Radnor News / Blog


Tue
3/22/22

posted by: Radnor Financial Advisors

The Metaverse

“The next platform will be even more immersive — an embodied internet where you’re in the experience, not just looking at it. We call this the metaverse, and it will touch every product we build.”  Mark Zuckerberg, CEO Facebook

Last October Facebook changed its name to Meta and announced it would focus on the next big thing, the metaverse.  Microsoft recently purchased Activision for nearly $70 billion to expand its interactive entertainment presence.  Goldman Sachs analyst Eric Sheridan recently suggested the metaverse could be as much as an $8 trillion market opportunity.

So what is it?  The metaverse is a sort of virtual, online world.  It is a digital space that provides users access to virtual reality and augmented reality experiences.  You interface with the metaverse using hardware such as a PC, smartphone, or game console, while utilizing accessories such as virtual reality headsets or augmented-reality glasses.

But what do you do in it?  On most platforms, a person with a presence in the metaverse is represented by an avatar (think of an animated character) that virtually represents you (you see, hear and sometimes feel the same things your avatar does).  Popular activities in the metaverse include paying games, building 3-D virtual environments, and attending virtual concerts.  On many platforms, your avatar can buy things (such as virtual clothing and special powers — the real world doesn’t apply here, so you can purchase things such as the ability to fly).  There are also virtual neighborhoods with virtual homes on platforms like Decentraland and the Sandbox.

From a business perspective, corporations are looking at the metaverse as a potential way to train employees and for employees to interact and problem-solve.  Companies can host on-line meetings, enact product demonstrations, enhance communications, and encourage innovation.  There are also potential implications for the retail space, as it can allow shoppers to visualize a product they are considering in an environment that resembles their home or office.

While there is a lot of hype and excitement about the metaverse, we are still in the early stages.  This makes it difficult to know which companies might prosper from the metaverse (although it will certainly require things such as computing power, high speed internet access, and content).  Investment opportunities will develop over time and some companies will execute and provide shareholders with value.

While the foundations of the metaverse are already here, it is expected to significantly evolve over the coming years and become another technology investment opportunity.

 

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Michael N. Mattise

Managing Partner, President,
Chief Investment Officer

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