Ticker Symbol YOU’s Top 10 Companies Making the Metaverse a Reality (...a Real Reality, not just a Virtual Reality)

Providing consumers with the hardware to interact with the Metaverse and Developers the tools to build it.

In order for the Metaverse to be widely adopted, the graphics need to be crisp and clear. At the same time, users expect to interact with their environment without latency (lag) or stuttering. To do this, advances in computer hardware, computer science and AI algorithms need to be made. That’s Nvidia’s bread and butter.

Nvidia is THE big name when it comes to graphics processing and artificial intelligence solutions. Whether that’s for consumers, commercial or high-level computational applications, Nvidia is the main player people come to when they need to power their machine learning systems. Nvidia’s RTX series of graphics cards have helped push the boundaries of what consumer PCs are able to deliver by integrating machine learning algorithms into their ecosystem, to allow performance beyond the limitations of the hardware. Nvidia DLSS can deliver consumers with the higher fidelity graphics they seek in Metaverse applications with less processing overhead. Machine learning is doing the heavy lifting while the user enjoys an experience that’d previously only be possible with more expensive hardware.

Beyond just operating on the hardware side, Nvidia have also developed Omniverse, a scalable development platform for the building and deployment of metaverse applications. Omniverse builds off of Pixar’s Universal Scene Description (USD) framework and leverages Nvidia’s software suite to make development a breeze.

If the Metaverse takes off, Unity could very well find its developer tools becoming the gold standard for constructing 3D virtual worlds.

Leading software suite for 3D interactive AR/VR content creation.

Before consumers can explore the Metaverse, developers need to build it. That means they need the best tools for building interactive content for augmented and virtual reality. Unity is a 3D graphics and physics engine that is responsible for over 60% of ALL AR/VR content in the world right now.

Game developers are now supported by Unity’s suite of development tools, providing them with rich asset libraries to construct their virtual world, a scriptable render pipeline to deliver powerful visuals and multi-platform support, allowing deeper penetration in the market.

Now Unity’s AR/VR reach isn’t just limited to gaming applications. Unity can deliver cutting edge technology to industrial businesses through their Unity Industrial Collection, which is a set of software tools that allows people to import, optimize and visualize 3D data in Unity. Designers and engineers are able to navigate through augmented 3D models of the data they’re working on to get an unparalleled visualization of the products they’re working on.

Unity’s presence in the workplace doesn’t just stop in the design room either. Unity has developed an Extended reality (XR) toolkit which can create complex virtual learning environments for employees. The hope is that there are improved learning retention rates when immersive training tools like Unity’s XR are implemented into the employee experience.

If metaverse takes off, Unity could very well find its developer tools become the gold standard for constructing 3D virtual worlds.

Next generation of collaboration and knowledge work tools.

While some companies here come from a gaming background, Microsoft is a bit different. Microsoft’s vision for its workplace metaverse lives inside Teams, the company’s online collaboration platform. In particular, Mesh for Microsoft Teams.

Mesh is supposed to create immersive meetings that allow participation via laptop, Microsoft HoloLens (more on this in just a moment), or VR headset. The idea here is to create a seamless transition between in-office and remote work. While solutions like Zoom offer teams the ability to connect anywhere in the world, Microsoft plans to take this a step further. Possible plans for Mesh include developing a virtual whiteboard in the metaverse in which people can collaborate on; a ‘virtual conference room’ of sorts so you don’t feel like you’re sitting watching a collection of webcams.

Microsoft’s VP for Teams, Nicole Herskowitz is quoted as saying, “Over 40% of leaders consider relationship building to be one of the greatest challenges in hybrid and remote work.” and so Microsoft’s investment to Mesh for Microsoft Teams is their way of enhancing productivity and collaboration among a distributed workforce.

Now, let’s get back to Microsoft’s hardware entrance, HoloLens. HoloLens is a mixed reality holographic device that’s touted to boost efficiency and productivity in the workplace. Where a VR headset disconnects you to the outside world, Microsoft’s HoloLens enhances it by adding an overlay to your vision where you’re able to learn and collaborate on the go while keeping your hands free.

