Leading into the Metaverse

If you still think that the metaverse is just about gaming and cool glasses, keep reading. Odds are that your competitors are already acting on opportunities that you aren’t even aware of.

The journey to the mainstream adoption of the metaverse won’t be linear or straightforward. We don’t anticipate that fully realized versions of these virtual-enabled worlds will come to the fore for at least a decade, and on the way there, we will see the launch and mainstreaming of many exciting and sophisticated technology advancements, such as AI Chatbots.

Whilst we might be at an early stage in understanding the opportunity the metaverse poses, we know that business leaders are already having strategic discussions with their boards on the next tech leap and the implications that has on their digital transformation efforts today. If organizations don’t act now, or at least start having these conversations, they may find themselves operating in a world created by, and for, someone else.

This series explores the ways businesses are preparing for these opportunities, now and for the long term. Our work with leading-edge clients means we’re able to unearth stories and leadership strategies in this uncharted territory. Here, we share those learnings with you.

what is metaverse

of CEOs from across industries say that Web 3.0 and/or metaverse plans will be in their business strategies within the next three years.

Source: Russell Reynolds Associates’ Global Leadership Monitor Pulse, October 2022, n=229 CEOs

What is the metaverse?

Web3.0, including metaverse experiences, will eventually replace the internet experience that we know of today. Rather than viewing digital content, people will live and be present within it. To capture the value of the metaverse, enterprises are implementing a new digital strategy.

Facebook, which changed its name to Meta Platforms and shifted its focus to the metaverse in 2021, invested over $10 billion in its Reality Labs operation in 2022 alone.

Venture capital and private equity funds poured almost $13 billion into metaverse-related investments in 2021.*

Broadly speaking, the technologies companies refer to when they talk about “the metaverse” can include virtual reality—characterized by persistent virtual worlds (VR) that continue to exist even when you're not playing—as well as an augmented reality (AR) that combines aspects of the digital and physical worlds. However, it doesn't require that those spaces be exclusively accessed via VR or AR. Virtual worlds that can be accessed through PCs, game consoles, and even phones have started referring to themselves as “the metaverse.”

The new digital experience will create new levels of social connectedness and change how people entertain, socialize, shop, learn, work, and collaborate, regardless of the location of people.

On the long, uncharted road to this technology leap known as Web3.0, we anticipate the debuts of many new technologies, such as AI and Machine Learning, that will dominate the conversation of the day, but are ultimately all building up to the way that we experience connectivity online in the future. Our role as leadership advisors is to ensure our clients stay up to date on the implications of the latest advancements in their leadership choices, while making sure that they keep the potential of the long game in sight and in the discussion. The bottom line is that all of these advancements have significant implications for how businesses transform their digital capabilities to ensure they are ready for a new digital era—and not caught on the back foot.

Jemi Crookes, Washington DC

Metaverse today

A virtual space (consisting of virtual worlds) that people can visit to experience virtual activities
Remains difficult to define

Metaverse tomorrow

A highly-immersive future environment to drive a shared sense of presence, interaction, and continuity across multiple spheres of work and life

Metaverse & Web3.0 longer-term

A persistent identity (or avatar) that is portable across multiple mixed-reality 'worlds', supported by a fully-decentralized business model with a trusted exchange of value that gives full power to the individual user or entity

Right now, it’s difficult to imagine how all these experiences will play out in the metaverse. The truth is, nobody knows exactly what companies will uncover as they design and enhance the metaverse.

What we do know is that the metaverse represents a massive cross-industry, $120 billion opportunity that will revolutionize how people interact. As these strategies build and evolve, we will help you keep a true and continual pulse on these innovations and advancements, as well as the impact they will have on how companies are led.

How is the market evolving?

Rather than a single shared virtual space, the current iteration of the metaverse is shaping up to be more of a multiverse: rather, a collection of metaverses with limited interoperability as companies jockey for top positions. Tech giants are building technology related to interacting with virtual worlds—but they aren’t the only ones. In fact, more than 500 companies are building their own metaverse.‍

What's the opportunity?

>$

Billion

invested into the metaverse space in 2022—more than double the amount invested in 2021

~$

Trillion

Metaverse value estimated reach by 2030

How are consumers and brands reacting?

%

of consumers are excited about transitioning their everyday activities to the metaverse

%

of metaverse-aware companies say they are adopters

Source: Value creation in the metaverse: The real business of the virtual world, McKinsey & Company, June 2022

Still think the metaverse is a buzzword?

Read our article on the 5 misconceptions about how leaders are preparing for the next tech leap.

Find out more

Authors

Leah Christianson is a member of Russell Reynolds Associates’ Center for Leadership Insight. She is based in San Francisco.
Jemi Crookes leads Russell Reynolds Associates’ Technology Knowledge team. She is based in Washington D.C.

Leading into the Metaverse

>$

~$

%

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Still think the metaverse is a buzzword?

Read our article on the 5 misconceptions about how leaders are preparing for the next tech leap.

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