【Editor's Note】 Metaverse, the English name Metavrese, which originated from the concept of "Avalanche" in science fiction primary schools, shines in 2021: from NVIDIA's Lao Huang to Facebook's Xiaoza, to the domestic Baidu, NetEase, Tencent, Internet giants have laid out places. The first year of the metacosm?
Through interviews with industry experts, practitioners and analysts, the surging news reporter analyzed the "past and present lives" of the meta-universe, and first explored the meta-universe industrial chain and investment opportunities that Xiao he only revealed.
Although it doesn't yet have a clear definition, this doesn't prevent Metaverse from becoming one of the top ten buzzwords of 2021.
In October, Facebook's corporate name was renamed "Meta", All in Meta universe, which undoubtedly added another fire to the concept. When technology giants scramble to layout, their investment value, market size, and future development direction have also become the focus of heated discussion on Wall Street.
Morgan Stanley noted that there is a $8 trillion market among U.S. consumers, though the agency also warned that the adoption of metaverse could also pose challenges due to the current strength of digital media and e-commerce products, the uncertainty of the metaverse experience, and consumer distrust of some companies in protecting personal data.
In UBS's view, the key device of the metaverse is AR (augmented reality) glasses, which facilitate the integration of the digital world with the real world. The technical barriers to AR are much higher than VR headsets, and it may take some time for the right AR glasses to roll out. At the same time, whether Apple or Meta can commercialize affordable augmented reality glasses is crucial to the success of the metaverse.
Morgan Stanley: There is a $8 trillion market among U.S. consumers
Morgan Stanley believes that the metacosm is likely to become the next generation of social media, streaming and gaming platforms. And similar to current digital platforms, Metacosm will initially be highly likely to become an advertising and e-commerce platform for offline products.
It also means that the potential consumer spending market space (TAM) in the United States is as high as $8.3 trillion, covering real estate, core retail, automotive, gaming and more.
At the same time, Morgan Stanley sees more immersive experiences and opportunities to unlock metaversities, including in the areas of clothing, cosmetics, games, video streaming, automotive, real estate and home design, music and education.
It's worth mentioning that the $8.3 trillion doesn't include new potential consumer spending items, such as Non-Fungible Tokens (NFTs), digital collectibles, or new creative subscriptions. Morgan Stanley expects digital collectibles and NFTs to grow as the next generation of metaversities evolves.
Morgan Stanley pointed out that NFTs and various social games may create huge business opportunities for the boutique industry. Social gaming is expected to create $20 billion in business opportunities for the digital luxury industry by 2030, and in the $300 billion NFT market, various digital luxury goods and collectibles are likely to capture more than $25 billion in share.
Morgan Stanley said that the brand's many attempts in the field of NFTs and social games have helped them to open up new customers and recognize this new market, and the brand is in the proof-of-concept stage of NFT and meta-universe games, the evidence shows that the current tests are successful, and the next stage is how to monetize.
However, the agency also acknowledges that the adoption of metaversals will not be quick and simple due to the current strength of digital media and e-commerce products.
"This means that any metaverse may need to collaborate to drive adoption, or develop its own new 'killer app/product' to drive mass adoption," Morgan Stanley said. In addition, the adoption of metaverse may also pose challenges due to the uncertainty of the metaverse experience and consumer distrust of some companies in protecting personal data. The agency acknowledges that it's less certain whether consumers will choose to share more detailed digital information over the next 10 years, sharing what is being done and with whom.
Jefferies: The greatest disruption that humanity has ever experienced
Investment firm Jefferies is more optimistic, with Jefferies analysts led by Simon Powell writing in a note that the metacosm could be "the biggest disruption that humanity has ever experienced" and led to "the digitization of everything" and is "the new platform for the digital age." Of course, the agency acknowledges that even a simple metacosm could be at least a decade away.
"A single supercosm may take more than a decade, but as it develops, it has the potential to subvert almost everything in human life that has not yet been subverted." Jefferies said in the report.
