Technology, Media & Telecommunications leaders playing the long game on the metaverse

In 2022, the “metaverse” emerged as a difficult buzzword to ignore. After virtual meetings, concerts, conferences, and even sporting events became commonplace during the COVID-19 pandemic, tech companies turned their sights to a new frontier – the metaverse. And it didn’t take long for businesses, news outlets and investors to take notice.

Now in an environment of higher interest rates, recession fears, and more in-person interaction, where do TMT companies stand on the metaverse?

In support of KPMG’s Metaverse Survey, “Want to win in the metaverse? Think internal first,” KPMG commissioned Forrester Consulting to conduct a study of TMT leaders. The survey revealed that while a majority of TMT leaders believe the metaverse will have a major impact over the next decade, they are not bolting to invest in it yet. In fact, few TMT leaders are currently investing more than 5% of their total technology budget on the metaverse.

However, TMT leaders’ metaverse investment strategies shift looking through a long-term lens. Over the next five to 10 years, 50% respondents plan to increase their investments in the metaverse, with 21% indicating of plans to put 10% or more of their total budget in the metaverse within the next two to four years.

“The ultimate vision of the metaverse may not be here today, or tomorrow, or even next year, but it is poised to have a profound impact on the TMT sector,” said KPMG Global and U.S. TMT Leader Mark Gibson. “There’s a price for investing heavily in an unknown future, and a price for doing nothing. Our survey identifies plenty of gaps that could leave metaverse laggards trailing their more ambitious competitors as the metaverse market evolves and matures.”

Additional findings include:

• Six in ten TMT leaders believe the metaverse will have a huge impact on consumers and business but believe it needs further development.
• Nearly 75% of TMT companies reported putting less than 5% of their tech budget towards the metaverse.
• Over the next five to 10 years however, 50% respondents plan to increase their investments in the metaverse, with 21% indicating of plans to put 10% or more of their total budget in the metaverse.
  
• Over the next two to four years, 43% of respondents plan to increase their investments in the metaverse, with 21% indicating of plans to put 10% or more of their total budget in the metaverse.
• Most of the survey respondents do not believe that the main metaverse use cases are likely to go mainstream for at least four years – and many feel they may take as much as 10 years or longer.
• 51% of TMT leaders noted a lack of proper technology as a primary barrier to fostering more committed metaverse adoption/planning.
• 81% of TMT companies see marketing, sales, and branding as high-value potential use cases for the metaverse.

While TMT leaders remain cautious about investing in the metaverse now, their outlook over the next few years is not dissimilar from VC and institutional investors surveyed in KPMG’s metaverse investors perspectives survey. In that survey, a majority of venture capital and institutional investors also indicated plans to increase their metaverse investments over the next five years. That survey also showed however that more than half of investors see a benefit in early investment in metaverse technologies, particularly venture capitalists (63%), with 36% of investors indicating that they have already missed windfall opportunities from not investing or investing too little in metaverse technology.

While remaining on the sidelines might be the right decision for some TMT companies at this current juncture, how and when is the right time to act? KPMG’s “Want to win in the metaverse? Think internal first,” will reveal a few key indicators, launching March 10.