ESPN enters sports betting in the US
10 August 2023
15 August 2023
TMT companies are focused on four key areas in their quest for metaverse readiness.
Technology, media, and telecommunications (TMT) companies play important roles in building the metaverse. As they stake out positions and plan their offerings, industry players could move to build and buy metaverse-related capabilities like spatial computing, tokenized assets, 3D modeling, AI and machine learning, and augmented-, virtual-, and mixed-reality devices. Companies advancing their metaverse strategies should consider how far their existing technologies and in-house skills will take them on this journey, and where targeted acquisitions may offer the fastest and most effective growth strategy.
In the current hype cycle, almost any deal that involves high-speed networking or cloud or edge computing, for example, may be categorized broadly as “metaverse.” Our analysis found that, over the past 24 months, 115 transactions involved a technology or solution that could directly enable the metaverse. From offering next-generation entertainment experiences to providing the technologies that power it all, it is no surprise that TMT companies drove three-quarters of these deals. The metaverse landscape is fragmented, however, and still lacks any single dominant player. This could create an opportunity for companies to use mergers and acquisitions (M&A) to purchase critical components and fill strategic gaps.
To identify trends in metaverse M&A activity, we can draw useful “market boundaries” or categories around content, user devices, software, and economy. Three findings emerged from this view of the transactions:
As TMT companies look to develop metaverse capabilities, they should consider all aspects of the value chain, from hardware to software to virtual and physical services. Media and entertainment may look to bring their existing content into metaverse experiences, or to buy content libraries from others. In addition, these companies might need to partner or buy the technology required to deliver and scale those experiences. To help foster broader adoption, hardware companies developing user devices could consider interoperability by exploring partnership strategies. Hardware companies may also want to consider road-map acceleration through acquisitions or partnerships with niche or pure-play technology companies. Software companies and gaming studios can seek innovative capabilities that might enable content providers to bring their intellectual property (IP) into shared immersive experiences. All these opportunities underscore the need for thoughtful M&A strategies. As TMT companies think about building their metaverse capabilities, they should consider the following:
Acquiring a capability may offer an expedited path to knowledge, experience, and captured value. With an informed M&A strategy, companies could shape future markets and offerings and help to accelerate metaverse adoption.
"With a well-crafted M&A strategy, TMT companies can quickly gain insight and expertise that will enable them to shape future markets and innovative offerings to drive rapid adoption of the metaverse."
-Jan Kudlák, TMT Deloitte Leader