The Metaverse, a natural expansion of the Internet, is a macro-goal for global tech companies. The metaverse expands the Internet’s functions to build interactive, immersive experiences. Companies like Facebook, Google, and Amazon aim to drive users deeper into the metaverse, giving them access to fully developed digital worlds for shopping, services, and connection.

What is the Metaverse?

The metaverse is a digital, or virtual, universe comprised of many digital locations, experiences, services, technologies, and communication experiences. The Metaverse isn’t just artificial intelligence (AI), augmented reality (AR), or virtual reality (VR) but it uses each of these technologies to propel a world where people, represented by avatars, conduct a virtual version of the day-to-day business of living.

Metaverse Experiences

The Metaverse isn’t a single platform, online experience, or game. It’s an entire world made up of many experiences, games, platforms, and communities. Like the Internet, there are many languages, technologies, and protocols working within the Metaverse.

The Metaverse has the potential to change how we monetize and allocate resources. For example, as the Metaverse grows and gains functionality, people who live far away from cities won’t have the same restrictions in their ability to work and be socially connected as they do today.

AI vs AR vs VR

The Metaverse requires artificial intelligence (AI), augmented reality (AR), and virtual reality (VR) technology to operate and evolve.

• AI: A computer system’s simulation of human intelligence, including natural language processing, machine vision, and speech recognition (machines solving problems and processing large amounts of data).
• AR: An immersive experience combining physical and digital environments (Pokemon Go or Snapchat lenses).
• VR: Experiencing a virtual space or world using technology (Oculus Quest, HTC Vive Pro Eye).

App developers use AI and AR to create engaging experiences in gaming and virtual worlds. VR provides a way to experience a digital space that includes a sense of physical presence.

Big Players in The Metaverse

The idea of a Metaverse, expressed in the 1999 science fiction movie, The Matrix, may seem like a far-fetched fantasy. However, developers are successfully building virtual online environments that are connected.

As gaming platforms like Fortnight gain functionality and evolve into technologically advanced social meeting places, it becomes more likely that a functioning Metaverse, with an independent economy, systems, and processes is in our future.

Fortnite

Fortnite started as a game but is now a social meeting place where people can interact virtually. Teens and young adults interact with their friends on Fortnite much the same way that teens in the 90s interacted over their parents’ landline phones. While the technology is much different, the conversations are similar. Brands couldn’t access the phone lines of the ’90s, but they have easy access to hundreds of thousands of potential customers on Fortnite.

• The Rise of Skywalker released an exclusive clip of the film on Fortnite as part of an interactive event. The Fortnite Star Wars event was referenced in the opening scenes of the film.
• Fortnite has produced “limited-time modes” including Lionsgate’s John Wick films, Batmans’ hometown of Gotham, the old west, and Nike’s Air Jordan. These modes change parts of the Fortnite map into a themed mini world.
• Weezer recently produced a specially designed island inside the game where fans could listen to their newest music in a social atmosphere.
• There’s a unique intersection of DC and Marvel in Fornite. The two brands are competitors and do not intersect elsewhere, but in Fortnite’s universe characters from each franchise meet and interact.

Fortnite’s sub-economy allows players to build and even monetize their content. The game’s Creative Mode has much in common with an advanced and futuristic Metaverse.

Unreal

There’s more to Epic Games than Fortnite. Epic Games also owns Unreal; the second biggest gaming engine. Epic Games’ stack of software and tools powers many media experiences.

• Unreal powers the Fox Sports NASCAR set.
• The Mandalorian (Disney) directed by Jon Favreau, was shot and rendered in Unreal.
• Audiences could explore these sets at home if Disney decides to monetize that aspect of Unreal’s potential.

Roblox

Roblox (NYSE: RBLX) users spent almost 10 billion hours playing on the platform during the first quarter of 2021 with 42 million users logging in every day.

Independent developers can create games with Roblox, and the ability to purchase digital items for characters generated $652 million in Robux, the site’s virtual currency.

The company went public in March of 2021 and is now about 15 years old. The Roblox immersive social and gaming network is loved by children who had limited ways of socializing with friends during pandemic lockdowns.

How mature is this market?

