Deloitte analysis: With sustained investment, the GDP impact of the metaverse on Asian economies could reach US$1.4 trillion per year by 2035
A recent analysis performed by Deloitte estimated that the impact of the metaverse to GDP in Asia could be between US$0.8 and 1.4 trillion per year by 2035, which is roughly 1.3 to 2.4 percent of overall GDP. This may come to fruition over the long term should there be sustained technology investments made in the next five to ten years. How much is actually realised, and how quickly, depends on the unique strategies the underlying economies may take to accelerate economic benefits of the metaverse.
This analysis, consolidated into a report titled “The metaverse in Asia – Strategies for accelerating economic impact”, showcases the potential impact of the metaverse in 12 Asian economies (Hong Kong, India, Indonesia, Japan, Mainland China, Pakistan, the Philippines, Singapore, South Korea, Taiwan, Thailand, and Vietnam), and highlights the strategies that these economies are adopting to reap the rewards of the metaverse. Each economy featured in this report is approaching the metaverse from its own unique direction, which makes the region an interesting one to watch.
Early metaverse platforms are already being used by millions in Asia
Awareness of the metaverse in Asia is high, and early metaverse platforms are already being used by millions of people in the region – gaming, socialising, creating digital twins, attending concerts and purchasing items. For example, South Korean app Zepeto has over 300 million registered users worldwide. However, a fully immersive metaverse with smooth real-time rendering of visually rich worlds for millions of simultaneous users is still years away.
The metaverse will have a transformational impact on Asian economies
While early estimates suggest that the potential growth and contribution of the metaverse can be significant globally, the timing and size of the economic impact is challenging to forecast and will depend on a wide set of socioeconomic factors and enablers.
Nevertheless, the metaverse is envisioned to create new market, business and employment opportunities as well as improve the way we work, consume and collaborate. If these developments are fully scaled, it will be transformational for the more than 4 billion people who live, work, and play in the region.
Asia is an interesting region to watch for metaverse developments
From software to hardware, regulators to entrepreneurs, cultural to digital talent, Asian economies are leaning in from many directions in all things metaverse. Some key highlights of the region include:
- Asia dominates the hardware supply chain in terms of raw materials and the manufacture of electronics and semiconductors.
- The region has over 1 billion mobile gamers, the biggest mobile player base worldwide.
- South Korea was the first major economy to articulate a comprehensive blueprint to foster its metaverse industry.
- On the regulatory front, Singapore, Hong Kong, India and others are creating positive business environments and instituting clear regulatory guardrails, ensuring businesses and consumers alike can engage with the metaverse safely.
- Indonesia, Thailand and Vietnam are pioneering new business models especially among small- and medium-sized enterprises and innovating with web3 and blockchain technologies.
- The region has rich and diverse cultural legacies to tap into to develop compelling content and experiences. For example, Japan is leveraging its heritage as a pioneer of the video game industry to create new metaverse industries.
- India, the Philippines and Pakistan are key sources of global tech talent.
“The metaverse is inevitable. Developing the technology stacks, human capital and regulatory frameworks to realise Asia’s trillion-dollar metaverse potential will benefit a wide range of industries and economic activities,” said Mr Duleesha KULASOORIYA, Managing Director, Center for the Edge, Deloitte Southeast Asia.
“The successful future of the metaverse calls for action not just by governments, but all ecosystem actors. While the metaverse is still in its early forms, it is now a good time for businesses and players to experiment, find their edge in the metaverse, and identify opportunities to scale these edges,” added Duleesha.
The Thailand story
Deloitte’s analysis suggests that the potential 2035 economic impact of the metaverse in Thailand is US$11 to 21 billion per year, or 1.3 to 2.4 percent of overall GDP.
Thailand is one to watch with multiple metaverse projects sprouting from its entrepreneurial business sector. Their willingness to take risks is due in no small part to ultra-connected Thai consumers, who top global rankings for weekly online purchases, cryptocurrency ownership and mobile banking app usage. The country already has a strong technological foundation, with one of the fastest fixed broadband speeds in the world.
Key enablers for Thailand include tapping on their strong entrepreneurial culture, strengthening security and privacy frameworks, and ensuring accessibility by improving connectivity outside of the capital.
Key sectors to watch are:
- Tourism: With a yearly contribution of around 18% to GDP prior to the pandemic, leveraging immersive experiences in the metaverse could strengthen its appeal to a greater number of international tourists. For example, The Tourism Authority of Thailand has begun experimenting in the space with the release of the “Amazing Thailand Metaverse: Amazing Durian” virtual travel experience.
- Creative services: Thailand is a major creative goods exporter. Demonstrating the country’s technological capabilities, a realistic AI-human influencer ‘AI-Ailynn’ was recently developed. Thailand has also inventively applied tokenisation to attract new sources of funding for creative projects like movies.
“The metaverse presents a new platform to generate value from Thailand’s combination of creative, entrepreneurial and technological talents. Businesses in Thailand are in an ideal position to leverage unique opportunities that the metaverse will provide, leading to unique customer experiences, benefits to the organization, economy and society as a whole,” said Narain Chutijirawong, Executive Director of Clients & Markets, Deloitte Thailand.