The metaverse in Asia: Strategies for accelerating economic impact

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.

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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.

Early metaverse platforms

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.

Impacts 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.

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:

First, Asia dominates the hardware supply chain in terms of raw materials and the manufacture of electronics and semiconductors.  

Second, the region has over 1 billion mobile gamers, the biggest mobile player base worldwide.

Third, South Korea was the first major economy to articulate a comprehensive blueprint to foster its metaverse industry.

Fourth, 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.

Fifth, Indonesia, Thailand and Vietnam are pioneering new business models especially among small- and medium-sized enterprises, and innovating with web3 and blockchain technologies.

Sixth, 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.

Seventh, 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, adding that 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.

The Vietnam story

Deloitte’s analysis suggests that the potential 2035 economic impact of the metaverse in Vietnam is US$9 to 17 billion per year, or 1.3 to 2.4 percent of overall GDP.

The Vietnamese are entrepreneurial, creative and young – 37% are under 25 years of age. These traits help the country punch above its weight in shaping the future of the web. Vietnam has been one of the most active players in the Web3 space. Its tech unicorn, Sky Mavis, popularised the “GameFi” (or play-to-earn) concept with its hit blockchain-focused game Axie Infinity. Vietnam also topped the 2021 Chainalysis Global Crypto Adoption Index signalling broad social acceptance of cryptocurrencies.  

The Vietnamese government is actively putting in place the guardrails for the digital age, including a flurry of regulatory reviews of digital-related laws in the next 1-2 years. Besides digital regulations, a supportive start-up environment will also be a key enabler. A Metaverse Village has been set up to facilitate the ecosystem for metaverse technologies including researchers, start-ups, funders and other individuals.

Key sectors to watch are (1) Gaming: With a high smartphone penetration rate, mobile gaming forms the largest segment and is growing exponentially. With the success of Sky Mavis, VNG and the fast-growing base of mobile gamers in Southeast Asia, Vietnam could leverage these early advantages in designing user-centric experiences and applying the latest digital technologies to drive progress in the country’s digital transformation. (2) Education: Vietnam has a fast-growing e-learning market. With a growing demand for skilled labor in the manufacturing and tech sectors, the Vietnamese government has set a goal to make online education available at 90% of universities and 80% of secondary schools and vocational training facilities by 2030. Metaverse applications in education could improve the effectiveness of such training.

“The embracing attitude by not just start-ups, but also by the broader population, of new web technologies and use cases puts the country firmly on its path to achieving its ‘Make in Vietnam’ strategy and digital economy goals,” said Mr. Do Danh Thanh, Partner of Digital & Cyber Advisory Services, Deloitte Vietnam.