Ever since Mark Zuckerberg decided to try and raise his company’s cool factor by renaming it from Facebook to Meta Platforms (NASDAQ:FB), a lot of folks are scrambling to figure out: What is the Metaverse? And most importantly, what does it have to do with me?
If you’re a gamer, you pretty much know. The Metaverse is a digital place to hang out, whether with IRL friends or with friends you make online.
Not only can your digital avatars chat and play together, these days you can buy and sell from each other, thanks to the rise of non-fungible tokens (NFTs), typically purchased with cryptocurrency. That’s great for gamers, who may be able to trade away their in-game purchases as they go… And it’s especially great for game developers, who can monetize their skills independently from the big studios.
But outside of gaming, there are plenty of applications for Metaverse technologies. Add them all up, and you start to see how the Metaverse could become worthy of the hype – and why investors should take notice. Let’s look at a few now.
Education in the Metaverse
For teenagers and young adults, the phrase “digital native” has taken on a whole new meaning. Three-quarters of American kids under 18 are gaming at least once a week (along with two-thirds of adults), according to the Entertainment Software Association. And our students are fresh off a year or more of online schooling, courtesy of the global COVID-19 pandemic.
But the limitations of Zoom classes and homework on Google Classroom or Blackboard couldn’t be more glaring at this point. As kids flock to Metaverse games like Roblox (NYSE:RBLX) in their spare time, why not utilize a platform that actually engages them?
This logic has certainly not been lost on Roblox, as EducationWeek reported in November:
Roblox is a $67 billion company by market cap. And its users already average two and a half hours on-platform each day…send more messages than all of Whatsapp (60 billion daily versus 50 billion)…and nearly half are age 13 or younger. It’s a no-brainer for Roblox to drop $10 million to “find and reward developers and organizations who can figure out how to really lean into our great physics, strong immersive 3-D capabilities, and multiplayer experiences to teach in a deeper way,” as they put it to EdWeek.
First steps are online modules for computer science, robotics, and space exploration, as well as designing video games, courtesy of nonprofits like Boston’s Museum of Science and FIRST Robotics.
Meanwhile, in academia, the Korea Advanced Institute of Science and Technology (KAIST) says “the Metaverse is coming” to universities, too. By 2023, KAIST plans to use Metaverse technologies at its new campus in Nairobi, Kenya. Rather than waiting for KAIST to build out a local faculty from scratch, students will attend classes right alongside their Korean counterparts in a virtual campus.
Real Estate in the Metaverse
One day, those students may be able to make a living or even invest in real estate via the Metaverse. Virtual “land” is already up for sale in Decentraland (CCC:MANA-USD), where purchasers trade MANA coin for an NFT representing part of Decentraland. You can then become a landlord to virtual stores, museums, casinos, festivals, and whatever users dream up next.
This is the key difference from earlier virtual worlds, like Second Life in the 2000s. The Metaverse is not just a time-suck; you can monetize your experience there. That’s already starting to happen – not only with the little people like us, but big names from Gucci and Louis Vuitton to Justin Bieber.
But here’s what makes me sit up and take notice: Metaverse companies are also involved with actual, tangible real estate.
Matterport (NASDAQ:MTTR) is a prime example. Rather than brightly colored, highly stylized worlds, Matterport serves up 3D capture – a “digital twin” of a real-world place. Finally, we can move away from “painting” digital graphics by hand to, simply, taking photos.
Matterport attracted plenty of notice for being Zuckerberg’s photographer of choice for his Metaverse plans. But before that, you were most likely to hear about Matterport from your realtor. That’s because (physical) real estate – modeling properties on sites like Redfin (NASDAQ:RDFN) – makes up a good two-thirds of Matterport’s business. Below we see some of these clients, as well as its newest venture: the public sector.
Source: Matterport Q3 Earnings Presentation
Since last May, you’ve been able to use the Redfin app to take their 3D tours right on your iPhone. Now imagine meeting up with your realtor, your spouse and family for a true, interactive virtual showing. Ask questions; peek into the attic together; discuss what you see. Think of how much more efficient your search for a new home becomes… And how many potential buyers you can invite into your home – on demand – through the Metaverse.
All in all, Matterport sees a $240 billion total addressable market, still in its very “early stages.”
