Rise of the Metaverse calls for crypto strategy in these sectors

SINGAPORE: The advent of the Metaverse will have a significant impact on the gaming, shopping and social media industries.

According to global management consultancy Roland Berger's "The Rise of Crypto Economy", cryptocurrency is here to stay. In fact, it will disrupt and improve almost every industry and sector of modern society.

Roland Berger has identified seven trends that will affect the crypto economy and give commercial opportunities, and one of these trends is the rise of the Metaverse.

"In the blended digital space, the Metaverse will open up new economic prospects. Gaming and entertainment, consumer goods and fashion, and social media are the top three industries that will require a crypto and Metaverse strategy to stay competitive," Roland Berger Southeast Asia managing partner Damien Dujacquier said.

CRYPTO GAMING INVESTMENTS ON THE RISE

Another upward trend that can be observed is in crypto gaming investments.

The amount of time users spend in the digital world has expanded dramatically during the last five years.

The digital products business, which includes in-game items, digital art, virtual real estate and vanity items, is booming.

Crypto gaming investments will account for 9 per cent of overall funding in the gaming sector by 2021. Moreover, this is projected to continue expanding in the future.

The gaming industry is quickly embracing cryptocurrency as a native currency, and non-fungible tokens (NFTs) are a great way to store digital products.

Traditional gaming firms are researching methods to incorporate technology and commercial prospects in the best possible way, alongside a new breed of crypto-based games, with a total market cap of USD 26 billion (RM109 billion) in March 2022.

CRYPTO FASHION & CONSUMER GOODS

In the Metaverse, there is a crypto opportunity for consumer goods and fashion.

Consumers are increasingly adopting digital things in the form of NFTs. Digital products have also been created and sold by high-end consumer companies such as Dolce & Gabbana and Rolls-Royce.

As the native currency of the digital space and with the ability to create NFTs, crypto is set to further accelerate in development.

"Businesses not only need to be prepared for significant revenue streams in the Metaverse but also a growing expectation of being present in the Metaverse," Dujacquier added.

With IT giant Facebook declaring its strategic repositioning and rebranding to become a dominant Metaverse player, Outlier Ventures and others working on the Open Metaverse OS, the race between a centralised and decentralised Metaverse has already begun.

According to Roland Berger's publication, the crypto market is worth over USD 2 trillion (RM8.4 trillion) and has over 12,000 crypto projects as of January 2022.

Feroz Sanaulla, Roland Berger's partner and global co-head of the crypto economy team, said that the corporate adoption of crypto economy-related operations is rapidly increasing, and this is merely the start of what lies ahead.

"Governments, investment funds and companies need to develop their crypto-economy strategy now to ensure they capitalise on the opportunities.

"We will see a lot of Uber-moments for traditional companies – but also for today's innovators," Sanaulla explained.

As of 2021, the Venture Capital industry had invested USD 25 billion (RM109 billion) in crypto investments, a new high.

According to a recent study, the number of crypto unicorn firms surged by 491 per cent in 2021, and mergers and acquisitions (M&A) activity in the sector is on the rise, with around 200 transactions last year.

"Roland Berger has an international team of strategy consultants with in-depth technical and commercial know-how, as well as cooperation with many leading crypto ecosystem players, to ensure we can holistically assist our clients in defining their positioning in the crypto economy," said Pierre Samaties, partner and global co-head of the crypto economy team.