Investing in the Metaverse

Is the Metaverse the next great thing in investing? Facebook is changing its name to Meta with a nod to the company’s ventures into new technologies and the Metaverse of virtual reality and more. And, Microsoft is buying Activision Blizzard at a premium of $70 billion to cement its place in the growing realm of the Metaverse. What is this all about? Is investing in the Metaverse a great idea or not? First of all what is the Metaverse and what will be the investment opportunities?

What Is the Metaverse?

Wired explains what the Metaverse is. Promoters like the folks at Facebook say it is the future of the internet. Wired notes that the “Metaverse” today is like the internet in the 1970s. It is long on concepts and short on the sorts of practical applications that are likely to emerge. As we envision it today, the Metaverse is not going to be a new technology but rather how technology is applied and how individuals will react with that technology. There will be a heavy dose of virtual reality with headsets in which reality is augmented. Think of this in terms of playing much more realistic video games. Or think of it as being in a video chat showing your avatar in an exotic location engaging in exotic activities instead of yourself sitting at your kitchen table with dishes piled up on the sink in the background. So, who will the players be?

Facebook Changes Its Name to Meta

Facebook founder and CEO, Mark Zuckerberg, says that he wants a new name that does not just focus on Facebook and its family of social media platforms. Rather, he says, he wants to focus as well on the broader aspects of new technology that the company is working on including virtual reality. Of course, the name change may also be a way to take the focus off of the whistleblower who has testified before congress about how Facebook’s algorithms are designed to reward inflammatory rhetoric, racist speech, and those who engage in hate speech. Facebook ad revenue has slipped and this could also be a way to tell investors that the company will have greater value going forward.

Why Is Microsoft Buying Activision Blizzard?

The New York Times Dealbook notes that when Microsoft buys Activision Blizzard it will get a company with intellectual properties that include Call of Duty, Crash Bandicoot, Guitar Hero, Tony Hawk’s, Spyro/Skylanders, World of Warcraft, StarCraft, Diablo, Hearthstone, Heroes of the Storm, Overwatch, and Candy Crush Saga. They have more than 400 million monthly users. Although the stock popped up impressively with the Microsoft buyout announcement, it is down over the last year.

As noted in the Dealbook article, Microsoft is a major force in cloud computing and the leader in business software. Adding a leading video game developer to their stable rounds out their product offerings and positions them to profit as the Metaverse evolves into whatever form it will take in the coming years. The announcement did not help Microsoft stock in the short term as, perhaps, the market thinks they are paying too much for the buyout. But, if you look at this as investing in the Metaverse as it evolves, the move will likely generate long term profits that make the buyout price cheap in comparison.

Players in the Evolution of the Metaverse

The focus today is on Facebook and Microsoft in regard to the Metaverse because they are the ones in the news. But, there are more companies to watch if you are interested in investing in the Metaverse. Reworked looks at eight more Metaverse players. Here is their list:

Active Theory
AWS
Decentralland
Dapper Labs
Epic Games
Madeium
NVIDIA
Synthesis AI

As with all investments in tech there are those who create or discover tech applications and those that reliably apply them for profit. Success in investing in the Metaverse will depend on finding those companies that will create continuing, reliable cash flow in this realm.

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