Metaverse: definitions, applications and potential investment opportunities

Its definition is constantly evolving, its concept is not easy to understand for the layman. Still, the metaverse could lead to major changes for businesses and consumers. “It is clear that we are at the beginning of a change in the way businesses and consumers interact with web platforms,” ​​he says Sung ChoTechnology portfolio manager, one of the sixteen investors in the fundamental equity team of Goldman Sachs Asset Management, which collectively manages over $ 14 billion in dedicated technology portfolios. But what is the metaverse? What are the areas on which it will have an impact? And what are the investment opportunities?

Metaverse: the definitions

The origin of the word metaverse, a synchratic neologism that in the science fiction novel, dates back to 1992 Snow Crash it combined the words ‘meta’ (beyond, in Greek) and ‘universe’. From that moment the term was limited to circulating among enthusiasts and visionaries, remaining mostly unknown to the general public. Until December 2021, when the announcement of the operation of re-branding of Facebook in Meta Platforms the previous October 28 led to the highest frequency of Google searches found globally for the word ‘metaverse’, as evidenced by Google Trends.

“In our opinion, the metaverse is an evolution of the Internet and represents an environment in which permanent and shared 3D spaces exist, connected by a virtual universeCho continues. “Some describe it as the new evolution of digital connectivity, where the value we place on our digital lives begins to outweigh the value of our physical lives.“. Different definitions of the main leaders in the sector, from that of Martin Laupresident of the Chinese tech giant Tencent, according to which the metaverse is “everything that makes the virtual world more real and the real world richer in virtual experiences”. Up to that of the same president and CEO of Half, Mark Zuckerbergwho pointed out that “many people think that the metaverse is about a place, but one way to explain it is to identify it as a time in which an immersive digital world becomes the primary way we live our lives and occupy our days”.

Metaverse: applications

What are the possible uses of this virtual universe? “Currently, examples of use are limited, as we are in the very early stages of development,” says Cho. “However, companies are starting to experiment with some preliminary usesimmersive 3D experiences“. For example, like hangout space and virtual meeting rooms, “Immersive 3D experiences, where users can play and socialize in online spaces using virtual reality technology”. A novelty also applicable to the world of work: “As employees spend more time working remotely over the course of their careers, the virtual spaces provided by companies like Zoom are likely to evolve too,” continues the expert. Another example is that ofentertainment and of live events, from music (including virtual concerts by Ariana Grande, Marshmello and Travis Scott in the video game Fortnite) to sports (with virtual ‘front row’ seats). Finally, the training: “The metaverse can also be inserted in the EdTech context, in the ecosystem of adaptive learning. The teaching materials based on virtual reality offer students immersive learning modalities ”.

Metaverse: potential investment opportunities

Despite the great interest, “direct investment opportunities will have to wait many more years”Cho points out. However, according to the portfolio manager, the eventual take-off of the metaverse could lead to a rapid improvement of the fundamentals for several indirect beneficiaries. Among the companies that could benefit most from it, i social network “Which will probably drive innovation in the creation of virtual spaces”. But also the manufacturers of video games, “Whose market could experience rapid expansion, in light of the increased time consumers spend in virtual environments”. As well as i semiconductors for infrastructurewhich will benefit from data growth in the Cloud and 5G, in addition to Cloud-based infrastructure software and thehardware, which will allow immersive virtual reality experiences. Up to digital payments and mobile wallets“Destined to grow with the expansion of e-commerce into virtual environments” concludes Cho.

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