Banking giant JPMorgan sees $1 trillion value in metaverse

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JPMorgan believes that there is over $1 trillion of value to be unlocked when it comes to metaverses. In their recently released report “Opportunities in the Metaverse,” JPMorgan says:

The metaverse will likely infiltrate every sector in some way in the coming years, with the market opportunity estimated at over $1 trillion in yearly revenues. As a result, we see companies of all shapes and sizes entering the metaverse in different ways, including household names like Walmart, Nike, Gap, Verizon, Hulu, PWC, Adidas, Atari, and others.

The investment bank describes the metaverse as interactive digital worlds with “exciting opportunities” for consumers and brands. They believe consumers will mainly use the metaverse to work, play, transact, and socialize while enterprises take advantage of the marketing and advertising opportunities available to them in the metaverse.

Why now?

JPMorgan believes the metaverse is beginning to take off because technological innovations and global conditions have catalyzed digital innovation. Advancements have been made in augmented reality (AR) and virtual reality (VR) that have lowered the cost of the headsets needed to enter metaverses and allowed for “improved user experiences.”

Blockchain networks have evolved, especially by way of NFTs, which have created a way for metaverse users to easily buy, sell, and trace the history of the digital items that are obtainable within a virtual world.

And lastly, coronavirus has forced the world to adopt digital alternatives in place of the in-person experiences that were postponed or suspended during the height of the pandemic.

Unique selling points of the metaverse

JPMorgan says the unique selling point of the metaverse will be digital ownership models. The report cites instances where consumers and enterprises have bought digital land within metaverses for hundreds of thousands of dollars. JPMorgan says that digital ownership models will play a crucial role in metaverse economies, or as the report refers to it, “Metanomics.”

They believe brands will take advantage of digital ownership models and use the digital land they purchase to advertise. Outside of marketing and advertising, the investment bank believes that advancements in AR/VR will create new opportunities for businesses and consumers to increase operational efficiency.

“Take a manufacturer that is buying new parts for its equipment,” says the report.

“Presently, the process involves receiving a physical brochure or an emailed PDF with static 2D pictures. In the metaverse, users could test the products in a virtual environment at lower cost. Imagine being able to build a complex digital twin of a factory or industrial space at massive scale, and test how robotics systems will interact with the physical environment.”

What’s preventing metaverse mass adoption?

Although JPMorgan believes the metaverse has a lot of potential, they think there are obstacles in metaverse growth. Although the technological infrastructure that enables metaverses has improved, it needs to further evolve; and tech standards will need to emerge that allow for the digital assets within metaverses to be transferable across virtual worlds.

But ultimately, JPMorgan believes that there is a lot of value that can be unlocked when it comes to metaverses and that there is not much risk in exploring metaverse opportunities for your business.

“In the metaverse, some of the existing services and business models we are familiar with will continue to exist, but the metaverse opens a whole new realm of ways to engage which we expect will lead to uniquely new services and business models. Not everything in the metaverse will be relevant for every business. However, there is little downside to taking the opportunity to explore,” according to the report.

To learn more about the metaverse, what metaverses will look like, how individuals and businesses will interact with the metaverse, and what the unique selling point of the metaverse will be, watch BSV Stories – Episode 7, “Unravelling the metaverse at the CES Tech Las Vegas 2022.”