If metaverse really becomes the foundation of the future of work, then Microsoft’s exposure to the software, hardware and infrastructure (through Microsoft Azure) that metaverse relies on ensures plenty of opportunity to grow subscription revenue and drive hardware sales.

Investing heavily into the space. Hardware (servers and headsets), software (Horizon Worlds), and services like realtime group translation and VR collaboration tools.

Facebook’s rebranding as Meta Platforms showed an unprecedented bet on the future of the metaverse. Meta’s acquisition of Oculus VR in 2014 is seen as one of the first major investments into the earliest stages of Metaverse, an investment that may come to pay dividends as Meta’s early acquisition has now put them in a position of owning 90% of the market share in the VR headset space.

Meta hasn’t just stopped at that initial acquisition, their ongoing aggressive investments in their VR hardware and software have led to them building an ecosystem that far outpaces other offerings in functionality and access. With their hardware specifically, they’ve adopted the same approach that Apple uses with their phones. They may not have the most powerful hardware, but their ability to develop Oculus software with their hardware in mind has created an ecosystem that “just works”. Given Meta has done away with requiring users to have a Facebook account to use their VR products, the Oculus ecosystem has become far more accessible and offers the easiest and least expensive introduction to VR and - perhaps in the future - the metaverse

Meta has been pumping plenty of resources into their new social media Horizon Worlds. Horizon is a VR hub in which users can connect, socialize, collaborate and play together in Meta’s idea of how the metaverse should look. Horizon’s is a multi-faceted product which has progressed to holding live events such as concerts and film festivals from within the virtual world.

In keeping Microsoft on their toes, Meta also offers Horizon Workrooms for businesses with a distributed workforce who are looking to enhance their rent collaboration abilities.

In somewhat of a blow for Meta, Horizon’s VP recently announced his departure to explore new opportunities. While this doesn’t impact, it’s yet to be seen how the company’s vision of Horizon continues to take shape.

If metaverse succeeds, Meta Platforms’ dominating presence in the VR market will have them primed for success. However, with recent concerns over Facebook’s ability to generate revenues, Meta’s push to make the metaverse relevant is quite a risky bet as their shift to position metaverse at the core of their business leaves them in a more difficult position if it fails compared to other companies here.

The most dominant force in semiconductor manufacturing.

You may not have heard of them, but there’s little doubt in my mind that you’ve used a device powered by TSMC’s technology. In the global semiconductor market, TSMC accounts for over 90% of the high-performance microchips in our cell phones, computers, data centers and beyond. This is leagues ahead of their nearest competitor in Samsung Foundry who accounts for only 13% of market share.

With customers like Apple, MediaTek, Qualcomm and Sony, the chances are that if you’ve used a mobile device or computer, you’ve used a product containing TSMC semiconductors.

You don’t even have to look beyond this collection to see the reach of TSMC, as NVIDIA is now expected to use the latest 5nm wafer technology for its upcoming GeForce RTX 40 series release. Not to mention the company is already using this process node for its Hopper (H100) data-center architecture. TSMC also produces the semiconductors for Nvidia’s biggest competitor in the discrete GPU market, AMD and so TSMC’s addressable market almost encompasses the entire GPU industry.

Jumping back over to the context of the metaverse, Apple reportedly are using TSMC’s 5nm process in their upcoming VR/VR headset. If this proves fruitful, it sets a precedent for new entrants in the AR/VR hardware space gravitating towards TSMC’s wafer technology.

Meta’s most successful VR headset currently uses custom chipsets from Qualcomm, and so while it’s not certain whether the TSMC produced nodes make their way into these Qualcomm chipsets, there’s a clear indication of opportunity for TSMC to make their presence known in a rapidly growing device market.

Given the customer-base for TSMC covers several different device markets and provides to companies in direct competition with each other, it’s hard to see TSMC not being a key player in the hardware side of the metaverse. As new devices come to market and server infrastructure is developed, TSMC’s success will be finding their technology in the servers and the headsets/smartphones accessing the metaverse.

Valuable Intellectual Property provides licensing opportunities in the metaverse.

Although Disney was founded almost a century ago, they continue to dominate mainstream media and have not failed to evolve with the times by adopting new forms of media and technology. We can expect this to continue as consumers lean into more immersive experiences for entertainment. Disney has already launched the Star Wars Galactic Star cruiser which is a fully immersive hotel, demonstrating their continued ability to pioneer these changes.

