The 7 Metaverse Opportunities You Shouldn’t Miss
Metaverse is the latest buzzword capturing headlines primarily due to Facebook’s decision to change its parent company name to ‘Meta.’ A compilation of advancements in graphic rendering software, blockchain technology, a dystopian outlook on our physical reality, and the entire world being forced to digitalize has fueled interest in putting immense amounts of capital into building a virtual world.
While the Metaverse doesn’t actually exist, depending on who you ask (more on this later), major corporations, investors, and crypto bros are convinced that a virtual world is the next frontier in technology.
Whether you are a believer or skeptical of a virtual world fueled by cryptocurrency and built by Mark Zuckerburg, the Metaverse is coming, and there are many investment opportunities on the horizon. We’ve dedicated this entire post to explaining the Metaverse on a high level and presenting you with a few business model examples to get involved.
What is the Metaverse?
The Metaverse is an idea that one day the internet will evolve to become more interactive by combining multiple technologies, including virtual reality allowing users to essentially ‘live’ within digital space.
For now, the term is conceptual. There hasn’t been a single mutually agreed upon digital universe that is ‘THE’ Metaverse, but that hasn’t stopped countless companies and investors from preparing for the future. Whatever pans out in the coming years, we do specific technologies that will be used to build the infrastructure necessary for the hypothesized virtual world.
Different Visions of the Metaverse
The term Metaverse comes from the 1992 science fiction novel called “Snow Crash” by Neal Stephenson. In the novel, Stephenson describes a virtual world where the protagonist socializes, shops, and defeats real-world enemies through his personal avatar.
Another popular iteration of a virtual world through fiction is seen in the novel and blockbuster motion picture, “Ready Player One.” In this story, the virtual world is game-driven but has real-life consequences. The protagonist competes for money to lift himself from the dystopian world set in the future.
These two examples show how different examples of how our Metaverse could take shape. Many envision the future of the internet to host everyday interactions like payment processing and digital assets, while others see the Metaverse as an opportunity for entertainment.
As reported by TechCrunch, Martin Lau, President of Chinese multinational investment holding company Tencent, recently expressed his excitement for the new virtual world during a call with investors. Lau stated that Tencent was focused on the software side instead of the hardware like VR headsets.
However the Metaverse takes shape, an incredible amount of infrastructure will be needed to expand our current version of the internet. Payments, avatars, digital assets, and other features will need to be developed and hosted, presenting an opportunity for software companies to construct the technology required to build out a digital world.
Advocates of open-source business models are hopeful that the tools required to build the infrastructure needed to create virtual worlds or features in the Metaverse will be transparent and accessible.
Investing in platforms that host the technology is a promising approach to profiting off the Metaverse. There are infinite possibilities and likely unimaginable aspects that present themselves in the future. Whatever unfolds, it is clear that we need robust, scalable technology to support virtual reality, blockchain, and other mechanisms that will likely build the Metaverse.
3D Virtual Space
The most common vision for the Metaverse is an actual virtual place you can go to socialize, work, and be entertained. Facebook founder Mark Zuckerberg is betting billions that the Metaverse is the successor to the mobile internet. The newly named parent company, Meta, has hired over 10,000 employees and is buying virtual and augmented reality companies to get a head start on technology that doesn’t technically exist.
Zuckerberg’s vision appears to be a place to hang with friends and colleagues, as demonstrated in his informational rebrand Connect 2021 video below. The tech mogul is seen navigating different rooms, explaining avatars, going to concerts, and fencing with a hologram version of himself.
Another major player making early moves is Disney. The entertainment company owns an incredible amount of IP and is set up nicely to add virtual opportunities in their physical parks. Disney’s chief executive, Bob Chapek, told CNBC that he sees the company’s role “as an extension of Disney+, through the “three-dimensional canvas” he envisions for new types of storytelling, which could involve a cast of characters that ranges from Mickey Mouse to Snow White, Iron Man and Luke Skywalker.”
Augmented Reality Overlays
Meta also communicated an interest in commerce in the rebranding video but is vague on how it will play out. For example, they imagine brand ambassadors interacting with fans through VR rather than in a comment section and offering them a more immersive experience before buying a product.
We imagine the Metaverse playing a major role in online shopping, allowing users to try out products or possibly visit a virtual changing room.
VR and AR overlays could help with school, mapping, job training, and many more opportunities that are challenging in our currently limited 3D dimensional world viewed from a 2D internet.
If you asked the online gaming community about the Metaverse, you might hear it already exists. Second Life, an online PC game that allows users to create an avatar and hang out in a virtual world, has been around for nearly a decade. Other games like World of Warcraft, Fortnite, and even NBA 2K also feature Metaverse-like qualities where you can spend hours in a massive digital space accompanied by other users from all over the world.
Pokémon Go is another example of how gaming has already allowed millions of people to experience what the Metaverse could look like. The iconic game from Nintendo utilizes AR to blur the boundaries of everyday life and a virtual world created by the game developers.
The idea of the Metaverse takes the technologies used to build virtual space and brings them into everyday interactions. Instead of choosing to hang out in the massive virtual world of Grand Theft Auto, you may have to visit digital space to test drive a new car, sign a lease, or complete a transaction virtually in the near future.
