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exist Stanley Kubrick’s Ending 2001: A Space Odyssey, the Child of the Star appears. From the depths of space, the nascent Superman gazes at Earth, to which the blue planet is just one possible world in an infinite universe. This iconic scene perfectly depicts what’s going on in human civilization right now.
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Every day for the past two years—since the start of the COVID-19 pandemic—people were born with a very different view of reality than we do. I call them Generation W – “Double You” – because from the moment they are born, they have a “dual” identity, one physical and one digital. Soon, all global industries and markets will be redesigned to suit their specific preferences. Businesses must be flexible, because the key value of Gen W will be not just the free choice of goods and services, but the instant transition between different lifestyles—in fact, between worlds.
The foundations of the W economy have been laid: by the end of 2021, the market for the rapid creation of virtual worlds will be worth $500 billion over the next few years. Today, the largest segment of this market, accounting for 40.2% or approximately $201 billion, is gaming, both software and hardware. It also includes virtual goods (10.8% or $54 billion), non-fungible tokens or NFTs (8.2% or $41 billion), and augmented, virtual and mixed reality (AR/VR/MR) technologies (5.6% or $28 billion) USD). More than one third (35.2% or $176 billion) of the market consists of other services related to the development of the Metaverse. This is where the strongest driver of future exponential growth lies.
However, experts’ broad forecasts of relative growth in the various parts of the W economy may vary, but one thing is indisputable: the balance will inevitably shift in favor of the metaverse. By the end of the decade, sales of virtual world-related services and virtual goods will grow faster than all other sectors, capturing 82% of the total market share by 2030. Generation W will drive this leap.
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How will the behavioral patterns and values of people who have grown accustomed to exist in both digital and physical environments set a new economic paradigm? I believe the answer lies at the interface between information technology and marketing – in custom logic. From the outset, computer software, and subsequently web editors, allowed a wide variety of settings to choose from – functions, plug-ins, and filters. Back at the end of the last century, according to leading new media theorist Lev Manovich, this principle applies to the entire field of communication, including B2C interactions. Just as users can optimize software for their needs or build avatars in a computer game, they can receive personalized goods and services, create objects from modules, and use personal recommendation systems.
But improvements in targeting algorithms and customization of consumer products are only spin-offs of broader cultural and civilizational shifts, driven by the diversity of social networks. Zoomers are constantly customizing their identities, adding more details, specs and settings. They compile this identity from an extensive catalog, starting with basic menu choices like origin, gender and social status, before moving on to other options like vegan, K-Pop fan or life coach. I believe Gen W will customize reality in a similar way.
The ability to customize your own environment, simulate your living space, and enjoy the limitless freedom to choose from many different worlds are fundamental Gen W values. The platform to fulfill this need will be provided by the Metaverse. Virtual cities, offices and entertainment centers superimposed on the physical world, as well as physical reality augmented by digital objects and interfaces, will be connected via a 3D Internet network to provide an unprecedented immersive experience. By 2030, they will create a market worth as much as $5 trillion.
Not only will the Metaverse forget classic marketing tactics, it will also eliminate the concept of “consumer behavior.” Gen W won’t buy and spend in the traditional sense: whatever they call it, they’ll pay Yes– Pay to continue to exist in one or more preferred universes. Paid subscriptions and game monetization services today are just a vague outline of the business models that will emerge in the metaeconomics of the future.
Related: Virtual Worlds, Real Impact: Integrating Sustainability into the Metaverse
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Clearly, working with Generation W first requires developing technology for engagement and retention. Users will evaluate the quality of digital products directly from within them. The competition will not be between physical and digital realities, but between multiple hybrids, fusions and hybrid environments. The global AR/VR/MR technology market is expected to reach USD 250 billion by 2028, while the availability and convenience of the “gateway” into Metaverse will also be enhanced.
The virtual world is more of a way of life than a way of life: the human avatar market will be close to $530 billion by 2030, with NFTs and digital art worth over $200 billion and digital fashion worth $55 billion. Of course, the gaming space will also expand significantly—to nearly $550 billion. But it would undergo a structural change and find itself stuffed into Metaverse and Web3 like a Russian doll. Generation W will communicate, work, learn, rest, travel, and love in the digital spaces that information technology companies and tech startups have modeled for them, while seeing it as their own, as customized and expanded personalization will enable Each participant is a “co-author” of the new virtual environment – a literal creator of their own universe.
With a solid understanding of these trends, I don’t think global investment bank Citi’s forecast of 5 billion Metaverse users by the end of the century is too optimistic. After all, after creating their own universes, Generation W didn’t want to give them up. And by custom logic, they will be prepared to invest in maintaining and developing these universes. Questions of “real” cryptocurrencies, digital assets, virtual reality, products and services will lose any meaning. Human civilization will enter the metaverse, and global industries and markets will be integrated into metaeconomics through ready-made modules.
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