With advancements in virtual and augmented reality technologies, as well as the growing popularity of online gaming and social media platforms, the concept of the metaverse has gained increasing attention as a potential next step in the evolution of the internet.
The metaverse could add around $760 billion, or around 2.4% to US annual gross domestic product (GDP) by 2025, Reuters reported on May 10, citing a study commissioned by Meta Platforms (NASDAQ: META) from Deloitte.
The report states that the metaverse’s potential contributions to the US economy may come from its wide use cases in the medical, manufacturing, entertainment, and defense sectors. Meta Platforms rebranded from Facebook in 2021 to focus on developing metaverse products and technologies in hopes that this nascent technology would eventually replace mobile as the biggest computing platform.
While its concept is still loosely defined, the metaverse is typically described as a virtual shared space built on augmented and virtual reality technologies that enable users to interact with each other and digital objects in real-time using avatars or other representations of themselves.
Meta committed to metaverse goals despite losses
So far, Meta has failed to win significant trust from investors when it comes to its metaverse bets as they voice concerns about potential returns amid a period of a significant slowdown in the advertising sector, which continues to pressure Meta’s revenue growth.
Meta’s latest earnings report showed that its metaverse division, Reality Labs, lost almost $4 billion in the three-month period and $13.7 billion in 2022. However, the company’s CEO Mark Zuckerberg reiterated Meta’s commitment to its metaverse vision, suggesting Reality Labs’ operational losses could increase even further in the short term.
Metaverse’s potential GDP contributions in EU and Canada
In another report, Meta said the European Union (EU) could receive a boost of around 489 billion euros ($538.29 billion) in annual GDP by 2035 from the metaverse. This figure represents roughly 1.3% – 2.4% of the EU’s total GDP.
Similarly, the metaverse could add C$45.3 billion ($33.88 billion) and C$85.5 billion to Canada’s annual GDP by 2035, according to the UK audit firm Deloitte.
The regional metaverse estimates come in the wake of a global economic impact report that Meta delegated to consulting company Analysis Group in 2022. As per the report, metaverse adoption could contribute more than $3 trillion by 2031.