Metaverse Vs. The Internet
The Metaverse and the version of the internet we use today will work together. While the vision of the Metaverse is to succeed in web 2.0, internet connectivity will still be fundamental in transcending the limitations of our modern 2D interfaces.
However, there will be critical differences in how users spend time online and in the Metaverse. Below are the four essential components needed to revolutionize how we interact with the current form of the web creating new opportunities to socialize, work, and play online.
Improved Graphics Technology – Seamlessly switching from IRL to a virtual world requires incredible graphics technology that we don’t really have yet. We are making headway, but there are clear challenges with software and hardware keeping the average person from using VR or AR in their everyday life.
Connectivity – Advancements in 5G, IoT, and cloud computing will help provide the bandwidth needed to build and enjoy a virtual world.
Consumer application of VR – Virtual reality is a key component of the Metaverse, and advancements are needed to convince businesses to utilize VR hardware somewhere in the consumer journey.
Digital IP/assets backed by blockchain – Cryptocurrency, NFTs, and DAOs (decentralized autonomous organizations) will play a key role in ownership and transactions in the Metaverse. Changes are happening rapidly regarding technologies backed by blockchain but still need to appeal to everyday low-tech consumers for widescale adoption.
These four aspects of the Metaverse will be essential in its development. In addition, societal factors driving interest to play a massive role in the current influx of capital rushing to a market that hasn’t been fully formulated.
Decentralization of assets and intellectual property is a direct reflection of the frustration of the corporatization of the West. Crypto, NFTs, and DAOs are presented as solutions to stop corruption, autonomize industries, and provide transparency. Blockchain will absolutely be a fundamental aspect of the Metaverse; however, it is still unclear if it will help decentralize the power of corporations like Meta in the hypothetical digital world.
The pandemic is another social component pushing the Metaverse and overall digitalization of society forward at an exponential rate. An entire generation is being raised with significantly human contact IRL. Social media and technology have allowed for the possibility to engage digitally, but the looming fear of spreading an infectious disease has increased the development of platforms needed and adoption rates.
Business Models Equipped for the Metaverse
When you understand how the Metaverse will function and the fundamental technology and ideology needed for it to succeed, you better understand what types of businesses are equipped to handle the colossal shift coming. Below are four business model patterns positioned to grow once the Metaverse becomes more tangible.
The open-source movement is too influential not to have a significant role in the Metaverse. However, moves like Facebook changing to Meta are alarming to advocates of free software, transparency, and a collaborative approach to development.
Online shopping has exploded since the beginning of the pandemic. The UN estimates an increase of $26.7 trillion since COVID-19 locked down retail businesses across the globe. While eCommerce offers safety, convenience, and increased competition, there are still limitations. The Metaverse will likely change how we buy products online. Meta is currently building Horizon, Facebook’s beta VR marketplace, to help creators and consumers.
We are still unclear if the Metaverse will cater to digital or physical products; the best guess is both; however, the future is yet to be written. The Metaverse could be an avenue for brick and mortar retailers that aren’t successful selling products in 2D to offer an immersive experience needed to provide their products without physical contact.
Blockchain and the Metaverse will likely be closely related. NFTs or non-fungible tokens are gaining momentum as solutions to decentralized ownership. Blockchain companies that build the technology, handle transactions, and offer marketing are all positioned to grow exponentially once the Metaverse takes shape.
Nike and Adidas have already made moves to position themselves in the new digital world. Adidas has released a rare ape NFT, and Nike has issued patents for digitally rendered logos. Both could be glimpses of what is to come once we have a Metaverse to escape to. Digital art and clothing could be ways to build wealth, as a status symbol, or both; only time will tell. However, it is clear that technology backed by blockchain will play a critical part in the Metaverse.
Facebook is already foaming at the mouth to monetize the new digital world. While their rebrand marketing video offers an optimistic view of a safe, secure, and fair Metaverse, don’t be fooled. The tech giant makes money off harvesting data and delivering the greatest targeting advertising the world has ever known. Meta is likely formulating plans to collect data and serve ads when the internet becomes an interactive digital space.
All platforms that host ads will likely succeed if the Metaverse is populated with advertisements. Hopefully, this won’t be the case, but it is highly probable since every form of media in history hasn’t managed to escape this fate.
7 Opportunities to Cash in on the Metaverse
Whether you are hopeful the Metaverse will be a digital utopia or hesitant to embrace a world where we spend even more time online, now is the time to start investing. You may have issues with the idea of the Metaverse, but that won’t stop it from coming. If companies like Facebook, Nike, Adidas, Disney, and even Chipotle are investing, you probably should too.
Just because major corporations are showing interest doesn’t mean that Zuckerberg’s vision for the Metaverse will come true. There still is a risk involved with any investment; however, we believe these companies offer early adopters great opportunities in various aspects of the new digital universe.
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Over half of US kids under the age of 16 played games on Roblox in 2020. The platform is essentially a virtual world that hosts user-developed games. Roblox allows users to develop games and play games created by other Roblox community members. Developers can monetize their games and earn a substantial living on the platform.
