Capital never sleeps when chasing new and mysterious concepts. In the first half of 2021, when NFT, quantum computing, space travel, etc. dominated public opinion, Metaverse also ended its lurking, igniting its first batch of explosions.
In January, IMVU, a 3D character and scene chat software, received US$35 million in financing led by NetEase. In March, “Meta Universe’s first share” Roblox (RBLX.N) landed on the New York Stock Exchange. The stock price rose from US$45 on the day of listing. 70 US dollars, the current market value of nearly 45 billion US dollars per share. In April, American game developer Epic Games announced the completion of a new round of financing of US$1 billion, with a company valuation of US$28.7 billion.
Eventually Zuckerberg ignited the lead. After Facebook released the second quarter earnings report, the founder and CEO of the company said in an analyst call: “I want to discuss the topic of Metaverse now so that you can see the future we are working on and our company. How will some of the major initiatives of the company achieve this goal step by step.” He said that he hopes to build Facebook into a meta-universe company in the next five years.
The card surface was lifted and exploded to the country. In August, ByteDance acquired Pico, a virtual reality (VR) startup, for billions of yuan, and launched the AI pinch app Pixsoul overseas. At the beginning of September, China Qingbao (300052.SZ), Tom Cat (300459.SZ), Perfect World (002624.SZ), Sanqi Interactive Entertainment (002555.SZ), Changxin Technology (300088.SZ) and other concept stocks welcomed Here comes a skyrocket.
But under the craze, there are still two cold currents. One is that the regulatory authorities have quickly cooled their behavior towards hot spots and speculation in the A-share market. Tom Cat once replied to investors on the Interactive Easy platform on September 8, 2021, that the company plans to enter the field of Metaverse, and stated that “a special working group for the direction of Metaverse has been established to coordinate R&D teams at home and abroad, and for specific categories. The concept development and project approval of the product of the company”, but received an inquiry letter from the Shenzhen Stock Exchange that night, and was asked to explain the company’s current main business, the relationship between the main products and the concept of Metaverse. Rigorous and reasonable.
The second is the calm attitude of some companies and investors. Zhongqingbao issued an announcement stating that Metaverse is a huge concept and model. The company is in the initial stage of exploration, and the concepts touched are relatively shallow. Corresponding products are still being developed. It also stated that “the time and area of new game launches at present Affected by many factors, there is also uncertainty.” After the rise in early September, related concept stocks are gradually pulling back.
It can be seen that, in the perspective of Metaverse, which is profound and vast, but also vague and hollow, the market has gradually begun to rationally consider the actual investment opportunities in this field. Large-scale technology companies with dominant resources are pushing the meta-universe concept into actual products. “Barron’s Weekly” believes that although the current definition of the concept of meta universe has not yet formed a definite boundary in terms of investment value, there is a consensus on some of the characteristics that meta universe should have, and it is far from limited to currently catalyzed online games. And virtual reality, it is possible for investors to dig out the true value of Metaverse in these “consensus”.
Why do giants love Yuan Universe
”Barron’s Weekly” quoted Sentieo’s data and pointed out that compared with 2020, the number of U.S.-listed companies mentioning “Meta Universe” in 2021 financial documents and other company documents has increased by 5 times.
The more representative definition of the meta-universe so far is: a digital virtual world that is parallel and independent of the real world, mirrors the real world, and becomes more and more real. According to the interpretation of Wikipedia, the meta-universe describes the future iteration of the Internet, consisting of a persistent and shared 3D virtual space connected to a perceptible virtual universe; the meta-universe in a broad sense not only refers to the virtual world, but also refers to augmented reality ( AR) including the entire Internet.
There are still many difficulties to be overcome in AR, VR, MR and other technologies. Figure/IC
”The First Unit of the Metaverse” Roblox explained the metaverse more generally with eight elements: identity, friends, immersion, low latency, diversification, anytime, anywhere, economic system, and civilization.
It’s not hard to find that from Neal Stephenson’s science fiction “Snow Crash” in 1992, to the “Oasis” (OASIS) in “Ready Player One”, to the “All-in-One” proposed by Ma Huateng in 2019. “True Internet”, the concept of meta universe has always revolved around the Internet, and large technology companies are the first echelon to perceive the concept of meta universe.
