The metaverse could contribute between $0.8tn and $1.4tn per year to Asia’s GDP by 2035 if investments in the technology are sustained in the next five to 10 years, according to new research by Deloitte.
In its new report, The metaverse in Asia – strategies for accelerating economic impact, Deloitte noted that awareness of the metaverse in Asia is high, and early metaverse platforms are already being used by millions of people in the region for gaming, socializing, creating digital twins, attending concerts, and purchasing items.
For example, it noted that the 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, it added.
Still, Deloitte mentioned that the metaverse will have a transformational impact on Asian economies but whether it will realize its full potential will depend on a wide set of socioeconomic factors and enablers that will vary across markets.
Asia is an interesting region to watch for metaverse developments. It dominates the hardware supply chain, and countries like South Korea have already developed a 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.
The largest economies in Southeast Asia, Indonesia, Thailand, and Vietnam, are also pioneering new business models especially among small and medium-sized enterprises and innovating with web3 and blockchain technologies.
Moreover, the region has rich and diverse cultural legacies to tap into to develop compelling content and experiences. Japan is also leveraging its heritage as a pioneer of the video game industry to create new metaverse industries.
“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 Duleesha Kulasooriya, managing director of Centre for the Edge at 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 Kulasooriya.
Singapore as metaverse hub
Deloitte’s analysis suggests that by 2035, the potential economic impact of the metaverse in Singapore could reach $9bn to $17bn a year, or 1.3-2.4% of the country’s GDP.
With a small population and few natural resources, Singapore’s transformation into a global economic and financial hub within five decades has been driven by political stability, robust regulatory frameworks, and a plug-and-play business environment that is open to investors. These stellar credentials have made Singapore a top pick for companies as a base for their metaverse operations in the region, Deloitte noted.
The key enablers for Singapore include its efforts to strengthen regulations for online safety and cryptocurrencies, which will improve social acceptance, creating a vibrant ecosystem for technology and digital content creation businesses alike, and developing a strong bench of international and local digital talent.
Key sectors in Singapore to watch out for in metaverse developments include healthcare, where hospitals are using immersive virtual technologies to enhance medical education and medical services and urban planning where Singapore was one of the first countries to implement a country-scale digital twin.
“Singapore can leverage its strong global reputation as a financial hub to be a key market that discovers ventures into the next internet, such as the metaverse. Early pivots can be to attract top metaverse companies and investors to Singapore,” said Michelle Khoo, director of Centre for the Edge at Deloitte Southeast Asia.
In September 2022, Singapore banking giant DBS teamed up with Sandbox to create an interactive metaverse experience that highlights the importance of building a more sustainable world. Under the partnership, it acquired a 3×3 plot of virtual real estate in the Sandbox metaverse.
DBS CEO Piyush Gupta said at the time that metaverse technology, while still evolving, could fundamentally change the way banks interact with customers and communities.