In this chapter, we’ll discuss the technology behind the metaverse, and which companies stand to profit if the trend takes off.
The Hardware Required to Make the Metaverse Function
Unlike modern websites and games - which we interact with on our 2D device screens - the metaverse will be made up of a variety of 3D virtual worlds.
Because of that, the only way to truly participate in the metaverse is through the use of 3D virtual reality goggles.
On the one hand, some believe this could lead to a Matrix-like dystopian future where humans spend the majority of their time “plugged in” and out of touch with reality.
On the other, both gaming and social media have become wildly popular, and many see the metaverse as the next evolution of both technologies.
Virtual Reality Headset Companies
Regardless of one’s beliefs, entrepreneurs understand there’s serious money to be made selling the “picks and shovels” required to make an industry function.
And when it comes to the metaverse, virtual reality headsets are the “ticket” required to gain entrance.
Because of that, it should come as no surprise Meta is leading the pack when it comes to VR headset sales. In fact, a 2022 article showed Reality Labs (which Meta owns) generated almost $3 billion in sales of its Oculus Rift VR headset in 2021 alone.
Further, Google, Microsoft, Samsung and a variety of other companies are investing resources into launching their own, competing products.
Gaming Companies Stand to Profit Big
Because video game worlds are the closest thing we have to a modern-day “metaverse,” many see game production studios as a major beneficiary of the metaverse trend.
And nowhere is that more obvious than Microsoft’s $69 billion investment to acquire AAA gaming studio Activision.
Along the same lines, investment research companies believe game development companies like Unity - which hosts 1.5 million game developers - could be a good option for investors looking to cash in on the metaverse trend.
Investing in the Metaverse’s Infrastructure
Despite this, not every company working on the metaverse is a gaming company.
In addition to power players like Meta and Microsoft, a variety of companies are building their own versions of a decentralized metaverse and selling virtual land as their monetization plan.
As an example, metaverse company Decentraland has upwards of 97,000 virtual plots of land listed on Opensea. Admittedly, the cheapest plot of land costs 4.6 Ether, equivalent to $12,420 as of this writing.
With that said, similar to commercial real estate, owners will be able to monetize their virtual land in the future by creating attractions metaverse participants can spend virtual money at.
The same goes for The Sandbox, which has over 117,000 virtual plots of land listed on Opensea (at a starting price of 3.5 Ether, equivalent to $9,450 as of this writing).
Fashion Companies Want in on the Action
In what many see as a surprising embrace, fashion companies are hopping on the metaverse trend in a big way (including the launch of the first metaverse Fashion Week in March of 2022).
As an example, Nike recently purchased virtual shoe company RTFKT to help them create virtual collector’s sneakers (which, once again, will be sold as NFTs).
And in a similar move, gaming giant Fortnite recently announced a partnership with luxury retailer Balenciaga to create a line of virtual clothing. Clothing that in all likelihood will be used to dress the NFTs people use as their virtual avatars in the metaverse.
Artists Selling NFTs
And it’s not just mega-brands looking to get their slice of the (future) metaverse pie. Instead, some artists are cashing in now.
While buyers might not be able to use them in the metaverse quite yet, NFT avatars (known as PFPs or Profile Pics) became a hot trend in 2021.
In fact, thanks to NFTs, many men and women went from starving artists to millionaire status.
Admittedly, skeptics believe most NFTs will become worthless over time. However, with the metaverse years (if not decades) away, it’s safe to assume digital artists will continue to cash in on the NFT avatar trend.
The Underground Plumbing
If you know anything about gaming, you know today’s top games require special, high-performance (and highly expensive) computers to operate at peak capacity.
Mainly because the graphics cards included in everyday laptops/computers aren’t capable of handling the extreme processing power required to deliver smooth 4K graphics in a highly dynamic virtual world.
Along the same lines, delivering a visually impressive metaverse experience will require similar amounts of processing power.
Because of that, blockchain companies like Render are taking steps to crowd-source the processing power required to render trillions of bits of digital data in HD / high fidelity.
The same goes for blockchain companies like Arweave, which provide the virtual hosting infrastructure metaverse participants can use to securely store NFTs and other digital assets.