Companies Investing Big on the Metaverse

As excitement surrounding the possibilities offered by the metaverse grows, major technology companies are also expressing their enthusiasm by announcing major expansions in the space.  What large companies are investing in the metaverse?  What does this mean?

 

Facebook Becomes Meta

In October 2021, the company then known as Facebook changed its name to Meta to emphasize its metaverse vision.  Mark Zuckerberg, Facebook founder, stated during the company’s annual developer’s conference, “From now on, we are going to be Metaverse first, not Facebook.”  Predicting that one billion people will be on the metaverse in the next decade, he stressed that the company’s future would focus on building virtual reality products that connect users through the new metaverse medium. He described the metaverse as the next generation of the internet.[1]

 

Facebook already has more than 10,000 employees building consumer hardware like Augmented Reality (AR) glasses that Zuckerberg believes will become as ubiquitous as smartphones, as well as Oculus virtual reality (VR) headsets.[2]

 

Microsoft’s Purchase of Activision Blizzard

Microsoft (MSFT) threw its hat in the metaverse ring with its January 2022 announcement that it would pay nearly $69 billion dollars to purchase video game company Activision Blizzard, the creator of such popular gaming franchises as “Call of Duty” and “Candy Crush.” MSFT CEO Satya Nadella explained his rationale for the purchase when he said, “Gaming is the most dynamic and exciting category in entertainment across all platforms today and will play a key role in the development of metaverse platforms.”[3]

 

Qualcomm Launches Metaverse Fund

In March 2022, technology hardware company Qualcomm announced the launch of the Snapdragon Metaverse Fund, established to invest up to $100 million in developer and companies building immersive extended reality (XR) experiences, as well as associated AR and artificial intelligence (AI) technologies. Qualcomm is looking to fund developers who want to push the boundaries of what’s possible in a new age of technology.[4]

 

Sony and the Lego Family Invest in Epic Games

In April 2022, Sony and KIRKBI, the family-owned investment firm behind Lego, announced that they are investing $2 billion in Epic Games, the company behind Fortnite.  This announcement follows a partnership announced by Epic and Lego only one week earlier aimed at co-developing a family-friendly metaverse for kids.  Lego already has a line of video games based on franchises such as Star Wars and Batman.[5] Sony’s chairman noted that the investment in Epic would help to “deepen our relationship in the metaverse field.”[6]

 

Putting Their Money Where Their Mouth Is

These major deals indicate that large technology companies are willing to invest heavily in what they believe will be the next phase of the internet.

 

How may individuals participate in what may be the next technology boom?

 

While several companies are building out their metaverse strategies, picking the winners is a difficult task. As such, it may be prudent for individuals to invest in a portfolio of metaverse companies.

 

The Fount Metaverse ETF (MTVR)

The Fount Metaverse ETF seeks to provide investment results that, before fees and expenses, generally correspond to the performance of the Fount Metaverse Index.  The index was designed to measure the performance of companies that develop, manufacture, distribute, or sell products related to metaverse technology.

 

MTVR may be an attractive vehicle for investors looking to invest in the metaverse.

 

For a full list of MTVR holdings, please click here.

 

 

 

 


 


[1] Bidar, Musadiq, Facebook to Change Corporate Name to Meta, CBS News, 10/28/21

[2] Heath, Alex, Facebook Is Planning to Rebrand the Company with a New Name, The Verge, 10/19/21

[3] Bary, Emily, Microsoft Bets on the Metaverse With $69 Billion Deal for Activision Blizzard, MarketWatch, 1/18/22

[4] Qualcomm Launches $100M Snapdragon Metaverse Fund, Qualcomm Press Release, 3/21/22

[5] Browne, Ryan, Sony and the Lego Family Bet Big on the Metaverse with $2 Billion Investment in Epic Games, CNBC, 4/11/22

[6] Sony and KIRKBI Invest in Epic Games to Build the Future of Digital Entertainment, Epic Games Press Release, 4/11/22

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Bong-Geun Choi Chief Economist

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