Many investors are skeptical regarding the “metaverse,” and surely the track record of an earlier introduction to the virtual world, the dot-com bust of 2001, is an unsettling prologue.
No doubt, there is hype surrounding latest iterations of the metaverse, just as there are always promoters around any investment scheme in the limelight, from recurrent gold bonanzas to oil strikes to the latest “better battery” tale.
But the metaverse, despite its ephemeral virtual nature, has at its heart the promise to reduce risk in investing in real property and business enterprises, and to make safer medical procedures and industrial operations.
Like the internet in 2000, there are many corners of the metaverse that may not reward investors. And yet, like dot-coms or the internet in general, the biggest and most successful enterprises in commercial history may be in the offing. Names such as Amazon, Facebook, Twitter, Google (Alphabet) hardly existed pre-2000, while other tech-wizards, such as Apple and Microsoft, or Intel and Qualcomm, have prospered mightily as the increasingly ubiquitous internet ramped up demand for related services and gadgetry. That past is also prologue.
The other reality: In general, metaverse-
centric stocks are deeply discounted from heady levels achieved during the pandemic, selling for half off or more. The year 2023 may be an excellent entry point for investors seeking to virtually realize profits.
SO … WHAT IS THE METAVERSE?
Definitions of the metaverse vary, and inevitably include descriptions of people wearing 3D googles while gaming online. And there likely is a huge future in online virtual-reality gaming and in the related software and hardware.
But real play in the metaverse could be more prosaic and involves making life safer for property investors, industrial engineers, nuclear-plant operators, and doctors and patients, and others.
TOWARD A NEW REALITY
Augmented reality, or the on-screen blending of virtual imagery and information with real-world depictions, promises to be a huge industry in the decades ahead. For example, in the property world, many large-scale investors buy and develop real estate in hopes they can upgrade the property in an improving or expanding city or neighborhood. Visualizing property improvements, and collating related legal and regulatory environments, could tax the imagination, to put it mildly.
To that end, French financial and property giant BNP Paribus Real Estate has launched WIRED, an acronym for Wearable Immersive Real Estate Dataroom. The 3D visualization tool enables users to immerse themselves in an augmented simulation or reality of a neighborhood in question, with past, present or potential future 3D visions available at the click of a mouse or button. Thus, a developer can more readily anticipate how zoning, law, public transport buildouts, future developments and demographics will shape a region surrounding a prospective acquisition and development.
WIRED was developed in collaboration with Unity Technologies, a Denmark- and San Francisco-based concern traded on Wall Street. Like many outfits originally in the gaming sector of VR, Unity Technologies has branched into industrial and property applications. Unity, which went public in late 2020, operates the Unity Industrial Collection, an online VR tool kit to help engineers and others design products and industrial layouts.
The company also sells to regional planning agencies “digital twin” landscapes or cities. Unity recently created a digital twin, or virtual copy, of 800 square miles of Orange, Seminole and Osceola counties in Florida to help local authorities plan and design development.
In common with many other VR-related tech enterprises, Unity soared in value during the pandemic, peaking at nearly $200 a share and a market cap of $60 billion, when a virtual future seemed likely as global populations huddled at home and away from each other. But by late 2022, the company shares had slipped to $41 each, another example that investing in tech enterprises is not for the faint-hearted.
Institutional investors were buying Unity Technologies not so long ago for five times the current selling price. Buying now makes more sense.
BEFORE META
Long before the word “metaverse" was coined, there were architects, building engineers and others manipulating virtual realities and communicating through 3-D on-screen models dubbed “building information models” or BIM.
BIM years ago advanced the point where office skyscrapers or other large developments are first blueprinted online by architects, construction professionals and others, who easily trade information online about designs, building codes, materials and progress.
Parts delivered onsite by manufacturers and vendors participating in the BIM are numbered or coded, to allow construction workers to more easily identify proper placement.
Meanwhile, building owners, financiers, insurers, building inspectors and others can monitor progress and work quality daily or even hourly, aided by copious uploading of photographs and videos into the BIM model.
Autodesk is hardly a new VR company, having started 40 years ago in Mill Valley, Calif., and going public in the mid-1990s, but the VR pioneer has steadily improved its BIM offerings, known as Revit, and is often credited as the leader in the field.
Autodesk and other companies helping to lower the cost of construction through VR will likely have a future — as long as there is an internet and people want to build buildings. For today’s investors, Autodesk is also well below peak values of 2021.
SELL THE PICKS AND SHOVELS
Today, there are huge manufacturers of semiconductors, the computer chips of seemingly ever-increasing power and ubiquity in modern gadgetry. There are many powerhouses in the chip design and manufacturing world, but the name that pops up repeatedly in regards to VR is Nvidia Corp., the designer and manufacturer of graphic processing units (GPUs), which, as one might guess from the name, are used in gaming, virtual reality, video editing, machine learning and in autonomous vehicles (including drones). Perhaps the closest investment to a pure play in GPUs and related markets is Nvidia. Many stock-market gurus touted Nvidia in 2021 when the stock soared to more than $300 a share. Present-day investors can get onboard at half price.
Another interesting VR play is San Jose-based Cadence, known for its visual simultaneous localization and mapping, or vSLAM products. In a nutshell, Cadence produces technology to quickly determine the position and orientation of a sensor in relation to surroundings, while also mapping the environment around that sensor.
One dramatic example of vSLAM-like technology is the use of on-screen augmented reality for operators of certain weapons systems, such as drones or missiles, or what pilots or battlefield commanders see on a screen. The weapons operator might want a simplified reality on the screen, with friendlies and targets highlighted.
There are many other recognized producers of computer chips and GPUs, including highly rated products from Advanced Micro Devices.
Taking a stake in the nuts-and-bolts of the metaverse — the GPUs — is an interesting play on virtual investing.
VIRTUAL PRACTICE
There are many situations that require trainees to practice first and frequently, but for which providing actual circumstances is not possible. A nuclear plant meltdown, repairing tall wind-turbines on location, many medical procedures, or combat, are just some examples. Of course, commercial pilots have practiced on flight simulators for decades, but the dropping cost of VR is bringing such training to much wider audiences.
Increasingly, the nuclear power industry is turning to VR to train new or prospective employees, and also to prepare workers for potential accidents or energy shutdowns. One advantage of VR is, of course, simple practice, as often as needed at almost zero marginal cost. Other advantages include recording response times and noting which training programs actually work.
General Electric Hitachi Nuclear Energy utilizes its Nuclear Virtual Reality Solution tool to train personnel for outages, operations and maintenance work.
The future for VR and training is nearly limitless as costs come down and VR training models are improved with experience.
IMAGERY THROUGH THE AGES
The large tech behemoths, be it Amazon, Apple, Facebook, Google, IBM or Microsoft, are funding ventures or divisions related to VR, as well as countless mid-level or startup tech enterprises. Going forward, it is likely VR or augmented reality will become commonplace whether in entertainment or gaming, in property development and city planning, or in training in industrial, medical, military or other applications.
Through the decades, businesses and consumers have routinely gravitated to imagery that is more realistic. Picture books became black-and-white films or TV shows, which became color, and then began to feature increasingly compelling special effects. The next step is virtual and augmented realities, which has already been deployed by many industries, and will be more broadly deployed to better educate, train, organize and entertain.
While gaming and entertainment will capture the VR headlines, the practical applications in business may prove even larger in scale. And, as of 2023, many companies involved in the making of the metaverse are selling at deep discounts and tempting investors with the prospect of significant gains — whether considered real or virtual.
Benjamin Cole (7continents7@gmail.com) is a freelance writer based in Thailand.