(Updated - April 1, 2022 12:25 PM EDT)
A team of analysts at Citi, led by Ronit Ghose, believes that companies like Meta Platforms (NASDAQ:FB) are attacking a $8-$13 billion total addressable market (TAM).
In a near 200 pages report on Metaverse, Ghose sees this space combining the physical and digital worlds in an immersive manner, with many use cases, including gaming, commerce, art, media, advertising, smart manufacturing, health care, virtual communities, and social collaboration (including for enterprise and education).
The number of potential users ranges from 1 to 5 billion, according to Citi, depending on which type of definition is used (narrow vs broad).
Ghose believes that Metaverse will most likely be based around smartphones with a small portion of all users using virtual reality (VR) devices.
For Metaverse to be adopted widely, the world will need much better internet speeds and higher access to 5G technology. Citi expects only a quarter of the global population to have access to 5G by 2025.
The lags, packet drops, and network unreliability witnessed in today's world makes the current state of the infrastructure unsuitable for building an envisioned Metaverse experience, it is said in the report.
Analysts also see different types of metaverses being developed e.g. US/International vs China, tech vs business, centralized vs decentralized, etc.
Among those sectors and companies that are likely to benefit the most from Metaverse, Ghose mentions consumer hardware manufacturers that will act as portals and potential gatekeepers.
Citi also sees a big role for cryptocurrencies and decentralized finance (DeFi).
"Money in the Metaverse could exist in different forms, i.e., in-game tokens, stablecoins, central bank digital currencies (CBDCs), and cryptocurrencies. Current payment rails are usually domestic for real time and expensive cross-border payments making them an imperfect fit for a borderless global Metaverse ecosystem. We expect decentralized finance (DeFi) and existing traditional financial systems to coexist."
By Senad Karaahmetovic