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97% of executives in a new study believe the gaming industry is central to the development of the metaverse, and 48% said the metaverse will change gaming company business models and drive revenue while also giving brands new opportunities to build relationships with their customers, according to a new study from Ernst & Young.

Notably, 95% of executives said they believe that non-gaming companies will benefit from following how gaming companies are engaging with the metaverse and applying that to their own industries.

SEE: Metaverse cheat sheet: Everything you need to know (free PDF) (TechRepublic)

“In terms of the way gaming companies operate, the metaverse could lead to significant changes in their business models, the way they develop their products, the employee skill sets needed – even the way these companies are structured,’’ said Scott Porter, EY Americas west region media and entertainment consulting services leader. “Gaming executives are aware of and planning for these possibilities.”

These executives in the gaming industry plan to increase funding for R&D in the next three years, invest in new technologies and hire new skill sets, according to Porter. “In the next few years, we will most likely see these structural shifts positively affect the quality and scope of what is offered to gamers in the metaverse.”

According to the EY US report, in contrast to recent spikes in mergers and acquisitions in the technology sector, only 15% of executives agreed that M&A will best position them for growth in the next three years. Instead, half of the respondents pointed to increased funding for research and development and 44% to investment in new technologies, with a focus on organic growth and innovation, the report said.

Personalized, immersive experiences and data security are vital

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 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.

Porter said the increase in user data in the metaverse, coupled with the buying and trading of assets in the metaverse, will also increase the possibility and incidents of cybercrimes.

“Cybercrime could look like any number of things: You could have cyber criminals looking to obtain personal information like credit card numbers, stealing virtual goods, selling fake non-fungible tokens, carrying out distributed denial-of-service attacks on gaming platforms, or even selling virtual goods or ‘hacks,’ which are marketed to improve a gamer’s performance when they’re, in fact, Trojan horses for ransomware,’’ Porter said.

Gaming executives are well aware of their obligations to protect information and validate that games and platforms are safe environments and they are taking these risks very seriously, Porter explained.

Based on the data from the gaming survey, 47% of gaming executives believe that mitigating cyber risks is a key challenge today. When looking out to three years in the future, that number jumps to 58%.

“We’ll see more gaming companies mitigating security concerns by hiring employees with advanced cybersecurity and data analytics skills, gaining visibility into gaming endpoints and partnering with third-party cybersecurity firms,” Porter said.

Already, 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.

Gaming execs unsure how to incorporate NFTs

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 said 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, the report said.

Wanted: Advanced cybersecurity, data management skills

As gaming companies ramp up efforts to identify metaverse opportunities, they are also faced with an influx in available user data. The task of protecting this personal information from cyber criminals means gaming companies will need to attract talent with a background in data analytics and cybersecurity.

In fact, nearly half (47%) of gaming executives said they are confident that they will be able to manage cyber risks by hiring employees with advanced cybersecurity skills. Further, 32% said that making use of the data their companies collect is a significant challenge today.

In this environment, companies plan to revamp their data management skills, with 47% of survey respondents citing hiring new employees with advanced skills in data analytics as a top data-related priority. It’s also critical for gaming companies to hire people who understand the implications of decentralized and distributed ecosystems, the EY report said.

Developers, designers and other technologists will also be essential to gaining an advantage in this competitive market. The EY report found that 45% of executives cited a need to think differently about hiring because of the new skill sets they are seeking, while 40% said improving their current employees’ technology capabilities is a priority.

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