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in Stanley Kubrick’s epilogue 2001: space flight, Starchild appears. From the depths of space, a newborn superhuman looks down on Earth, and the blue planet is just one potential world in an infinite universe of its own. This iconic scene perfectly depicts what is happening to human civilization at the moment.
Every day for the past two years – since the start of the COVID-19 pandemic – people have been born with a perception of reality radically different from ours. I call them Generation W – “the weakness of you” – because from the moment they are born, they have a “dual” identity, one physical, one digital. Very soon, all industries and global markets will be reshaped to suit their specific preferences. And business must be flexible, because the core value of Generation W will not be just the freedom to choose goods and services, but the instant switching between different lifestyles—in effect, the transition between worlds.
The foundations of the W economy have already been laid: by the end of 2021, the market value of which virtual worlds will be rapidly created in the coming years has reached $500 billion. Today, the bulk of that market, which is 40.2% or roughly $201 billion, is gaming, including software and hardware. It also includes virtual goods (10.8% or $54 billion), Non-fungible tokens or NFTs (8.2% or $41 billion) and augmented, virtual, and mixed reality (AR/VR/MR) technologies (5.6% or $28 billion). More than a third (35.2%, or $176 billion) of the market is made up of other services related to the development of metaverses. This is where the most powerful engine of exponential growth is located in the future.
Although widely-expert forecasts of the relative growth of individual sectors of the W economy may vary, one thing is indisputable: the equilibrium will inevitably shift in favor of the metaverse. By the end of this decade, growth in metaverse-related services and selling virtual goods will outpace everything else, gaining an overall market share of 82% by 2030. Generation W will make that leap.
Image courtesy of the author.
How will the behavioral patterns and values of people who are accustomed since childhood to exist simultaneously in digital and physical environments be determined? The new economic model? I think the answer lies in the interface between information technologies and marketing – in the logic of personalization. From the very beginning, computer programs, and later, web editors allowed multiple options for settings – functions, extensions, filters. Back at the end of the last century, according to the leading new media theorist Lev Manovich, this principle was applied across the field of communications, including B2C interaction. In the same way that users can improve programs according to their own requirements or create an avatar in a computer game, they can receive customized goods and services, create objects from modules and use a system of personal recommendations.
But improvements in targeting algorithms and personalizing consumer items are merely derivatives of an overall cultural and civilizational shift, facilitated by the diversity of social networks. Zoom tools are constantly customizing their identity, adding more details, specifications and settings. They compile this identity from an extensive catalog, starting with basic menu options like origin, gender, and marital status, before moving on to additional options, like vegan, K-Pop fan, or life coach. I believe that Generation W will personalize reality in a similar way.
The ability to customize your own environment, design your own living space and, moreover, enjoy unlimited freedom to choose among many different worlds are core values of Generation W and will provide the platform to implement this need by metaverses. Cities, offices and virtual entertainment centers, superimposed on the physical world, physical reality augmented with digital objects and interfaces, will be connected via 3D internet networks to provide an immersive experience unlike anything mankind has known before. They will create a market potentially worth $5 trillion by 2030.
The metaverse will not only lead to the neglect of classic marketing strategies, but also eliminate the very concept of “consumer behaviour”. Generation W won’t buy and consume in the traditional sense: whatever they call it, they’ll pay for it is being– Pay to continue being inside one or more of your favorite universes. Today’s paid subscriptions and gaming monetization are but a dim blueprint for the business models that will emerge in the overseas world of the future.
Image courtesy of the author.
It is already clear that working with Generation W will require above all developing technologies for sharing and retention. Users will evaluate the quality of the digital product right from within it. The competition will unfold not between physical and digital reality but between many mixed, convergent and mixed environments. It is predicted that by 2028, the global AR/VR/MR technology market will be worth $250 billion, while the usability and convenience of ‘gates’ to entry into the metaverses will also improve.
The metaverse will become not so much a way of life as a way of living: by 2030, the human avatar market will approach $530 billion, with NFTs, digital art worth more than $200 billion and digital fashion $55 billion. And of course, the gaming sector will also expand significantly – to nearly $550 billion. But it will undergo structural changes and find itself trapped within the metaverse and Web3 like a Russian doll. Generation W will connect, work, study, rest, travel and love in a digital space designed for them by IT companies and tech startups, all while being their own, because customization and expanded personal settings will elevate each participant to the next level. “Co-author” status for new virtual environments – the literal creators of their being.
With a deep understanding of these trends, I don’t consider a prediction by global investment bank Citi that the number of metaverse users could reach five billion by the end of the decade as overly optimistic. After all, having created their own universe, Generation W wouldn’t want to give it up. By following the logic of assignment, they would be willing to invest in maintaining and developing those universes. The question of how cryptocurrencies, digital assets, virtual reality, products and services will lose any meaning. Human civilization will move into the metaverse, while global industries and markets will be integrated into Metanomics via off-the-shelf units.