Morgan Stanley Eyes A Multi-Trillion Dollar Metaverse Market

Investment banks are talking about the metaverse, and that’s good news for the tech companies that make the virtual world come to life.

Wall Street behemoth Morgan Stanley has joined the conversation, predicting in a note to investors that the Chinese market alone could reach $8 trillion or more. Left out of the tally were non-fungible tokens (NFTs) as well as virtual concerts and digital collectibles. At first, bank analysts say, the total addressable market (TAM) will be $4 trillion, while people get used to substituting virtual experiences for live ones. When previously hands-on, in-person activities such as real estate showings and vehicle test-drives make their metaverse debuts, analysts predict the market may expand.

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Seen as the replacement for the mobile internet, immersive three-dimensional experiences are expected to transcend today’s internet activity. Importantly, people are primed for the next tech generation, already spending huge periods of their days online. “We expect the metaverse TAM to be expansive and go beyond the current online consumption market, which is mainly dominated by e-commerce and online entertainment spending,” Morgan Stanley’s note said.

For investors, the first foray will be through virtual reality headsets, backing hardware companies such as Goertek, Sunny, and Luxshare, and semiconductor makers such as MediaTek, Will, and TSMC.

Full-on adoption of the metaverse by the masses won’t happen quickly, though, and the jury’s out on whether it ever will. Technological and regulatory obstacles could slow its pace, as could consumer hesitancy about the radically new technology. In China, the government’s increasing focus on the addiction of children to technology, personal information protection, data security, and the openness of the ecosystem could also cause delays.