Simon Powell said in an interview with CNBC that the metacosm is an investment opportunity similar to the early days of the Internet. That means focusing first on hardware vendors, then software vendors, and finally the companies that operate the technology.
"We can only imagine what it will look like." "We should think that in the next 5 to 10 years, all human activities that have not yet moved online will be transferred online," he said. ”
While Simon Powell expects the metaverse to eventually encompass every aspect of human activity, he thinks applications will start with gaming, entertainment and social media. Still, he said, it's uncertain whether the metacosm is dominated by companies like Facebook/Meta or by decentralized virtual worlds like the Sandbox or Decentraland.
Some of the stocks on Jefferies' list include Snap, Roblox, Take-Two Interactive Software, Electronic Arts, Activision Blizzard, Unity Software, Microstrategy and Warner Music Group, among others.
In gaming, Roblox (RBLX), Minecraft owner Microsoft, fortnite creator Epic Games are already creating metaverse-like experiences. Traditional game makers including Activision Blizzard, Electronic Arts, and Take-Two Interactive software are also building their future metaversms.
Investors can also look for opportunities in blockchain-based games such as dispersion (MANA) and sandbox (SAND). Simon Powell writes: "It's a groundbreaking idea that an asset won or created in a game can be taken from the game and used elsewhere in the real or digital world. These games are breaking through the closed-loop nature of assets that can't leave games. ”
Simon Powell also advised investors to consider chipmakers such as Nvidia and AMD, saying that entering the virtual world will require enormous computing power. He also recommended device manufacturers, such as those that make virtual reality headsets. "It's all about infrastructure in the coming years." Simon Powell said.
UBS: The key device of the metacosm is AR glasses
In the coming years, technology infrastructure will be critical. UBS believes that virtual reality (VR) and augmented reality (AR) devices are gateways to the metaverse, but remain an obstacle.
UBS simplifies the metaversymic ecosystem into three tiers: platforms and content providers (Microsoft, Meta and NVIDIA): user interfaces (VR/AR devices) and technology infrastructure (cloud/network/payments).
"User interfaces (VR/AR headsets and glasses) are gateways to meta-worlds, providing immersive 3D user experiences within them," said Grace Chen, an analyst at UBS, whose penetration of these devices remains low, but their market is expected to grow faster than mature devices and ultimately "bring the internet experience to the next chapter."
At the same time, computing (cloud/edge computing) and the network supply chain (from chipsets, memory, and various components to system manufacturers) are key building blocks in the metacosm. UBS predicts that the total capital expenditure of the world's leading cloud service providers will increase by 19% year-on-year in 2022 (32% year-on-year in 2021), driven by the booming Al and 5G applications. UBS expects this to spur long-term incremental growth in capital spending.
UBS notes that the key device in the metaverse is THE AR glasses, which facilitate the integration of the digital world with the real world. The technical barriers to AR are much higher than VR headsets, and it may take some time for the right AR glasses to roll out.
"We believe that once VR/AR devices reach higher penetration rates and have broader adoption in consumer and commercial areas, Metacosm will likely become an incremental growth driver for the technology supply chain." Grace Chen said in the report.
UBS said VR shipments were estimated at 10.7 million units this year, up 98 percent from last year, but still well below the 345 million personal computers and 1.4 billion global phones. The agency expects this number to grow nearly 6-fold to 61 million units by 2025, with its value rising to $1 billion, with the global VR lens market value reaching a compound annual growth rate of 91% from 2021 to 2025. And real AR glasses may be launched after 2023. "The ultimate device in the metacosm is AR glasses, but they require the miniaturization of individual vision, as well as the development of new technologies such as MicroLED."
UBS concluded: "The ability of Apple or Meta to commercialize affordable augmented reality glasses is critical to the success of the metaverse."
Currently, Meta Oculus is the market leader and is expected to capture 75% of the market share in 2021, with Sony and Apple joining in 2022.
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