Facebook ignites the Metaverse wars - The Average Joe

    Facebook ignites the Metaverse wars

    Victor Lei — Head of Research

    November 10, 2021

    metaverse

    November 10, 2021

    In 2020, one of the biggest company tactics to get investor attention – getting in bed with electric vehicles (EV) (see Naked Brands, an intimate apparel company that’s merging with an EV company).

    But the next big trick, becoming a metaverse company – another internet revolution.

    A world of imagination and endless possibilities

    The metaverse is a broad term – referring to anything associated with virtual worlds. Users can interact in the virtual environment for shopping, education and entertainment — any real-life tasks — via augmented and virtual reality (AR/VR) devices. The metaverse will be:

    • “A fully functioning economy” and an experience “that spans both digital and physical world”, according to VC, Matthew Ball.
    • “The biggest revolution in computing platforms the world has seen — bigger than the mobile revolution, bigger than the web revolution,” according to Mark Whitten of Unity Software (via WSJ).

    Anyone that’s tried a VR headset though, knows we’re a long way to go. Over the years, Oculus, Meta’s VR headset company, experienced multiple failed launches due to poor user experience, lack of practical use and privacy issues.

    But we’re starting to see larger adoption of VR/AR. Last month, consulting firm Accenture, purchased 60,000 Oculus headsets to train new employees. Whether we’re ready or not to enter the metaverse, one company is going all-in…

    Leading the metaverse – the world’s largest social media company…

    Facebook (NASDAQ:FB) ignited the metaverse hype by rebranding to Meta. Following its announcement, other companies followed suit:

    • Microsoft launched Mesh, a mixed-reality platform that allows people to meet in a virtual environment using digital avatars.
    • Nike filed seven trademark applications to introduce digital versions of its merchandise inside the metaverse.

    With such a broad definition, many companies can consider themselves “metaverse” companies – including companies like Snap (NYSE:SNAP) and Roblox (NYSE:RBLX).

    On the riskier side are pure-play AR companies like Vuzix (NASDAQ:VUZI), a smart glasses creator with only $11M sales in 2020 and a $700M market cap.

    Investors: Powering the virtual world

    Despite its infancy, several companies are already developing the infrastructure required to power the metaverse:

    • Unity Software (NYSE:U) – a development platform for 3D games and movies to create AR/VR worlds.
    • Nvidia (NASDAQ:NVDA), the chipmaker, is designing tech to create metaverse applications – with Wells Fargo (via Barrons) seeing a $10B market over the next five years.

    The ETF Way: The Roundhill Ball Metaverse ETF provides exposure to the metaverse – with top holdings including Nvidia, Microsoft and Roblox.

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