How to Invest in the Metaverse

Investing in the metaverse is becoming a topic of primary interest for many, also thanks to the major media campaign that Meta has started a few months ago to disseminate the concept to the widest possible population.

We cannot yet clearly grasp all the aspects of the metaverse, a matter that is shapeless by nature and in continuous evolution, but one thing is certain: few innovations have been able to attract attention and embody expectations like the technological creature that caused Facebook to change its name to Meta Platforms.

Investing in the metaverse, things to understand

First of all, let’s remember that the metaverse is a virtual world in which users can move as avatars and interact, socially and economically, with other people.

It is a persistent space, an immersive ecosystem made of virtual reality, augmented reality, 3D technologies: in a word of what is defined as mixed reality (a coinage that can be ascribed to HP, a company with a great technological tradition which, moreover, is not actively engaging in the metaverse).

So an "in between" world made up of software and physical elements, programs and viewers, networks and computers.

While for many, the metaverse represents the evolution of the Internet in the coming years, with infinite potential, adoption either won’t necessarily be easy or won’t happen overnight. Bloomberg estimates it will be an 800 billion dollar industry, requiring increased processing capacity, bandwidth and technological improvements: networks, headsets, computers, smartphones and cloud services .
And it is precisely the shares of the companies that make these technological components, i.e. those who are building the future of digital assets, that are the object of attention of those who want to invest in the metaverse.

How to invest in the metaverse: Meta and Microsoft

Talking about investing in the metaverse, therefore, is equivalent to referring to Meta.
It should be immediately noted that the month of October 2022 marked a critical point for Mark Zuckerberg’s company, which recorded a 57% drop in the share compared to a year earlier (from 300 to 130 dollars).

Blame the metaverse? Some like to think so. In reality, Meta is suffering from a physiological decline of the "mother product" (i.e. Facebook) which is targeted as a reference social network for the largest portion of the world’s population by the star of TikTok.

So perhaps Meta’s problem lies not in what is new and what will come, but in what has been. Certainly the investments and the affirmation strategy for the metaverse, especially with the material tools (the Oculus viewers that evolve with the Quest Pro version) testify to a solid strategy, which has the strength to call upon itself other players in the technology market, especially companies that want to make money with the metaverse and those that are investing in it, such as Microsoft, which in turn is creating a metaverse through its Mesh communication platform. We can define the one between Meta and Microsoft as a clear alliance. Microsoft CEO Satya Nadella has publicly described himself as a "metaverse enthusiast".

If it is almost obvious to imagine that Xbox games will be integrated with the Quest line of viewers, it is less to think that Microsoft products such as Windows, Office (now called Microsoft 365) and Teams will be enhanced with virtual reality functions and mixed. And in video conferencing people’s faces will be able to mix with avatars.

Zuckerberg and Nadella’s idea is precisely to transform video calls into relationships between avatars. Remote work that changes appearance, but also metaverse, which can also be used without headsets: the Horizon Worlds virtual reality platform can also be used from the web. Which means open the metaverse to any device.

Investing in the Metaverse: Other Stocks

The necessary and sufficient presence of Meta and Microsfot to invest in the metaverse, doesn’t rule out other big tech companies. All the big tech sector can be said to be involved in attracting capital in the metaverse.

Amazon is planning to launch mixed reality products (augmented and virtual) and meanwhile launched "AWS Cloud Quest", an online role-playing game to help people develop cloud computing skills . It works like this: Users navigate a virtual city, helping its inhabitants solve cloud-related IT problems and earning points for completing simulations and puzzles.

Not enough information to measure Jeff Bezos’ effort in the metaverse, but enough to say that the company will have the ability to ride the tiger when needed.

The other great big tech that is firmly betting on the development of viewers to use the metaverse is Apple.

Also in the case of the Apple house, it is a question of creating a mixed reality device, which blends augmented reality with virtual reality. It will be available in 2023, probably under the name "Reality" and will be the first in a product line aimed at the metaverse.

The metaverse is not only made of products, but also of "engines". Among the largest tech component manufacturers are Intel and Nvidia, and both have a clear position on the metaverse.

Intel takes a prudential view and makes its own distinctions saying that we need more powerful processing capacity, accessible at much lower latencies, across a multitude of device form factors. And to enable these capabilities at scale, the entire pillar of the internet will need major upgrades.

Nvidia, on the other hand, enthusiastically pushes on the accelerator, releases new GPUs, explicitly directing them to the necessary graphics processing to participate in the metaverse, and also thinks of an industrial use, proposing a partnership with Siemens for the creation of an immersive technology to be used for design. Metaverse not for fun, therefore, but to enhance production in the future.

Metaverse, investment portfolios

Instead of focusing on individual large companies, the path of investment portfolios can also be chosen to invest in the metaverse. They are packages of selected assets that allow you to bet on a market as a whole rather than just one specific stock, and benefit from market performance as a whole.

Technically it is a thematic trading which with a periodic rebalancing aims to obtain the maximum return for the investor.

One example is eToro, social investment network, which created MetaverseLife, a metaverse-themed Smart Portfolio that offers investors long-term exposure to key projects, both equity and crypto-assets, in the metaverse industry.

The MetaverseLife portfolio consists of stocks and crypto-assets that intend to represent the very essence of the metaverse.

It is weighted most towards the enabling platforms that will create the various types of metaverse, such as the shares of Meta Platforms and Roblox, as well as towards crypto-assets or blockchain-based metaverse platforms such as Decentraland, Sandbox and Enjin.

The portfolio also contains some tech industry names who are working on wider metaverse adoption such as Amazon, Apple, Microsoft and Nvidia, as mentioned above.

Venture capital specializing in the metaverse

Venture capital is also investing in the metaverse. At the moment it is the aspect of gaming that mainly attracts attention, as confirmed by the analyzes of the research company Analytics Insightm, which indicates the reference venture capital.

Venture capital Animoca is aimed at that part of the blockchain industry that looks to gaming in the metaverse (it launched Sandbox and raised over $350 million this year), on a par with Hiro Capital and of GameFi Capital, which targets blockchain, crypto projects and games, of Outlier Ventures, which supports the project of an open and inclusive metaverse by a billion people, and of Play Ventures, an early stage venture capital firm that has committed $100 million to the development of a game in the metaverse.

A departure from this logic is Fov Ventures, a fund specializing in startups in the early stage metaverse that look to the corporate market (for training, collaboration and digital twins), followed by the English IQ Capital which has invested in enterprise VR startups and is targeting advertising in the metaverse, while Metaverse Ventures invests in companies that are building products and services for the decentralized metaverse.

Original article published on Money.it Italy 2022-12-04 15:21:02. Original title: Come investire nel metaverso