The word Metaverse, borrowed from the world of science fiction, is now a mainstream phenomenon. In fiction, it refers to 'avatars' interacting in virtual reality and was most recently popularized in the novel Ready Player One and its sequel.
But how does it translate to real-world applications? We will try to understand this and learn about the companies taking Metaverse to the real world.
A Metaverse would combine elements such as virtual environments, smart glasses, AR and VR apps, and headsets, along with real-world aspects like online shopping, social media, entertainment, and gaming in a single ecosystem or a set of interconnected ecosystems.
Other interpretations include a virtual office for real conferences, work from home, and even education.
Recently, Facebook has been in the news to rebrand itself as "Meta" and announce itself as a metaverse. But it is not the only company vying for such a status. Let's look at the various players that are already working to become metaverse or have the potential to become one soon.
Roblox already has a functioning system that is close to a metaverse. The firm’s gaming platform has a virtual world where multiple players collaborate to play games. New worlds are constantly created within. Roblox has its own virtual currency and conducts virtual events such as concerts within its ecosystem.
Source: Morningstar
Meta Platforms – earlier known as Facebook: Facebook changed its name to Meta Platforms. The company aims to make the internet space immersive rather than something that is used from outside. Meta already owns some of the most valuable properties in social media, including Facebook and Instagram, and the instant messaging platform WhatsApp. The firm also owns Oculus, the virtual reality equipment maker, and Horizon Worlds in the VR gaming space. These would play a major role in the firm’s vision for a Metaverse.
Nvidia is famous for its high-end semiconductor chips. The firm is a key player in the graphics processor field. While Nvidia’s chips would play a crucial role in the development of virtual worlds and metaverses, the firm itself is developing a metaverse platform. Named Nvidia Omniverse, it is meant as an integration point for 3D applications. According to the firm, the Omniverse could be used to collaborate on software design, simulation and even visualizing virtual worlds.
This software and cloud computing behemoth also has major plans to become a leader in the metaverse race. Microsoft intends to integrate its Xbox system and HoloLens smart glasses to achieve its metaverse goals. According to the firm, it expects virtual avatars and holograms to play a major role in its metaverse.
Shopify is a vital player in the e-commerce space. It also plans to play a major role in metaverses by facilitating marketplaces for trading digital items like NFTs and integrating virtual reality and augmented reality in payment systems.
Amazon plans to use its dominant position in e-commerce and cloud computing to convert its ecosystem to a metaverse. The firm would blend its online shopping environment, cloud services, and entertainment businesses to this effect. The firm is aiming at establishing virtual stores, virtual trials, and other virtual and augmented reality experiences within its ecosystem.
Unity Software is a top player in the video game software space. The firm’s software plays a crucial role in 3D games. Unity too wants to play a major role in the metaverse space by providing the infrastructure to develop content and aid in design collaboration.
Other names that are likely to play a significant part include Alibaba, Sony, Fastly, Autodesk, and Tencent.
Source: Morningstar
Investment options:
Investing directly in the stocks is an option for investors seeking exposure to the metaverse area. There are ETFs directly available as well that give exposure to many of the names we have covered. These include Nasdaq Internet ETF (PNQI) and the ARK Next Generation Internet ETF (ARKW).
Source: Morningstar
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