Zuckerberg bluntly said that “Facebook’s future lies in the meta-universe.” For Facebook and other enthusiasts, Metaverse is the next vision of the Internet-in this virtual environment, users are not connected to the Internet, but are in the Internet, and can work, socialize, play, and consume. And interact with the real world-this is not only about their dream of changing the world, but also about how giant companies that face the worries of aging can grow again.
Therefore, even if Metaverse is still in its early stages, some companies can’t wait to board the Noah’s Ark of the Internet. In its August report, “Barron’s Weekly” sorted out the tech giants who are ready to participate in the meta-universe imagination:
Alphabet (GOOGL.N): “Barron’s Weekly” believes that this company is the most in the meta-universe. A good winning position, because Android is very important for future hardware. From the recently acquired consumer electronics and fitness company Fitbit to the smart home company Nest, Alphabet has a number of hardware businesses that connect people to the Internet; high-risk investments such as Waymo’s autonomous driving business and healthcare business are bringing the company closer to the real world. distance.
·Amazon (AMZN.N): The company’s most lucrative cloud computing division, Amazon Web Services, may promote the meta-universe experience; Echo hardware and Alexa virtual assistants, which are already popular in American homes, may also be available Play an important role in helping people navigate the meta-universe.
· Microsoft (Microsoft, MSFT.N): Compared with other companies, Microsoft has survived in the meta-universe. It has Xbox and the popular virtual world Minecraft, and is marketing the benefits of mixed reality to existing customers.
· Facebook (FB.N): Zuckerberg may have aroused people’s interest in the metaverse, but Facebook still has many things to make up for compared with the aforementioned companies. “Barron’s Weekly” pointed out that the company’s best asset in the meta-universe is the Reality Labs business, which contains the results of virtual reality and augmented reality; its Quest virtual reality helmet is gaining more attention, Ray -Ban smart glasses were also launched on September 9. This is one of the company’s early augmented reality products.
Apple (AAPL.N): This is the only FAANG company that does not directly mention Metaverse in its earnings conference calls and events, but CEO Tim Cook has been since 2016 Always praised augmented reality. It cannot be ignored that Apple’s products have created a unique ecosystem. “Barron’s” believes that as long as consumers are willing to stay in the Apple ecosystem, the company’s hardware and software advantages are likely to become its competition in the meta universe. Advantage.
In September, Goldman Sachs analyst Eric Sheridan listed the top ten thematic trends for the growth of Internet giants in a report on technology stocks, including “augmented reality and meta-universe”, and , The other nine themes are more or less related to the meta universe. They are: the blurring of boundaries between e-commerce and advertising; the rise of the creator economy; streaming media has reached a global scale, but with content cost issues; local business online Changes; subscription-based services growth, but with potential consumer fatigue; the growth of cloud computing; more personalized online travel services; the growth of regulatory costs; and the rise of decentralized networks. Sheridan wrote: “In the next few years, with the help of the expansion of the industry, Internet giants will still have ample opportunities to significantly improve performance growth and operational efficiency.” The
vigorous vitality of the meta universe concept has given large technology companies new opportunities. Strategic tools and narrative logic. They either incorporate existing related businesses into the galaxy of the meta universe, or start new businesses or advance investment and acquisitions based on their blueprints. Under the impetus of these technology giants, you may already be in the meta universe.
The game industry carries the primary form of the meta universe, but it is far from the end
At the moment, one of the most mature business models of Metaverse appears in the game industry. Roblox, Epic Games, Zhongqingbao, Tom Cat, and Perfect World have all gained capital blessings by taking advantage of this concept. This concept has its inevitability — online games rely on the Internet to build a virtual world that can be entered and exited at any time. Players’ interaction brings identity and social attributes, and can communicate and even trade. The application of augmented reality and virtual reality technology will The two-dimensional space is transformed into a three-dimensional system with a more real sense of experience…Here, looking at the eight elements defined by Roblox, the meta-universe seems to be real and reachable.
Not everyone is attracted by the hype of the meta-universe concept. “Grand Theft Auto” (Grand Theft Auto) publisher Take-Two Interactive Software (TTWO) CEO Strauss Zelnick (Strauss Zelnick) told the “Barron Weekly” that Metaverse “compared to different People have different meanings,” he said: “The company’s games have long allowed people to integrate into roles, express themselves, and get happiness from them. Whether the world in these games will become a place for you to buy real estate or conduct transactions remains to be seen. Observation.”
