bridge the gap between remote and in-office experiences, along with virtual meeting spaces and conferences.