It’s the next evolution of the internet.
It’s the talk of the town among Silicon Valley insiders and wealthy venture capitalists.
And as I’ll show you, it’s a chance for regular folks to make fortunes from the next wave of internet profits.
It gets its name from a 1992 novel by New York Times bestselling sci-fi novelist Neal Stephenson.
The book is called Snow Crash. And its characters interact with each other as avatars – or online personas – in a 3D virtual world with its own economy.
Today’s real Metaverse combines VR (virtual reality) headsets with the latest in gaming and social media… as well as cryptocurrencies, NFTs (non-fungible tokens), and other decentralized blockchain apps.
Here’s how Facebook (FB) chief Mark Zuckerberg described it in a speech in June…
You can think about the Metaverse as an embodied internet, where instead of just viewing content – you are in it […] It’s going to be accessible across all of our different computing platforms: VR and AR, but also PC, and also mobile devices and game consoles.
And Zuckerberg is putting the full weight of Facebook behind this new, more immersive version of the web…
If we do this well, I think over the next five years or so, in this next chapter of our company, […] we will effectively transition from people seeing us as primarily being a social media company to being a Metaverse company.
That’s a huge deal. Facebook is the fifth-largest company in America by market value.
So make no mistake… the Metaverse is on the cusp of going mainstream. And as I talk about all the time here at the Cut, that’s the sweet spot for us as investors.
We won’t switch on the Metaverse one day and then switch off the current version of the internet.
It’s not some giant software update that will happen overnight.
Just as the mobile Web built on and transformed the Web we accessed via our PCs and laptops… the Metaverse will build on and transform today’s internet.
If you have young kids, you’ve probably already come in contact with it in its early forms.
I’m talking about Fortnite, that cartoony video game teenagers can’t stop playing.
It’s made by North Carolina-based video game developer Epic Games.
And as of Epic’s last player count in May of last year, the game has more than 350 million registered players.
Epic also revealed that, together, players logged 3.2 billion hours playing Fortnite in April 2020 alone.
It started out as a “battle royale.”
You create an avatar, parachute onto a virtual island, build defenses, and shoot your opponents. The last player alive wins.
But last year, Epic added a new “Party Royale” mode to the game. This is closer to an immersive 3D social network than a shoot-em-up game.
It takes place on a smaller island in the Fortnite virtual world. It’s gun-free – allowing players to relax and hang out with their friends.
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A player’s avatar enters Fortnite in Party Royale mode. Source: Epic Games
The game makers have made this mode even more sociable by adding amenities such as soccer fields… racecourses… and a drive-in movie theatre.
There’s even a virtual nightclub where players can dance and listen to music.
Last year, rap superstar Travis Scott performed there for five in-game events.
Scott was due to perform (in real life) at the Coachella festival last summer.
That got canceled due to COVID-19. But Scott’s virtual Fortnite gig made up for his fans’ disappointment…
More than 27 million players entered the game to watch his virtual concerts… including more than 12 million at the first virtual concert.
Of course, it wasn’t Scott they saw exactly. It was his digital avatar.
Sometimes it looked like Scott. But it also morphed into a cyborg… a deep-sea diver… and a neon humanoid.
At one point, a giant Scott avatar shook the ground and made all the player avatars leap into the air.
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Travis Scott’s avatar during one Fortnite concert. Source: Epic Games
Hollywood’s biggest names are also getting involved.
Emmy-winning director J.J. Abrams dropped by the Fortnite island, via avatar, in December 2019 to show off a clip of his new Star Wars movie at the virtual drive-in theater.
Since Teeka Tiwari’s analyst Grant Wasylik put it on my radar in an excellent essay at our Palm Beach Daily e-letter, I’ve been down a Metaverse rabbit hole.
The more I discover… the more I feel my age. I’m 45. Like many readers, I remember the world before the internet, smartphones, and virtual computer worlds.
But I’m also fascinated about what I’m learning… and not just from the technological point of view.
This is also the kind of bleeding-edge trend you can make a fortune from.
As regular readers will know, I’m not a big fan of Facebook’s business practices… or the Zuck.
Nevertheless, Facebook is one of the biggest tech companies in the world. If it gets involved, that will be a catalyst for wider adoption.
Facebook has already invested in the Oculus VR platform.
Now, it’s building a virtual world called Horizon.
And it’s not just for folks in their teens and 20s.
Facebook has already debuted an app for adults called Horizon Workrooms.
It allows 16 people to use VR headsets to gather in a virtual meeting room as their avatars.
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Meeting participants’ avatars in a Horizon Workroom. Source: Facebook
Users say they prefer meeting as avatars because they no longer have to show themselves… their home offices… or their kids and their dirty laundry… to their work colleagues.
As most of us know after the long and grinding COVID-19 lockdowns… showing those things on camera can be stressful.
Instead, folks meeting in Horizon Workrooms can show up as their avatars and focus on the content of the meeting.
As Teeka says, to make a fortune without already having a fortune to invest, you have to spot a market megatrend early on… and stick with it.
And the Metaverse checks the boxes of a megatrend in its infancy.
So expect more from me on the Metaverse next week.
We’ll explore how economies in these virtual worlds meet real-world economies. And we’ll look at how blockchain, cryptos, and NFTs fit into the picture.
In the meantime, here’s the recommendation Grant passed along to Palm Beach Research Group folks…
The companies that will dominate this space are in their startup phases. In fact, we’re so early that some of the dominant players in this space may not have been born yet.
But if you want exposure to this trend, consider Big Tech players like Amazon, Google, Facebook, and Roblox (RBLX). Companies like these will lay the groundwork for the intersection between virtual and real economies.
If you want broader exposure, consider the Roundhill Ball Metaverse ETF (META). It holds 50 globally listed companies – including Roblox, Tencent, and Microsoft (MSFT) – actively involved in the Metaverse.
And remember, if the Metaverse is making your head spin… that’s a good thing.
As Grant has been reminding folks, it shows this trend is still off most mainstream investors’ radars. So you still have the chance to get in before the crowd catches on – when you can profit the most.
Regards,
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Chris Lowe
September 2, 2021
Dublin, Ireland