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What is Metaverse?

Last week, CEO Mark Zuckerberg announced Facebook Inc. will now be known as Meta Platforms Inc. or Meta for short. Zuckerberg decided to focus on the future of his company on an innovative technology commonly referred to as the metaverse. The social network portion of its business or Facebook will become one of Meta’s subsidiaries aside from the others such as WhatsApp, Instagram, etc.


Meta in Greek is the word beyond. The verse comes from the Latin word vertere, which translates to turn. When combined, the Metaverse Universe is loosely translated as beyond one turn.


Zuckerberg plans to create the next generation of the virtual universe or an online virtual oasis to move beyond today’s most popular social media platforms. The primary objective is to create an environment where people can work, play, socialize and transact via avatars. Zuckerberg believes this is the next frontier and is like social networking when it came into existence many years ago.


Metaverse is a shared virtual platform where people can connect electronically and can move across various digital environments. In this world of unlimited, interconnected virtual communities, people can interact with one another and their surroundings by using virtual reality headsets, augmented reality glasses, smartphone apps, and innovative technology.


Is metaverse virtual reality? Not quite. Metaverse is the next iteration of virtual reality. It is more a digital reality that combines social media, online gaming, augmented reality (AR), virtual reality (VR), and cryptocurrencies, allowing users to interact anywhere and at any time.

There are many potential applications for the metaverse universe. The ideal implementation will incorporate elements of both physical and virtual worlds in real-time, in complete synchronicity, and full transparency.


For instance, one business application entails a virtual office platform where business users can virtually interact in a 3D space that replicates an office environment. Another application focuses on the real estate sector, where users can experience a fully immersive virtual home tour. Customers could also visit a virtual shopping mall and try-on virtual 3-D apparels before buying with their cryptocurrency.


Operating within an online virtual playground, a typical day for a user is to play games with friends one minute, attend a soccer game the next, shop for clothes, and enjoy dinner at their favorite restaurant. The potentials for creating virtual applications are unlimited as people can interact with one another and their surroundings in the comfort of their own home.


There are only two significant players in the Metaverse space - Roblox (RBLX) and Fortnite, part of Epic Games, a private company. The two virtual worlds allow millions of participants to play games, attend concerts, and interact with each other.


Metaverse has attracted investment interests in the past few years, resulting in the release this summer (6/30/21) of the Roundhill Ball Metaverse ETF (META). The ETF tracks the performance of the Ball Metaverse Index.


The index consists of 41 global stocks involved in the Metaverse universe or the next iteration of the Internet. The top market-cap-weighted names include NVDA (9.00% market-cap), MSFT (7.39%), RBLX (7.11%), FB (6.01%), U (5.17%), ADSK (4.49%), SE (3.93%), AMZN (3.89%), and IMMR (3.79%).


The technology sector is the largest with 61.66% market-cap weighting, followed by Communication Services (32.6%) and Consumer Cyclical (5.17%). The breakdown of the index by geographic location are the US (82.1%), Asia Developed (8.7%), Japan (2.9%), and Europe Ex-Euro (0.6%).


Source: Chart courtesy of StockCharts.com

Source: Chart courtesy of StockCharts.com

Source: Chart courtesy of StockCharts.com

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