Despite rocky economic conditions and some high-profile bad press surrounding the metaverse — an immersive, shared virtual environment that people access via the Internet — investors are feeling optimistic about what some are calling the future of the web.
Venture capital and institutional equity investments in the metaverse currently make up nearly half of investor assets, with that expected to increase over the next five years, according to a KPMG survey.
The report was based on insights from 302 institutional investors, including commercial banks and funds, as well as 103 venture capital firms/funds, and found a full three-quarters of investors plan to maintain or increase their metaverse investments over the next five years.
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Customer interest in the emerging technology appears to be a core driver in metaverse investment, cited by 64% of respondents, followed by a desire to address emerging technologies and potential to reach new audiences and customers.
Venture capital funds seem particularly eager to invest in the metaverse, with nearly three-quarters of respondents citing emerging technology investment as the reason to increase or maintain their bet on the metaverse over the next five years.
Regulation, Privacy Issues Concern Metaverse Investors
While there is a general sense of optimism about the metaverse, seven out of 10 investors surveyed said they have concerns about a variety of factors, from regulation and privacy to concerns about adoption levels.
Anu Puvvada, KPMG studio leader and interim COE lead on metaverse, explained that while it is yet to be seen which metaverse platforms and capabilities will have the most sticking power, approximately 90% of VC and institutional investors predict that the metaverse is the next phase of the internet.
“It’s clear that investors are looking beyond current macroeconomic factors and consumer adoption rates and envisioning a future where the metaverse is used for workshops, training and learning experiences,” she said.
Puvvada noted that this confidence, however, depends on factors such as the prospects of improved interoperability across metaverse platforms, wider workplace adoption and more affordable hardware options.
Because it’s uncertain which products and platforms will gain widespread traction, early investment keeps metaverse investors in the game regardless of how individual technologies develop, she added.
About a third (36%) of investors surveyed said they have missed out on profitable opportunities from not investing or investing too little in metaverse technologies to date.
Diversity, Equity and Inclusion is a Priority for Metaverse Investors
Diversity, equity and inclusion (DEI) in the metaverse is a key concern for investors‘ minds, according to the survey.
With the metaverse in its nascent stages, there is an opportunity to build a more inclusive culture from the ground up. Affordability, avatar customization and control are all priorities.
Thirty-eight percent of investors cited providing more access to affordable metaverse technologies as key to creating an inclusive metaverse experience.
The second and third most important factors for ensuring DEI in the metaverse are the ability to customize avatars to represent people of all backgrounds (34%) and to establish acceptable forms of governance through a combination of codified rules and social norms (33%).
Related: Women Are Key Metaverse Users, But Men Dominate Jobs Shaping It
“To create a just future with these technologies, we need to activate new tactics to increase broad adoption and lower costs,” Puvvada said. “Early education, specialized training and advanced skills will play pivotal roles in promoting metaverse education and user familiarity.”
She pointed out that some “codified rules and social norms” that can support DEI in the metaverse would include ensuring user authenticity and enforcing zero-tolerance policies when it comes to discrimination and offensive language.
Nearly seven in 10 organizations say they plan to do business in the metaverse within the next three years, according to a December Tenable survey of 1,500 professionals representing roles in cybersecurity, DevOps and IT engineering.
About the authorNathan Eddy is a freelance writer for ITPro Today. He has written for Popular Mechanics, Sales & Marketing Management Magazine, FierceMarkets, and CRN, among others. In 2012 he made his first documentary, The Absent Column. He currently lives in Berlin.