Even with an impressive track record of pioneering new ways to cater to evolving forms of entertainment, the cornerstone to the success of Disney’s empire has been their ability to capitalize on technology and intellectual property. They own many influential and iconic creative concepts, inventions, trademarks, sounds, literature, designs and technology. The characters they own are widely recognised and will need to play a role in the metaverse for it to be a widespread success as the future of entertainment. What would the metaverse be if it didn’t have Star Wars, Marvel, ESPN and many of Disney’s other characters? Disney will have ample opportunity for licensing the intellectual property if they don’t innovate and launch products and solutions to service the Metaverse themselves.

Disney’s metaverse presence isn’t just limited to licensing opportunities. Through their highly successful animation studio Pizar, Disneey has developed Universal Scene Description (USD). USD is a extensible software platform for collaboratively constructing animate visual effects production. USD provides an interchange between digital content creation tools with its expanding set of schemas, covering domains like geometry, shading, lighting, and physics.

USD’s versatility has led to its adoption, not only in the visual effects community, but also in architecture, design, robotics, manufacturing, and other disciplines. Nvidia themselves have even implemented it into their Omniverse development tool. So we can expect to see Disney playing a role in the background of the development of new metaverse worlds.

Largest video game company in the world with one of the largest social networks.

Tencent has their hands in everything. The tech and entertainment conglomerate has a stranglehold on digital media. They’re the largest company in the world operating in the booming video game industry thanks to some lucrative investments in developers with important IPs.

Aside from owning valuable IPs like Disney does, they also own 40% of Epic Games. The importance lies in that Epic Games makes Unreal Engine - a direct competitor to Unity in the game engine space. While Unity’s presence in the gaming industry is unmatched, Unreal Engine’s Nanite Virtualized Geometry and Lumen Global Illumination technology introduced in Unreal Engine 5 offers arguably the greatest visual fidelity on the market all while using less resources on disk. This will be super valuable for metaverse applications that strive for the highest visual quality while keeping within the hardware constraints.

The significance of Tencent’s ownership of WeChat can’t be understated either. In what can only be described as a ‘Super-App’, WeChat brings text messaging, voice messaging, broadcast messaging, video conferencing, video games, image sharing and digital payments to users’ fingertips all through one application. WeChat’s 1.2 billion active users present a huge market opportunity if the company were to pool their gaming and social media resources to create a unique virtual experience.

Recently in June of 2022, Tencent announced to employees the official formation of an “extended reality” (XR) unit that’ll spearhead the company’s foray into Metaverse concept. It’s still to be seen how this will shape up, but the company is positioned very well to ride the metaverse wave.

Tencent’s size, diversity and reach tends to point to one thing; Tencent will play a role in the Metaverse landscape should the idea flourish. Be that through investment, acquisition or internal development, Tencent has the resources to play a central role in a shift to the Metaverse.

Early implementer of a virtual world that with corporate collaborations and an engaged user base.

If you haven’t heard of Roblox, then I’m almost certain one of your younger relatives has. Roblox is one of the largest online platforms providing users with a space to connect, create and share content. With over 50 million daily active users recorded in Q2 2022, the game has a massive reach and is already one of the of the biggest virtual worlds out there.

Roblox can be considered an early implementation of the metaverse concept. While some companies have taken a tech-heavy approach to the metaverse and have invested heavily in VR/AR technology. Roblox has focused on delivering the metaverse experience to users without any hardware related barriers to entry (besides having a computer or smartphone).

Roblox allows the player to create their own games or ‘experiences’ within the platform. The nature of this game creation platform means that there are over 40 million unique experiences for users to experience. Importantly, Roblox is quite unique in that it allows community members to monetize their creations and earn money while they build experiences for others to enjoy. This is important, as the ability to earn money within a metaverse concept adds to the validity and retentiveness of the platform.

Beyond being a place to socialize and experience things virtually, your avatar (player character) is consistent across all of them, meaning you can take items from one Roblox game into another. This approach builds up on online identity and is an integral part of the metaverse. Having a "persistent avatar" is an important part of the Metaverse as it creates a more seamless transition between entertainment hubs and grants the platform owner with monetization options through avatar cosmetics.

