You may have heard the phrase “Metaverse” bounded around recently. It’s certainly a term that’s trending and it offers some interesting opportunities for savvy investors.
So, what is the Metaverse?
The metaverse is an online virtual world which incorporates augmented reality, virtual reality, 3D holographic avatars, video and other means of communication. Also referred to as Web 3.0 many of the large technology companies believe the Metaverse will be a new economy larger than our current economy.
The Metaverse may be more of a virtual reality than you think. In fact, this hyper-real alternative world is rapidly becoming a commercial reality.
The Metaverse will offer a way for people to coexist in one environment while being physically separated. As an example, you could be virtually sitting next to your best mate who lives on a different continent, speaking to each other as if you were a metre apart and watching your favourite sports team in another country within a virtual stadium.
With speculation that the metaverse will be an enormous growth industry you’d expect the big technology companies to be exploring this opportunity. So what moves are the big technology players making?
Recently, Microsoft acquired Activision Blizzard in a $96b deal to increase their exposure to the gaming sector and position themselves for the Metaverse.
Facebook has recently renamed to Meta and are betting their future on the Metaverse. Meta has been working on an AR helmet called Meta 2 and are looking to ship Meta 2 developer kits soon.
Nvidia, the large chip maker, has developed a platform called Omniverse which is a simulation and collaboration platform that builds physically realistic virtual worlds aka digital twins and connects other digital platforms and will be partly used to build the Metaverse. In a recent earnings call, founder of Nvidia, Jensen Huang stated the demand for digital avatars could reach tens of millions with a cost of approximately $1,000 per month, creating a revenue opportunity of hundreds of billions.
Investor interest in the Metaverse is gaining serious traction. In June 2021 an Exchange Traded Fund called “META” was listed on the US stock exchange to allow investors to buy into a basket of the biggest and most active companies involved in the Metaverse. This is an exciting space that we believe investors should pay attention to.