The metaverse and what it might mean for investing
The metaverse is a relatively new term, but one that investors will be hearing more of. Since the term is still evolving it is hard to define, although most suggest that it is the next iteration of the internet, enabling users to have a more immersive experience beyond the current capabilities of the internet.
Others use the term metaverse to describe the many emerging technologies surrounding virtual reality (VR) and augmented reality (AR), and their application toward creating more immersive, 3D experiences online and digitally.
With Mark Zuckerberg opting to rebrand his company from Facebook to Meta at the tail end of 2021, to better position it as a ‘metaverse company’, Mark himself described the metaverse as “an internet you’re inside of, rather than just looking at. A place where you or your avatar will be able to get together with friends and family, to work, learn, play, shop, and create”.
Meanwhile, Microsoft has focused its efforts on an “enterprise metaverse” at work. Both Meta and Microsoft’s ideas focus on evolving and improving workplace productivity as well as giving remote work a more interactive and dynamic element, through virtual meeting spaces and the use of augmented reality in shared creative works.
However, for investors, the ubiquity of the metaverse and the technologies required to access it present a number of interesting opportunities for nimble, malleable companies and their potential investors.
Hardware required for immersive, augmented, and virtual, reality experience has to be manufactured by someone, in addition to Meta’s first-party offerings through its acquisition of Oculus in 2014, a number of other companies have set their sights on creating cutting-edge metaverse hardware. Valve’s Index, HTC’s Vive Pro 2, and HP’s Reverb G2, are just a small handful of third-party companies making strides in this technological space.
3D creation software will form the basis of everything that consumers come into contact with inside the metaverse. From landscapes and workspaces to any digital items which are bought or sold within the metaverse, they will all have to be designed, created, and coded into the digital world by some form of 3D creation software.
The materials and components required for creating fully immersive 3D environments and experiences as well as in online networking technologies will form the backbone of the metaverse’s growth. From the raw materials used in the manufacture of semiconductors to the improvements to connectivity required to interact virtually with anyone around the world within the metaverse.
Aside from the investment opportunities themselves presented by a growing metaverse and the companies surrounding it, benefits will be created for individual investors
Investors may be able to view various company prototypes through the application of VR and AR technologies. Interactions between investors and companies may become more immersive via conferences and meetings held within virtual environments, leading to more meaningful relationships between organizations and their potential investors. In short, increased adoption of the metaverse may improve and develop overall accessibility to investing, and help issuers and investors build more meaningful and clear connections.
Investors should recognize and accept the risks associated with investing.
Certain investments may require you to keep your holding for periods of many years with limited or no ability to resell unless there is a strongly regulated secondary market.
You may also have limited access to periodic reporting, see your holdings decrease and increase in value, or even lose your entire investment.
Investors should decide for themselves whether to make any investment, basing this on their own independent evaluation after consulting with financial, tax and investment advisors.
The Knowledge Hub does not constitute financial advice whatsoever, but rather provides basic general industry information.