Transactions in the Roblox world are done with Robux and an exchange called DevEx.
Roblox Corporation (RBLX) recently went public and had a great IPO. Shares trading just under $100 (as of December 20, 2021) up 41% from the IPO this past summer.
Investing in RBLX is one of the most promising opportunities if you want to support companies already building out their digital world and infrastructure. We don’t know what the Metaverse will look like just yet, but it’s a safe bet to support platforms already successful in creating digital space.
Mesh for Microsoft
Microsoft has been one of the leading creators in technology for the last couple of decades, literally shaping how we view the modern 2D interface. Once offices shut down, Microsoft Teams became one of the most common tools professionals needed to continue working.
The video conferencing feature is one of the highlights of Microsoft Teams collaboration tools. However, one of the problems with transitioning in-person work to remote is the physical video chat environments. Many of us were exposed early on in the pandemic for working in what looked like dark dungeons through the lens of a low-quality webcam.
Microsoft solved this issue by rolling out Mesh. Instead of turning off your camera if you are in an unsuitable environment, you are given a fully customizable avatar to engage with your co-workers.
Organizations can also build virtual spaces to have meetings and collaborate with colleagues rather than a constrictive, stationary frame. Companies have already created entire virtual campuses to conduct interviews, meetings, presentations, and hang out with co-workers.
Investing in Microsoft may not feel as cutting edge as buying virtual art or VR software, but Microsoft is currently one of the only companies walking the walk. They have created the closest thing to a Metaverse outside of game developers.
Unity is a cross-platform game development tool powerful enough to create commercial games, easy to use, and free to get started. The software can be used to create 3D, 2D, VR, and AR. Unity is known for game development but also offers solutions for automotive, transportations, manufacturing, film, architecture, engineering, and construction.
Free that help developers quickly build out digital worlds are essential to creating the Metaverse. Millions of online users are ready to dive into digital space, and we need tools to easily create virtual worlds at scale.
Developers can use the software for free until their game or application makes significant revenue. Many gaming engines operate using this freemium type of business model. Also, some open-source companies allow the user to utilize their platform until they become profitable.
Unity (U) is available to trade on the NYSE. The stock opened at around $60 per share and is trading today at $137.
While Meta/Facebook is the clear front runner within the US regarding investing time and resources into the future of the Metaverse, Tencent is known as Meta’s Chinese counterpart. The tech company has been around since 1998, offering technology solutions, internet-related services, and products. Game development is what the company is known for and builds AI, mobile payment solutions, and other internet-related software.
Tencent owns or has a significant stake in dozens of companies positioned to make moves in the Metaverse, including a strategic partnership with Roblox. The company’s strategy has always backed companies pushing technology forward.
Investing in Tencent means supporting multiple aspects of the Metaverse. From infrastructure to gaming platforms and payment processing, Tencent has its hand in just about every type of business positioned for success in the Metaverse.
Most of the companies we’ve discussed are involved in software development, but hardware is also an essential part of virtual and augmented reality. Magic Leap is an industry leader in creating commercial applications for AR. The company focuses on bringing suitable hardware solutions to healthcare, manufacturing, and defense.
Magic Leap 2 is getting ready to roll out, now may be a great time to invest in the industry-leading producer of AR hardware prepared for commercial use.
Investing in Meta seems like a no-brainer if you want your foot in the door once the Metaverse takes shape. However, Facebook was voted the worst company of 2021, adding to its increasingly horrible reputation, and could be responsible for the most divisive time in recent memory. If the Metaverse is run by Meta and looks anything like Facebook, it will likely not reach widespread adoption rates.
However, even Zuckerburg says that the Metaverse will not be built by one single company. Investing in Facebook isn’t a bad bet, but the company has some baggage.
Decentraland is a virtual destination run on Ethereum. Visitors can explore, play games, and even buy and sell LAND. Decentraland also offers users the opportunity to purchase estates, avatar wearables, and names in the Decentraland Marketplace.
Virtual real estate is one of the most exciting aspects of the Metaverse. The concept can seem far-fetched, but the cheapest land is currently being sold for about 3 ETH, or $13,000.
If you want to invest in Decentraland but aren’t willing to put down tens of thousands of dollars, you can buy MANA, the cryptocurrency used in transactions in Decentraland.
Get in Now While You Have a Chance
Love or hate the idea; the Metaverse is one of the most exciting investment opportunities since the early days of cryptocurrency. If you are old enough to remember back in 2013 or so when Bitcoin was worth about $13 and one of the only handful of other cryptocurrencies, the idea that any of them would be worth over $50,000 was unfathomable.
Companies showing interest in a virtual world that doesn’t technically exist is hugely telling. The Metaverse will come in one form or another or may already be here, and we will continue to add to it. Either way, there are many incredible investment opportunities, and today is the perfect time to become an early adopter.
We could be at the early stages of the Metaverse, where investing has a low barrier to entry and plenty of room for error. In 5 years and investment may be worth the risk. Get in while you still can with our list of companies positioned to help build a new virtual world.