Part 5: The Metaverse, How Big Can This Become

To cap off our August series on the Metaverse, we look at just how massive this opportunity could become.

Total Metaverse participants could approach one to five billion people globally by 2030, capturing up to 40% of the digital economy.

It’s potential TAM has also captured the attention of financial giants, with Citi and Goldman pegging the Metaverse as a $13 trillion and $8 trillion opportunity, respectively. In this edition, we dive into how they got to these numbers and why the opportunity is so massive.

To read the series to date, check out:

• Part 1 on how we got here.
• Part 2 on what the Metaverse is not.
• Part 3 on what the Metaverse is.
• Part 4 on why now.

Let’s dive in.

The hype around the Metaverse is driven by one primary reason: the potential is massive. In its fullest form, the Metaverse will closely touch every industry, have its own fully functioning financial ecosystem and be accessible by billions of people around the globe.

Leading institutions are starting to form a consensus that the Metaverse is not a multi-billion, but a multi-trillion dollar opportunity. Total Metaverse participants could be anywhere from one billion (VR headset users) to five billion (5G/broadband users) by 2030, with the Metaverse enabling a sizable percentage of the global digital economy. Take a look at the recent market size estimates:

Citi: $13 Trillion by 2030

Citi estimate global GDP will be ~$128 trillion in 2030, based on a global GDP growth forecast from the International Monetary Fund (IMF) of 3.5%.

They estimate the digital economy will be ~25% of global GDP, per a report from Oxford Economics.

They project Metaverse will be ~40% of the digital economy by 2030.

This gives us a TAM estimate of $12.8 trillion.

• ($128 trillion global GDP * 25% digital economy * 40% Metaverse economy)

Goldman Sachs: $8 Trillion Opportunity

Goldman calculates Metaverse TAM from two components:

• % of digital economy that shifts to Metaverse economy
• % of future TAM expansion that is driven by the Metaverse

First, they estimate digital economy at ~$15 trillion in 2021.

• $89 trillion global GDP * 16.8% digital market share = ~$15 trillion

Bear case: with ~15% of digital economy shifting towards virtual world and 2.5% market expansion from current estimated level, Metaverse is a ~$2.6 trillion opportunity.

Bull case: with ~33% of digital economy shifting towards virtual world and 25% market expansion from current estimated level, Metaverse is a ~$12.5 trillion opportunity.

The average of the two cases leads to a $7–8 trillion Metaverse opportunity.

Morgan Stanley and McKinsey also suggest the Metaverse has multi-trillion dollar potential, offering their own recent estimates $8 trillion and $5 trillion, respectively.

Conclusion

In this primer, we provide an introduction to the Metaverse. This document is a starting point, and adds context about why so many people are even talking about virtual worlds and avatars in the first place. That said, your journey into the Metaverse should by no means end here; the technologies, platforms and stakeholders in this ecosystem are constantly evolving, and being open to learning and changing perspective is essential in the current environment. We will continue to publish content on the Metaverse and its use-cases. However, please also reach out if you would like additional reading material on a topic and even to discuss thoughts on anything that has to do with the Metaverse or its adjacencies. Despite all the noise, the Metaverse is still in its first inning and collective discussion and thought leadership will help drive it forward.

To continue the conversation, we can be reached at: Aaron Farr (aaron@agyaventures.com).