Live Events in the Metaverse
Tired of missing concerts, whether from COVID or just not having the right venues nearby? Before you know it, I expect you’ll have the option to attend just about any show you want in the Metaverse. It’s still early days, but already, you can see an interesting range of artists – from more grassroots acts at Decentraland’s Metaverse Festival… to big DJs like Zedd and DJ Snake or deadmau5… as well as pop stars like Bieber and Ariana Grande.
Sports leagues will get in on the action, too. Unity Software (NYSE:U) will collaborate with UFC to bring mixed martial arts (MMA) fans the “ability to see every bead of sweat, blow, takedown and submission, as if they were going toe-to-toe on the famous Octagon canvas themselves,” all within a Unity Metacast.
Source: Unity Technologies
Unity’s Metaverse sports division is headed up by former CEO of the Liverpool Football Club, Peter Moore. Ironically, their rival team, Manchester City, is getting into the Metaverse game as well, with a virtual stadium. Created by Sony, it’ll be “an exact replica” of the physical Etihad Stadium, the crown jewel of Manchester’s SportCity.
If football clubs can pull this off, it’s not hard to imagine, here in the United States, attending the Super Bowl in the Metaverse.
With Super Bowl attendance way down in 2021 – and streaming up 47% for Super Bowl LV – I can see the NFL finding it worthwhile it to augment the virtual experience. After all, now that COVID forced more fans to stay home, munching their favorite varieties of hot wings and nachos from the comfort of their own couch, many will find a Metacast to be a more appealing option.
Working in the Metaverse
If Silicon Valley has its way, you’ll be doing a lot more than watching the game or attending a concert in the Metaverse, though.
NVIDIA (NASDAQ:NVDA) has much bigger ambitions than simply providing the graphics processing units (GPU) for other people to develop Metaverse experiences. NVIDIA is getting involved itself with its Omniverse project.
In our work lives, the Metaverse is an opportunity for executives, engineers, and creatives to meet from anywhere in the world – in a more robust, concrete way than being just another “talking head” on a Zoom call.
That’s why Nvidia CEO Jensen Huang says: “A constant theme you’ll see — how Omniverse is used to simulate digital twins of warehouses, plants and factories, of physical and biological systems, the 5G edge, robots, self-driving cars, and even avatars.”
Today, 500 companies and 70,000 developers are taking the Beta version of NVIDIA Omniverse for a spin. BMW (OTCMKTS:BMWYY) is using it to build a digital-twin factory; Ericsson (NASDAQ:ERIC) is building digital twins to perfect worksites for the 5G infrastructure buildout. Below we can see an Ericcsson 5G tower through the eyes of one of its engineers, within the Omniverse. Here, different signal strengths can be represented visually; if the engineer flew out to the physical site, those same signals would, of course, be invisible!
Source: NVIDIA (YouTube)
When you attend a meeting with your Omniverse Avatar, the platform can use artificial intelligence (AI) to translate your words into French, German, and Spanish as you speak.
NVIDIA’s AI application, the Omniverse Replicator, is going into robotics systems at factories, to simulate new processes and allow engineers to work “right on the factory floor.”
Omniverse Replicator is also enabling new AI chat bots for customer service. In its November virtual presentation, NVIDIA showed off a restaurant kiosk you could speak to, watch the customer-service avatar take your order, and interact with it along the way.
And because NVIDIA is pushing so heavily into autonomous vehicles, we may be able to interact with our cars much the same way. A far cry from the “young guy holed up in his basement playing games,” Metaverse users could find these applications fitting seamlessly into nearly any part of our day.
Will every aspect of our lives be integrated into – and improved by – a Metaverse experience? Probably not. But if you build it in the Metaverse, some people will come. And they’ll spend their money doing so.
Weddings are a perfect example. Many of us prefer to actually celebrate with friends and family IRL, versus a livestream, and always will. But brides and grooms may still add on a Metaverse virtual event so people can attend their big day from anywhere in the world. Already, people are holding Metaverse weddings through a company called Virbela, and paying “a few thousand dollars to well over $10,000” for it!
And unlike what we have now with “Web 2.0,” the “Web3” of the Metaverse will just be a part of daily life… rather than drawing us away from our “real lives.” We’ll be able to socialize, buy, sell, learn, and work within the Metaverse, anytime, anywhere we choose. The utility of that – its network effects as more and more people wake up to this – is just too good for us, as investors, to ignore much longer.
On the date of publication, Ashley Cassell did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.