The Metaverse Could Pump $1.4 Trillion into Asian Economies Over the Next Decade
The metaverse is still in its infancy but continued investments in this new computing frontier and the ecosystem around it in the next decade will have a considerable impact on Asian economies.
By 2035, the investment is expected to add between $0.8 trillion to $1.4 trillion to these economies should the current pace be sustained for the next five to ten years, according to a Deloitte report.
The Deloitte report is titled ‘The Metaverse in Asia – strategies for accelerating economic impact’. The report acknowledges that metaverse awareness is currently high in Asia and that the earlier metaverse platforms already have a user base running into millions in Asia. They are using the metaverse for socializing, gaming, buying items, attending virtual concerts, and creating digital twins. The South Korean app Zepeto, for instance, already has over 300 million users globally. It will, however, take years before a fully immersive metaverse emerges that simultaneously offers a seamless and real-time rendering of visually rich worlds to millions of users.
The Deloitte report, however, still acknowledges that the impact of the metaverse on Asian economies will be transformational. Its ability to hit its full potential will be dependent on various socioeconomic factors and enablers that will vary depending on the nature of the local markets.
Asia is an important market for the evolution of the metaverse. The metaverse supply chain is currently dominated by Asian countries like China and Taiwan. Countries such as South Korea are already at an advanced stage in laying down the foundations of the metaverse and already have a blueprint geared at fostering the metaverse industry in the country.
Some Asian countries such as South Korea, Singapore, India, and Hong Kong are leading on the regulatory front by putting in place regulatory safeguards and building a positive environment for metaverse businesses.
Some of the leading Southeast Asian economies, including Thailand, Indonesia, and Vietnam are pioneering new blockchain and Web3 business models, particularly for the small and medium-sized enterprises sector.
Asian countries also possess a rich and diverse cultural heritage that they can tap into to create compelling web3 content and experiences. Japan has long leveraged this in its video gaming industry over the decades and it is looking forward to building on that legacy for the metaverse age.
The Deloitte report describes the metaverse as an “inevitable” future hence the need by countries in the region to build technology stacks, human capital as well as a regulatory framework that will enable them to realize the trillion-dollar potential of the technology in Asia that is guaranteed to have a positive impact on wide-ranging industries and economic activities.
The report says that the success of the metaverse in Asia will not only rely on governmental initiatives but also on all the actors in the ecosystem. Although the metaverse is still in its infancy, Deloitte says that businesses and players should use this time to experiment and “find their edge” to enable them to identify opportunities that will allow them to scale up these edges.
Singapore to Play a Pivotal Role in the Evolution of the Metaverse in Asia
According to Deloitte’s analysis, Singapore will be a major driver of the Asian metaverse. The economic potential of the Singaporean metaverse industry could hit $9 billion to $17 billion a year by 2035, accounting for 1.3% to 2.4% of the country’s GDP.
Compared to other countries across Asia, Singapore has a small population and very little in terms of natural resources and the country has catapulted itself to one of the top performers through political stability and a progressive regulatory environment that is favorable to business and FDI, making it a very attractive investment destination. This has not gone unnoticed by top Web3 companies from across Asia and the world, many of which have used Singapore as a basecamp for their metaverse operations.
One of the key factors attracting metaverse companies to Singapore has been the country’s robust efforts aimed at strengthening regulations for cryptocurrencies and online safety. Over the long haul, such efforts will boost social acceptance and create a vibrant ecosystem that will favor the diffusion of technology and digital content creation businesses. Such bold and pioneering regulation enables Singapore to create a robust pool of international and local digital talent, thereby taking some of the shine off Silicon Valley.
The Deloitte report states that the main Singaporean sectors showing good prospects as far as metaverse developments go are healthcare and urban planning. Singaporean hospitals are already implementing immersive virtual technologies in enhancing medical education and medical services. In urban planning, Singapore is already one of the world leaders in the implementation of country-scale or city-scale digital twins.
According to Deloitte, Singapore is in a good position to leverage its global reputation as a financial hub to evolve into a major market that serves as a launchpad for new ventures into the metaverse. Some of the country’s early pivots could include attracting top metaverse companies as well as investors into the country.
Singapore’s banking giant DBS partnered with Sandbox in September 2022 to build an interactive metaverse experience that showcases the benefits of building a more sustainable world. The partnership involved DBS acquiring a 3×3 plot in the decentralized gaming virtual world. At the time of the partnership, DBS said it saw the metaverse as a technology capable of fundamentally changing how banks interact with both their customers and communities.