Roblox already has a massive user count and existing collaborations with popular musical artists like Lil Nas X and corporations like Walmart (NYSE:WMT), allowing Roblox to deliver unique experiences geared towards a younger audience. With this in mind, it’s not a stretch to suppose Roblox’s influence will continue to grow and morph to continue to be at the front of the pack in terms of how the metaverse looks. are collaborating with. Should the metaverse succeed, Roblox provides a perfect point of entry for larger businesses wishing to gain exposure to the metaverse.

VR could be on the way to their unrivaled software and hardware ecosystem.

For many people, Apple is synonymous with technology. After all, they are THE ecosystem company. If they build a VR headset, the VR market will explode. If they build a VR app store, the market will explode. If they build a software development kit and language for it, the market will explode. There’s no way they let Meta Platforms be the only player in this space.

Apple are already making their first baby steps towards the metaverse through their recent focus on Augmented Reality (AR). AR isn’t necessarily a new horizon for Apple and it’s clearly been on their mind for a few years considering the company has already toyed with some applications of AR aided to the inclusion of LiDAR with their recent iPhone and iPad releases.

Given that they’re also supporting developers through their ARKit 5 and RealityKit frameworks, it looks as if they’re creating an enclosed AR software and hardware ecosystem as a proof of concept before committing to a fully-fledged metaverse strategy.

While nothing is confirmed, the rumor-mill is alight with the whispers of an Apple VR headset on the way before the end of 2023. If this is the case, then there’s hope that their diligent approach to user privacy will be echoed here as well, which should alleviate some of the concerns the general public has already raised about Meta and the concept of metaverse as a whole.

Without a clear-cut metaverse publicly announced, it’s quite difficult to speculate on where Apple will be positioned if the metaverse becomes the future of virtual interaction. However, there’s little doubt that Apple’s presence will be known if that’s the case.

Microsoft, Epic Games, Meta, and 33 other companies and organizations have formed a standards group for “metaverse” tech. At present Apple isn’t present in this group and so there’s interest in seeing how Apple would approach this. Will they continue to operate a relatively closed ecosystem like they do with their software and devices or will they have a crack at providing a compelling offering in a competitive and standardized market?

Dominance in gaming, e-commerce and payments opens the door to a shift to metaverse.

Sea limited is one of those companies that you may not have heard of if you live outside of Southeast Asia, but their reach cannot be understated. Under its digital entertainment subsidiary Garena, the company developed Garena Free Fire. The game became a hit, becoming the most downloaded mobile game globally in 2019. Later, in August 2021, Free Fire set a record with over 150 million daily active users globally.

Mobile gaming isn’t the only pie that Sea Limited has their finger in, as they operate Shopee, one of the largest shopping apps in terms of monthly active users in Southeast Asia. asset-light platform is integrated with logistical and payment support, and claims to make online shopping easy and secure for both buyers and sellers.

However, it should be noted that Shopee itself has not yet become profitable and the company recently sent a memo to employees announcing job cuts for employees across Asia as a cost-cutting measure in the face of a difficult macroeconomic climate.

While company-wide profitability still hasn’t been achieved, 53% year on year growth in active users for Sea Limited’s digital payment service SeaMoney is expected to help on their way to achieving it.

With respect to the metaverse, there has been some movement, as Sea Limited has recently anchored a fund raise of S$8.5 million for the Singaporean-based artificial intelligence powered gaming firm Refract. Refract plans to use the funds to develop a wearable full-body motion-capture technology, called AXIS. Through developing AXIS, Refract aims to contend with the likes of Meta Platforms and other VR/XR tech in the metaverse space.

Given the diversity of the company’s assets between gaming, e-commerce and payment systems and their investments in new XR/VR hardware, there is plenty of scope for Sea Limited to pivot their focus and provide consumers with a powerful and holistic metaverse platform. In a very similar vein as Apple, Sea Limited isn’t a company with any publicly announced metaverse strategy. However, I’d group these two together in my companies to watch as there’s little doubt they’d pounce on the opportunity to join others corporations at the metaverse table.