Last Thursday, Casey Newton at the Verge reported on a June presentation from Facebook CEO Mark Zuckerberg where he explained to employees that the social media giant’s future would not be focused on social media. Instead, Newton wrote, Zuckerberg said “Facebook would strive to build a maximalist, interconnected set of experiences straight out of sci-fi — a world known as the metaverse.”
So, what is the metaverse and what does it mean for the burgeoning space that a $1 trillion company is diving in headfirst?
The term “metaverse” was coined by the novelist Neal Stephenson in his 1992 book Snow Crash. It refers to a fully inhabitable digital world — think: The Oasis of Ready Player One. Clearly, we’re still years away from the imagined VR-powered worlds of that speculative fiction. But, as Zuckerberg’s announcement shows, there is momentum toward making the metaverse a reality.
Aside from the announcement, Zuckerberg has made a tangible investment proving his commitment to the metaverse. As of March, nearly one-fifth of all Facebook employees work in the AR/VR division of the company: Reality Labs. Facebook is paying almost 10,000 employees to help build the future of AR/VR — they’ve also acquired a handful of VR gaming studios over the last few years and spent $2 billion in 2014 to buy Oculus, one of the leaders in VR.
As Zuckerberg told Newton on Thursday: “A lot of people also think about the metaverse as primarily something that’s about gaming. And I think entertainment is clearly going to be a big part of it, but I don’t think that this is just gaming. I think that this is a persistent, synchronous environment where we can be together, which I think is probably going to resemble some kind of a hybrid between the social platforms that we see today, but an environment where you’re embodied in it.”
Clearly, Zuckerberg’s vision of a metaverse beyond gaming and entertainment, where socializing and commerce can occur in a virtual world, is a paradigm-shifting vision. It would seem clear that to achieve that vision would mean a mainstreaming of VR and AR devices, but what else would be required? What money would be spent within the digital world? What would it take for stores to exist there? What servers would power the massive data-powered world? What previously unimagined innovations will exist there?
While Facebook’s massive investment of manpower and money is a sign of the future mainstreamification of the metaverse, this last year of remote living may be just as influential in its rise. A huge chunk of the population has started to work and socialize through their laptops and devices — the virtual office, the virtual event, and virtual workout class are not going anywhere even after the pandemic ends. Each of these new innovations are stepping stones to the more immersive vision of a metaverse. As the venture capitalist Matthew Ball wrote on his blog: “The Metaverse will require countless new technologies, protocols, companies, innovations, and discoveries to work. And it won’t directly come into existence; there will be no clean ‘Before Metaverse’ and ‘After Metaverse’. Instead, it will slowly emerge over time as different products, services, and capabilities integrate and meld together.”
In the New York Times piece on the metaverse, they highlighted Decentraland, a virtual community where users buy plots of digital land, put on art shows and events, spend the cryptocurrency MANA, and even can use it to gamble at virtual casinos. Each user has an NFT avatar with which they move through the world. As of now, Decentraland is tiny — a few hundred users logged in at any moment — but it’s easy to imagine scaling such an experience if a tech giant put their weight behind it.
As the Decentraland spokesman explained to the Times, the difference between their metaverse and a metaverse like Fortnite which also has avatars and holds virtual events (a virtual Travis Scott concert brought in 12 million viewers) is that theirs is decentralized and not created and controlled by top-down decision makers. Whether future metaverses follow the lead of Decentraland or Fortnight remains to be seen.
While gaming worlds like Fortnite, Call of Duty, Roblox and more are bringing millions of people into the metaverse, the possible opportunities around the metaverse goes beyond gaming and beyond just guessing who will build the next inhabited virtual world. As Unifimoney Board Advisor Max Obson puts it, “Crypto is a natural partner with metaverse video games. The metaverse is also used for building digital twins — full digital copies of real physical objects. Companies like Autodesk will be instrumental in that application.”
Thinking along those lines is often a lucrative strategy when hoping to invest in a growing space. During the goldrush, some got rich panning for gold, but most of the fortunes that still exist today were earned by those selling pans, jeans and other supplies to the miners.
Another simple strategy is to buy shares in an ETF that bundles the metaverse space into a single holding. At the end of June, Roundhill Investments created META, a metaverse ETF: “the first index globally designed to track the performance of the Metaverse.”
Whether the metaverse proves to be the successor to the mobile internet or just another failed attempt at mainstreaming VR/AR, it’s good to stay abreast to what Silicon Valley is talking about. After last week’s Zuckerberg interview with The Verge, it’s clear that these days, the talk of the Valley is the metaverse.
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