KPMG Survey: Investors are Still Bullish About the Metaverse
A new KPMG survey shows that investors remain bullish about the metaverse.
The report indicates most venture capital and institutional investors are planning to increase their investments in the metaverse in the next five years.
According to the report, more than 90% of investors are predicting the metaverse will be the next phase of the internet. Investors are seeing a future where the technology will be increasingly used in applications such as training, learning experiences, and work meetings.
The KPMG survey markedly differs from a recent Game Developers Conference poll where 45% of the respondents consisting of game developers had a negative perception of the metaverse.
The KPMG report states that while broad-based metaverse adoption could be years away, many investors have their gaze set on the metaverse and are playing the long game in their investment strategy.
At this juncture in the industry, it is still not apparent what metaverse capabilities and platforms will be for the long haul.
The KPMG report states that a good portion of investor confidence in the metaverse is anchored on the prospects it offers for interoperability across various platforms, along with more affordable hardware options, and broader adoption of the technology in the workplace.
Over half of the investors surveyed in the report said they saw benefits in investing early in the technology experiences and technologies continue evolving. Venture capitalists, at 63%, see the most benefits. Some 36% of the investors surveyed admitted to missing windfall opportunities from failing to invest in the metaverse or investing too little in these technologies.
KPMG U.S. studio leader for metaverse center of excellence Anu Puvvada said institutional investors and venture capitalists are driven by client demand to look beyond the current economic headwinds and lower consumer adoption rates. Puvvada said KPMG is confident in the potential of the metaverse to transform how we work and engage with one another.
Roughly half of the investors surveyed stated that a single metaverse investment averaged between $1 million and $9.9 million. Approximately 70% of the investors said they are expecting the sizes of individual investments to increase over the long haul.
The KPMG survey also had insights from 302 institutional investors such as funds and commercial banks as well as 103 venture capital funds/firms. Those surveyed had to be people with decision-making responsibility for investment strategy such as directors and above. The survey only covered firms that manage at least $500 million in assets and are headquartered in the U.S.
The Investment Drivers
The investors surveyed saw great benefits in making early investments. This was, perhaps, a result of 36% of those surveyed stating they missed out on windfall opportunities from failing to invest or investing too little in metaverse tech.
The main factor driving investors to ramp up or maintain their metaverse investment strategies was client interest (64%). 59% of investors surveyed were driven by efforts to explore opportunities in emerging technologies while 58% were motivated by an interest in reaching new clients and audiences.
Venture capital firms investing in the metaverse are especially interested in keeping in step with emerging technology, an interest cited by 72% of investors as the motivation to increase or maintain their investments in the metaverse in the next five years.
Diversity and Inclusion (DEI)
Diversity and Inclusion (DEI) considerations are also at the top of investors’ minds. Some 38% of investors surveyed cited the need to provide more access to affordable metaverse tech as crucial in building an inclusive metaverse experience.
Some 34% cited the inclusion of the ability to customize avatars to factor in people of all backgrounds as an important factor in DEI while 33% cited the establishment of acceptable forms of governance through social norms and encoded rules as an important factor for creating DEI in the metaverse.
Despite the bullish attitude to the metaverse, investors still expressed some concerns. The recent negative media coverage of the industry has driven a more cautious approach. The majority of investors, mainly commercial investors, cited news coverage on the metaverse as creating a medium to high impact on investment decisions.
KPMG divisions in the U.S. and Canada have now partnered to launch a metaverse collaboration hub where employees, clients, and communities will be able to connect and engage, as part of the company’s strategic innovation roadmap.
KPMG has also instituted a dedicated team that will assist clients in developing and executing their own metaverse strategies.