Such voices of wait-and-see, hesitation, and even doubts are widely present in the disagreement with the “immersion”, “low latency” and “economic system” of the aforementioned eight elements of Roblox. These views believe that Metaverse is actually a “fried rice” behavior by technology companies to re-propose AR and VR technologies. Corresponding to “immersion” and “low latency”, there is no more disruptive technological innovation.
It seems to be the case at present. Taking Roblox as an example, even if this open game platform has built a relatively mature ecology in the consumer meta-universe field, the technical difficulties are still being overcome. Xing Jie, one of the co-authors of “Meta Universe Token” and a senior expert in industry, finance and governance, told the Chinese version of “Barron Weekly” that because AR, VR, and mixed reality (MR) are still far from reaching the technological turning point, the game will not High fidelity and immersive video effects have not been achieved; he predicts that this turning point may appear in the next three to five years.
Compared to the above cautious and optimistic view, Roblox’s market views are not rare. Jefferies analyst Andrew Uerkwitz questioned the company’s long-term possibilities in August 2021. In addition to not being optimistic about Roblox’s ability to attract user groups other than young players, and the regulatory risks that may be faced in the process of opening the Chinese market, Erkowitz believes that even if “meta universe” is mentioned 15 times in the prospectus, Roblox The current core still revolves around video games; under the premise that this foundation will not change soon, Roblox may be more suitable to be called an “experience platform” than Metaverse.
In terms of the “economic system”, in the short to medium term, the attitudes of various countries towards the underlying cryptocurrency of Metaverse may adversely affect game companies involved in this concept. Xing Jie told the Chinese version of “Barron Weekly” that in the meta-universe economic system, the most important foundation is the token economy of the blockchain; there is no meta-universe based on the blockchain token economy, just like a market without a modern financial system. The economy is the same, it is difficult to have a big development. Under the trend of increasingly strengthened supervision of blockchain technology and cryptocurrency in various countries around the world, the certainty of the meta-universe economic system and business model is pending to a considerable extent.
Returning to the real world, the “money path” of Metaverse has also been controversial. Venture capitalist Matthew Ball once proposed in 2000 that the interaction of the physical world and the virtual world may inevitably form a mature economy. This seems very utopian, but some app developers have seen this as a strategic lever to circumvent the heavy commissions Apple charges them.
Earlier in 2021, Epic Games and Apple launched a historic antitrust war in court. Epic Games CEO Tim Sweeney quoted Stephenson’s novel in his testimony. The concept of “meta universe” says: “meta universe is a real-time, computer-driven 3D entertainment and social media, in which people in the real world can enter 3D simulations together and have a variety of experiences. He deliberately chose “Meta Universe” as a metaphor for his company’s game “Fortnite” (Fortnite), this multiplayer game was banned by Apple from its iOS App Store in 2020.
Benjamin Bertram Goldman, the head of the film department of the design company InVision, believes that this ingenious corporate strategy exaggerates an atmosphere of “survival threat” for the company, making Apple unrealistic. The commercial behavior of the company has been pushed into the spotlight. He added: “The birth of the virtual shopping world suddenly makes this company that charges 30% commissions considered absurd. Its final state is incompatible with Apple.” The verdict announced on September 13 local time showed that Epic Games Only in the complaint that “the inability to use third-party payment mechanisms in the app violates California’s fair competition law” was successful, and it was defeated in all other respects.
While the game industry is cautiously searching for a balance with the meta-universe, some new developments are breaking through the margins of the meta-universe, allowing investors to shift their attention from games to other application scenarios. For example, when Gucci held the centennial exhibition “Gucci Garden: Archtypes”, it not only held an offline exhibition in Piazza della Signoria in Florence, Italy, but also held a virtual exhibition on Roblox. . Roblox data shows that in the two-week experience, Gucci received about 20 million visits and hundreds of thousands of users purchased multiple items.
In mid-August, Facebook released a virtual reality video conferencing software called Horizon Workrooms, which aims to make the experience of remote office meetings more real. Although company executives said that this private beta version of the software is not and does not want to become Metaverse, the hardware Quest 2 it contains is essentially a component that realizes the final form of Metaverse. This makes the industrial chain investment opportunities spawned by Meta Universe seem more within reach.
