Metaverse could contribute $15B to GCC economies by 2030: Report
The metaverse has the potential to transform key sectors in the Middle East, such as travel and tourism, financial services, and real estate, according to a report by Strategy&, part of the PwC network.
The metaverse has the potential to transform key sectors in the Middle East, particularly GCC (Gulf Cooperation Council). It could contribute close to $15 billion to GCC economies by 2030, says a report by Strategy&, part of the PwC network.
The metaverse is a convergence of technologies that allows groups of users to experience a simulated world together. Although it is at a nascent stage—with underlying structures still being developed—over the past year, the metaverse’s ability to change the way we look at the world and use the internet has come to the fore.
The metaverse has seen substantial investment by corporates, startups, and investors. The total value of the metaverse worldwide is expected to touch $800 billion by 2024. The GCC countries, especially UAE and Saudi Arabia, are active participants in this space, according to the report titled ‘A Middle East perspective on the metaverse’.
Middle East’s metaverse strategy
Dubai, which aims to become a leading global metaverse economy, formally launched its metaverse strategy in July 2022. This is expected to add over $4 billion to the economy of Dubai and create over 40,000 new jobs in five years.
The UAE has established the Middle East’s first metaverse incubator to develop early-stage metaverse and Web3 solutions.
The metaverse is also used to develop the $500-billion city of Neom in Saudi Arabia by providing construction workers, engineers, architects, designers and others with data and ways to collaborate and customise aspects of the project.
Source: Strategy&
Image credit: Nihar Apte
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Key sectors where metaverse is seeing tailwinds
Travel and tourism
The report states that the travel and tourism sector has the potential to reap maximum gains from the metaverse—it is estimated to garner over $3.3 billion, throughout GCC, by 2030.
Expanding travel and tourism opportunities is an important part of Saudi Arabia’s Vision 2030 economic diversification initiative. The country aims to attract 100 million tourists (foreign and domestic) a year by 2030.
According to the report, the metaverse, which is projected to contribute $7.6 billion to the Saudi economy, can aid in the Vision 2030 goal of attracting foreign direct investment of SAR388 billion ($103.5 billion) annually by 2030.
Experience, which is something most travellers crave, is the core promise of the metaverse.
Students, historians, and tourists from around the world could experience the historic city of AlUla, home to the country’s first UNESCO World Heritage Site, via the metaverse, states the report.
Qiddiya is planned to be the world’s largest entertainment city, almost three times the size of Walt Disney World in the United States. It could attract nearly double its annual goal of 14 million visitors by offering immersive entertainment and leisure facilities, which combine extended reality and the metaverse for participation in live events.
Financial services
The metaverse can create a value of $1.8 billion in the region’s financial sector.
With the Central Bank of the UAE planning to introduce its digital currency within three years, the metaverse can play a significant role in future.
“The growth of fintech will require blockchain technology and crypto currencies, central to metaverse transactions, which can enable innovation in lending (including crowdsourcing) and secure payment systems,” states the report.
Commercial Bank International has created a personalised banking experience, enabled by the metaverse, with its first virtual banking location. Other banks may follow suit.
Real estate
Metaverse in real estate can add $1 billion to the GCC region by 2030, says the report.
Its possibilities in Neom—the futuristic Red Sea city in northwest Saudi Arabia—are immense. Neom is already a huge fixture on the global real estate market; 41% of respondents in a recent survey called it the “world’s most attractive giga project” (a project exceeding $10 billion). The metaverse is perfectly suited to enhance the project and redefine the experiences it offers, says the report.
Towards value creation
The Middle East has certainly made a start in metaverse adoption but there is still a long way to go.
The report points out that the underlying technologies of the metaverse are complex, not fully developed, and function in complicated ways. Governments and companies must resolve various regulatory issues, particularly those related to data privacy and data storage. There are also risks—known and unforeseeable—that could trigger setbacks or disappointment.
“However, not one of these issues is stopping the metaverse, as the growing number of metaverse applications in the GCC demonstrates. As the metaverse’s theoretical and practical issues are overcome, the promise of value creation can only grow,” concludes the report.
Edited by Swetha Kannan