The Metaverse is attracting substantial investment, an expected $800 billion by 2024, with the GCC already on board. That’s not surprising.
The Metaverse has the potential to energize and transform key sectors in the GCC, contributing around $15 billion annually to the regional economy by 2030—of which $7.6 billion would be in Saudi Arabia and $3.3 billion in the UAE. Although the Metaverse is still developing, the pace of change is swift. Organizations in the GCC should act now and seize the opportunity.
Dubai launched a Metaverse strategy in July last. The UAE has established an incubator to advance early-stage Metaverse and Web3 applications. NEOM, Saudi Arabia’s $500 billion city on the Red Sea, uses the Metaverse to inform construction and provide architects, engineers, designers and others, an experience that allows for collaboration and customization. NEOM’s digital subsidiary created a Metaverse that allows people to be simultaneously in the city and the virtual world, in the form of an avatar or a hologram.
A true integration of human and tech
The beauty of the Metaverse is that it is neither a place nor a technology. Rather, it is the latest stage of the developing human/computer interface, one that is designed to create a seamless, pervasive, immersive, touchable, simulated experience so realistic as to parallel reality. You can visit a virtual construction site, for example, and see how buildings will look even before a shovel has entered the ground.
The Metaverse reality is built from seven components. The first is technologies such as computing and data tools (AI, data management systems, etc.), platforms (blockchain), and software applications (for use in, say, avatar development and payment services). The second is functionalities, the things that power the user experience such as 3D modeling.
The third is digital assets that may also represent physical objects such as digital land, digital buildings, digital art, and payment tokens. The fourth is engagement through hardware devices that give users access to the Metaverse.
The fifth is use cases, the differentiated experiences that create a new reality. The sixth is the Metaverse type, whether centralized (like a game maker’s), decentralized (where users are in control), or private. The seventh is regulation, including rules governing data privacy and IP, which allow the ecosystem to function.
The economic benefits of providing users with exceptional virtual experiences is significant. In the GCC, the travel and tourism sector could create $3.2 billion in value by 2030. There could be Metaverse tours of AIUla, Saudi Arabia’s first UNESCO World Heritage Site, or of fashion festivals, spas, wellness retreats, and entertainment and sports events.
Metaverse visits would inspire in-person travel. Later, travelers could return through the Metaverse to relive their experiences. Similarly, the Metaverse could generate $1.8 billion in GCC banking and financial services, with the rise of fintechs leading to more opportunities. In real estate, we estimate a Metaverse contribution of $1 billion by 2030, with developers able to offer clients virtual experiences of communities.
Organizations should move decisively to start building their Metaverse strategy through six practical actions.
• First, organizations must imagine the possibilities. The point of the Metaverse is to offer a markedly better user experience. What realistic experiences could an organization offer to bring its offerings to life?
• Second, organizations must identify relevant business use cases. Which applications best suit the organization’s business model and which are closest aligned with its purpose and aspirations? Organizations should develop pilots and start experimenting.
• Third, organizations must build a robust digital infrastructure. The Metaverse requires massive computing power as digital operations will expand rapidly. Organizations must scale up their cloud computing capacity and other digital infrastructure that enables the metaverse.
• Fourth, organizations must master blockchain, which is vital to ensure authenticity and maintain a clear chain of custody for records.
• Fifth, organizations must get smarter about data. Companies need robust, scalable data architectures and next-generation advanced analytics powered by machine learning given the exponential growth in data volume. They also need the skills and proper data-governance and management practices to master the data, so that they can design and operate effectively, and build smart decision making.
• Sixth, organizations must make cybersecurity a priority. User acceptance depends on the assurance that organizations safeguard information. Metaverse information goes beyond a user’s payment and account information—it encompasses the totality of their movements and activities in the virtual space.
The path to superlative Metaverse experiences will be complex. While organizations resolve the Metaverse’s theoretical and practical issues, leaders should focus on its promise of value creation.
They should prepare strategically and technologically now to take advantage of the possibilities tomorrow.