The certainty of Yuan Universe’s investment is emerging, but large-scale commercial avenues are hindered and long
Back to Zuckerberg, who detonated the first year of the meta universe, his investment in this field can be traced back to 2014 when Facebook acquired the virtual reality headset manufacturer Oculus Rift for US$2 billion. Today’s Facebook is still biased towards investment in hardware and the upstream industrial chain. Futurum chief analyst Daniel Newman (Daniel Newman) once said: “For Facebook, make meaningful investments in technology, deepen user connections, and create more ubiquitous spaces between the real world and the digital world. It is a logical development path.”
In fact, people’s lack of sense of the meta-universe is largely due to the lack of basic conditions for forming, especially in terms of infrastructure and hardware systems. Newman told Barron’s: “Although virtual reality technology has made progress, due to the limitations of equipment and cost, and the software that requires intensive calculations, we have not been able to fully immerse in it so far.”
However, this in turn also means Therefore, once the concept of Metaverse is further promoted and implemented, the value of investment in related fields will be reassessed. Xing Jie believes that the upstream and downstream industries of infrastructure, such as 5G, cloud computing, edge computing, artificial intelligence, Internet data centers, blockchain, and the AR, VR, and MR related software and hardware industries that drive the entrance of the meta universe, are expected to be in this process. Benefit from it.
Yi Huanhuan, the co-author of “Meta Universe” and “Meta Universe Token” and chairman of Yi Share Tianxia Company, is more optimistic about upstream equipment manufacturing and parts companies, especially Chinese companies. For example, at the equipment entrance, global VR equipment The OEM leader Goertek (002241.SZ) has a market share of up to 70%, and it will have the opportunity to take a share of the meta universe.
This opportunity may come sooner than imagined. Yi Huanhuan quoted the predictions of the China Academy of Information and Communications Technology and pointed out that between 2022 and 2025, the upgrading of equipment performance will greatly accelerate the construction of Metaverse infrastructure; after 2026, with the improvement of infrastructure, virtual reality will be fully immersed. In the stage, the improvement of user experience will lead to the explosion of meta-universe content. At that time, the hardware and upstream companies that enter the bureau first can use the technological moat to open up ways to increase performance.
Newman took Facebook and Microsoft as examples to point out that the two companies have acquired assets such as Oculus and AltspaceVR respectively, and developed mixed reality smart glasses internally, established a virtual platform, and have accumulated a large number of augmented reality and virtual reality assets. These are likely to be transformed into real benefits in the future.
However, Newman added that so far, despite billions of dollars in investment and a lot of publicity, Metaverse hardware and upstream industries are still niche businesses. Yi Huanhuan also said that technology takes a long time to iteratively develop. This means that hardware and upstream industries may face insufficient investment, which will limit large-scale commercial promotion.
Specific to the Chinese market, in Xing Jie’s view, Yuan Universe companies still need to pay attention to competition with American companies. He pointed out that the United States is still the world leader in innovative cutting-edge technologies, and the main key technologies in the fields related to the six major technological pillars of the universe, BIGANT (blockchain, interaction, games and engines, artificial intelligence, intelligent networks, and the Internet of Things) The high probability of the breakthrough will still be achieved by American companies; Chinese companies may achieve breakthroughs and lead in individual fields, such as communications and artificial intelligence.
Yi Huanhuan said that in any field where the penetration rate of any industry is rapidly increasing and the capital market is heated up, the phenomenon of over-investment is particularly prominent. In the period of rapid development of the industry, a mixture of fish and dragons may bring chaos, and the cooling of the macro level will more quickly pierce the bubble caused by the concept of cutting leeks. These risks are also worthy of vigilance.
As Zuckerberg said, the metaverse is changing the Internet itself. From upstream manufacturers, midstream content and platform companies, to applications in downstream scenarios, Meta Universe is undoubtedly ongoing. The market has reason to expect that under the premise of technological breakthroughs, increasingly perfect infrastructure, and more mature and clear supervision, the world mapped by Metaverse will be more real. Until then, what investors need is strategic optimism, as well as sufficient tactical vigilance and patience.