January 24, 2023

Predicting The Future of Metaverse

I was rather surprised to see the following prediction come from Gartner Inc. “Gartner expects that by 2026, 25% of people will spend at least one hour a day in a metaverse for work, shopping, education, social media and/or entertainment.” (See Gartner Blog: What Is a Metaverse? And Should You Be Buying In?).

I completely understand that Metaverse is new and the future isn’t completely clear, but this prediction seems off to me.

What Is Metaverse?

Meta’s Horizontal Worlds is a software created virtual world that users can access using a Meta AR/VR headset. Meta provides basic tools to enable users to create an avatar, events, and content. And more advanced tools to create new worlds.

Their real future plans for metaverse is to create the platform for metaverses. In other words, it would provide the tools that would enable others to create their own metaverse and integration to be able to easily move between worlds.

Unlike the controlled and closed metaverses, this would be open to additional content and code. In other words, it is the Facebook business model applied to the virtual world. This is why Meta is throwing so much money into this project.

How Will Metaverse Be Used?

Over the past year, we have outlined several types of models (See Five Types of Metaverse Models), including:

public metaverse
private metaverse
enterprise metaverse
community metaverse
hybrid metaverse (a combination of public and private metaverses)

We also highlighted the strengths and weaknesses of each model.

The Future of Metaverse

We went through a scenario planning exercise looking at the different possible worlds to understand the future of metaverse. From unified communication, gaming, collaboration, retail, (See What Is The Future of Metaverse?).

While a unified communications metaverse model will likely gain some consumer and business traction due to hype. However, a model will not replace unified communication for the vast majority of commercial, education, or government organizations or consumers.

The cost of headsets for students or employee’s education and training is not more effective than larger high-resolution monitors for most learning. Also, people often find the wearing of special headsets tiresome and potentially disorienting.
It is hard enough to get computers for classroom learning. What teacher wants students flying around a virtual classroom as an avatar.

It will also not replace or subsume retail markets. That was tried in Second Life and other early metaverses. Further, many of the on-line retailers, such as Amazon, have such a strong hold on the market, it is unlikely to move to the metaverse. The primary retail markets will be avatars buying upgrades or NFTs to use in their world. Metaverse will not become a predominant retail outlet for the physical world.

Bottom Line

I think Gartner has it wrong with its prediction. Aragon Research’s prediction is as follows:

By 2026, Meta will gain 20% of the on-line gaming market, 10% of social media market and less than 2% of retail, communications, entertainment and education markets (70% probability).

The predominant model for metaverses will be public, private, and hybrid for gaming and social media. Gaming and game-based entertainment will make up 90% of the metaverse market through at least 2025 (70% probability). The adoption of community and enterprise model metaverse will remain minimal after an initial period of interest due to market hype.

This blog is part of the Business Transformation blog series by Aragon Research’s VP of Research, Betsy Burton.

Missed the previous installments? Catch up here:

Blog 1: A New Blog Series on Business Transformation

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Blog 2: What Are the Benefits of Supporting Business Architecture?

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Blog 3: How Do Business Architects Gain and Retain Management Support?

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Blog 4: How Do We Find and Recruit Great Business Architects?

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Blog 5: Is a Charter Necessary to Start a Business Architecture Discipline?

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Blog 6: Product Managers Can Make Great Business Architects

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Blog 7: 4 Necessary Steps to Successfully Start a Business Transformation Effort

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Blog 8: Developing an Executive Business Case Presentation for Business Transformation

Predicting The Future of Metaverse