“Today, if you look at all of the revenue that the metaverse generates (which could reach $800 billion by 2024), most of that is in the gaming aspect of the metaverse,” Cliff Justice, KPMG U.S. leader of Enterprise Innovation, told me. “All the collaboration that has been developing, maturing and refined in the gaming space is extending into more serious business to business and business to consumer commerce.”

KPMG US and Canada are investing a combined $30 million over the next year in a focus on Web3 and metaverse capabilities, including a collaboration hub. “This is an investment in our people and new technologies,” Justice says. “We’ve created a center for excellence in the U.S., and Canada has done the same. We’re developing products and services. We have a studio incubator to test new ideas and new services around Web3 and the metaverse. And we have funds set aside to co-develop with clients.”

Think of the metaverse as “the evolution of the internet,” Justice says. Beyond the extended reality aspect of the metaverse, it is part of Web3 technologies, which is really enabled by decentralized blockchain technology, and “conceivably in the future provides a more immersive and trusted interactive internet,” he says.

Businesses want to capture a younger demographic and get their attention. “I’ve got a 14-year-old who plays Roblox, Fortnite, and Minecraft,” Justice says. The younger generation is used to collaborative platforms, he says. “It’s very natural to extend that gaming space into more business commerce,” Justice says. KPMG’s exploration of Web3 began pre-pandemic. Justice and a colleague wrote a paper published in 2019 on extended reality (real and virtual combined environments) beyond gaming, he says. The research came in handy at the onset of the pandemic to make a case for increasing investment in the area as the demand for more collaborative technology became necessary. 

Training is an “essential early-stage use case” for KPMG employees in the metaverse. “These are just more rich, engaging forms of training versus your typical online recorded training models that we’ve used for the last decade or longer,” Justice says. For example, employees will receive training for specialist-oriented skill sets that focus on finance, accounting, auditing, or risk or assurance for regulator matters. KPMG has purchased virtual reality headsets for employees to enter the metaverse, but they are not beholden to a particular vendor. “We’re agnostic to the platform and the hardware that we use,” Justice says. In the metaverse, KPMG clients can simulate a manufacturing location and bring expertise from different parts of the world to collaborate, he says.

KPMG in Canada has added Ethereum and Bitcoin to its corporate treasury. “The U.S. firm has not,” Justice says. “These are very volatile, emerging kinds of technologies. Big shakeouts are underway right now. That’s not high on our priority list. Neither firm has announced any type of material investments in any particular cryptocurrency.” The U.S. firm is more interested in the blockchain technologies that underpin cryptocurrencies as a way to exchange intellectual property and secure data.

It will take at least 10 years for the Web3 protocol to overtake the current Web2 protocol, Justice says. “There’s plenty of observable data points that are useful to a CFO from the early adopters of the metaverse,” he says. “Look at the fundamentals and the foundational technologies that improve business, the business results and profitability, the revenue potential and customer experience.”

See you tomorrow.

Sheryl Estrada
sheryl.estrada@fortune.com

Big deal

A new report by S&P Global Market Intelligence found that capital markets activity among publicly traded information technology companies in the U.S., Canada and Bermuda brought in $2.94 billion in May. However, that's a 63.73% drop from about $8.1 billion in April. In addition, it's the sector's second-lowest monthly total in 2022, after the $2.04 billion raised in January. The biggest portion of the total capital raised in May was through senior debt offers, according to the report. 

Courtesy of S&P Global Market Intelligence

Going deeper

It’s time for CEOs to put suppliers first, a Fortune opinion piece by partners at the Boston Consulting Group, makes the case that CEOs can better predict and prepare for supply-chain disruptions in the future "by putting suppliers at the very heart of their business."

Leaderboard

Ian Borden was named EVP and CFO at McDonald's Corporation (NYSE: MCD), effective Sept. 1. Current CFO Kevin Ozan will take on a new position of senior executive vice president of strategic initiatives. Ozan joined McDonald's in 1997. He plans to retire from the company by mid-2023. Borden is currently president of international. He first joined McDonald's in Canada in 1994. From there, he went on to serve in roles including CFO of Asia-Pacific, the Middle East and Africa region and CFO for Russia and Eastern Europe. He's also had several other leadership and P&L roles.

Kim Pinson was named CFO at Intrusion, Inc. (Nasdaq:INTZ), a cyberattack prevention company, effective June 27. Pinson has over 25 years of experience leading finance and related functions. Prior to joining Intrusion, Pinson was CFO for NetFortris, a managed IT and UCaaS provider, EndoStim, an early-stage medical device company, and United Orthopedic Group, an orthopedic bracing and healthcare services company. She has also held senior finance leadership roles at Quadrem, Xtria, Novo Networks, and Centex. Pinson's earlier career began at Grant Thornton in audit.

Overheard

"The reality is, if you are in the office, you get pulled into a lot of interesting ‘real time’ situations because physical presence matters."

—Rich Handler, CEO of investment bank Jefferies, weighed in on the return to office. Hybrid work will stick around, but workers should be wary of dismissing the value of collaborating in person, Handler told Fortune.