- 97% of executive respondents say the gaming industry is central to the development of the metaverse
- Mitigating cyber risks will be a key challenge for 58% of gaming executives
- 48% believe the metaverse will change gaming company business models and drive revenue
- Customized, safe and secure user experiences will prevail in the metaverse
A newly released study from Ernst & Young LLP (EY US), “What’s Possible for the Gaming Industry in the Next Dimension,” finds that a significant majority (97%) of the gaming industry’s executive respondents agree that gaming companies are at the center of the metaverse. As early adopters, gaming companies today are considering how to best meet this major transformational shift as the metaverse drives new ways of gaming and interacting. Nearly 50% of gaming executives believe that the metaverse will change their business models and drive new revenue streams while also allowing brands new opportunities to build relationships with their customers. Notably, 95% of executive respondents believe that non-gaming companies will benefit by following how gaming companies are engaging with the metaverse and applying that to their own industries.
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To succeed, gaming companies will need to rethink their product and people investments. According to the EY US report, in contrast to recent spikes in merger and acquisition (M&A) activity in the technology sector, only 15% of executives agree that M&A will best position them for growth in the next three years, with half (50%) instead pointing to increased funding for research and development (R&D) and 44% to investment in new technologies, with a focus on organic growth and innovation.
“Gaming companies are already several steps ahead of many industry groups in the metaverse, but they are still determining how best to position themselves for sustainable success,” said Scott Porter, EY Americas West Region Media & Entertainment Consulting Services Leader. “Gaming executives hoping to best capitalize on the metaverse will need to develop a vision for their companies, attract talent that has the skill set to usher in innovation and address the growing cybersecurity risks. They’ll need to do this while simultaneously building platforms and capabilities that deliver a high-caliber, user-centric experience to an audience that has an insatiable appetite for the next big thing.”
As gamers input more and more personal information into the metaverse to best personalize their unique experiences, gaming companies will be responsible for protecting this user data from cyber criminals. According to the EY report, gamers who want to visit exciting locations in the metaverse will not stay long if they feel their personal data or their safety is at risk. In contrast, gamers will frequent, spend more time with, and return to platforms and products offered by companies they feel are transparent, safe and trustworthy, suggesting that cybersecurity is essential to a customized gamer experience and brand loyalty.
Indeed, 47% of executives have already or are planning to hire employees with advanced cybersecurity skills, while 39% have or are planning to partner with third-party cybersecurity firms. By implementing effective measures around both personal safety and cybersecurity now, gaming companies will be in a better position to help shape the industry dialogue around these issues today and in the future.
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Non-fungible tokens (NFTs), which in gaming can include digital assets that players own in their virtual universes, have the potential to be a building block of the metaverse economy. According to the EY US report, gaming executives believe that NFTs increase customer satisfaction, grow margins and improve the visibility of products and services.
Despite these benefits, 90% of executives say their companies currently do not have a viable business model to capture value from NFTs. To bridge this gap, successful gaming companies will focus on not only developing NFT technology that supports what gamers want but also on doing it in a way that is mutually beneficial to players and companies.
As gaming companies ramp up efforts to identify metaverse opportunities, human capital – in the form of developers, designers and other technologists – will be essential to gaining an advantage in this competitive market. The EY report finds that nearly half (45%) of executives cite a need to think differently about hiring because of the new skill sets they are seeking, while 40% say improving their current employees’ technology capabilities is a priority. Notably, the face of this skilled workforce is Gen Z (those born between the years 1997 and 2012), which is already heavily engaged in the gaming economy and primed to take on these emerging roles. Employers hoping to attract a Gen Z workforce should consider that this generation is a proponent of shifting norms around activism, wellness and success, according to an EY Gen Z study.
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