The metaverse is in the pre-emerging market stage. Gaming is big business all over the world with global revenues of $160 billion. In-game advertising generated $3 billion in 2020. The idea of a Metaverse may seem like it’s finally possible, and the number of people using platforms with metaverse aspirations is gigantic. The global games market will earn $189.3 billion according to 2021 forecasts.

• Decentraland: 10,000 daily users and $50 + million in-game sales
• Second Life: 500,000 – 1 million daily active users
• World of Warcraft: 5 million daily active users
• Farmville: 34.5 million daily active users
• Fortnite: 22.5 million daily active users

There’s more to investing in the future of the metaverse than gaming stocks, though.

How to invest in this segment

There are several ways to invest in the future of metaverse technology; gaming stocks, gaming futures, pre-IPO investing, and purchasing the cryptocurrency used in virtual reality platforms.

Decentraland

Decentraland’s users can purchase virtual land allowing them to control published content in their space, including games and static 3D scenes. Land in Decentraland is a scarce digital asset that’s transferable and stored in an Ethereum smart contract.

Purchasing land is possible with the use of MANA, which can also be used to purchase digital services and goods inside Decentraland. The value of MANA, Decentraland’s cryptocurrency tokens, has spiked 1,085% during the past 12 months.

Epic Games

For some, pre-IPO investing in Epic Games seems like an attractive option. The company was founded by Tim Sweeny and Mark Rein in 1991 and raised $1 billion in funding In April 2021, bringing the company’s private market valuation to $28.7 billion. Epic Games hasn’t addressed questions about whether they’ll participate in an IPO in the near future.

The company owns Gears of War and Fortnite video games, as well as the Unreal Engine for video game development, which is compatible with web, mobile, AR/VR, console, and PC technology. Epic Games also makes money with the $11.99 per month Fortnite Crew subscription which is required if players want access to perks like extra weapons.

Gaming Stock

For more traditional investors, Facebook, Amazon, Nvidia Corp., Unity Software, Microsoft, and Disney are major players in the developing metaverse sector that are worth watching.

• Facebook (FB): In Facebook’s second-quarter earnings call, Mark Zuckerberg talked about “a virtual environment where you can be present with people in digital spaces”. The company is at the forefront of metaverse technology, earning Facebook a spot on many investors’ lists of potential metaverse investments.
• Amazon.com Inc. (AMZN): It’s only a matter of time before Amazon’s digital cloud, shopping, and entertainment services morph into a virtual world where shoppers can buy products, interact socially, and exist in the Amazon metaverse. The company has been talking about a VR shopping experience for the past few years, and it’s likely that Amazon Web Services and Microsoft Azure will be critical to the execution of Amazon’s plan.
• Nvidia Corp. (NVDA): Nvidia CEO Jensen Huang speaks often about the metaverse, noting that early metaverse inhabitants are already building towns, gathering for social events, and connecting on this alternate plane. The company recently launched its Omniverse digital platform for virtual simulation and collaboration. Nvidia produces video processing chips and graphics for high-end supercomputers and VR applications.
• Unity Software Inc. (U): As owners of a major 3D video game engine, Unity Software powers 94 out of the 100 biggest game development studios. Unity is poised to help businesses and developers build the metaverse. They’ve already built a functioning virtual model of Hong Kong International Airport.
• Microsoft Corp. (MSFT): Microsoft is working on a metaverse stack that allows users to build a digital model of anything logical or physical. The company plans to integrate digital twins, mixed reality, and the Internet of Things.
• The Walt Disney Co. (DIS): Disney plans to build a Disneyland theme park metaverse, releasing its theme parks from physical limits. The company started offering VR rides with 360-degree YouTube videos in 2016.

Gearing Up

The Metaverse is poised to revolutionize the digital world as well as the physical world. While the Metaverse remains difficult to imagine and impossible to define, the pieces of what will someday be the Metaverse are beginning to fall into place.

The creation of the Metaverse of the future may take decades, producing a lengthy and unpredictable chain of events. There have been few other events in known human history with the same potential to produce lucrative investment opportunities.

Contact us today to learn more about investing in the Metaverse and companies working to create the Metaverse as well as opportunities in the pre-IPO private market