We are getting increasingly close to the Metaverse, a 3D digital world in which people will direct avatars to play video games, socialize, share experiences (concerts, birthday parties…), shop, work, learn and will move seamlessly from one activity to another with their avatar and virtual goods. The Metaverse should then gradually replace the Internet as we know it today, which is essentially in 2D.
Video gaming companies have taken a significant lead in the Metaverse race thanks to their proficiency in building and running 3D worlds. It’s widely accepted that early versions of the Metaverse include popular video games such as Fortnite and Roblox which are actually more than games and already offer various other experiences.
The Metaverse is expected to power a massive virtual goods economy (avatars, outfits, lands, buildings…) in which users can create, own and trade virtual goods and be rewarded for their creations.
Blockchain and specifically NFTs appear highly relevant in this economy, notably to prove authenticity and ownership of digital assets, to make possible their transfer of property and manage their use and monetization over time.
We are clearly in the early stages of the Metaverse but advances in networking and cloud computing (5G, edge computing) suggest that this digital parallel world will be accessible to hundreds of millions or even billions of people simultaneously and from all kinds of devices (smartphone, PC, tablet, console…) in a near future.
The main challenge will be to build, populate and operate such a vast 3D world. This suggests that 3D software tools to create digital objects and activities and computing power will be the picks and shovels of the Metaverse revolution.
There have been signs of improving activity lately on the two leading Metaverse platforms, Roblox and Epic. While the former posted growth in average daily active users in a 17-22% range in recent quarters, the latter opened its Fortnite virtual world to major brands Lego and Disney that have or are in the process of…
While the discussion about the Metaverse has been centered recently around augmented & virtual reality devices thanks to the Apple Vision Pro launch, it shouldn’t be forgotten that the Metaverse is first and foremost a virtual world where we’ll spend in the future much of our online time to socialize, work and have fun. The…
Take-Two, one of the largest positions in both our Metaverse and Gaming certificates, is now expected to release in the next couple of weeks the highly anticipated trailer for the next chapter in the Grand Theft Auto (GTA) video game franchise, GTA VI. For those who are not familiar with the franchise, GTA is an…
Niantic, the developer of massive mobile hit Pokemon Go, released in recent weeks in collaboration with Japanese game maker Capcom its newest location-based and augmented reality (AR) title, Monster Hunter Now. The game lets users explore the world and achieve missions while fighting gigantic monsters, the AR technology allowing to blend the digital monsters with…
As widely expected, Apple unveiled last night its “mixed reality” headset, the Vision Pro, its first new product category since the Apple Watch in 2014. The headset, that will ship early next year in the US, handles two different technologies: virtual reality (VR), that immerses users in a computer-generated virtual world, and augmented reality (AR),…
Newsflow is the video gaming industry is definitely improving after the post-pandemic lull. Nintendo’s latest Zelda set a new record for the series (10 million units sold in 3 days), confirming that consumer spending on well-known franchises remains well oriented and largely unaffected by the macro environment. And importantly, most game publishers are now taking…
Nvidia’s Gaming revenue in Q4 came out sharply down again (-46% year-on-year) as the company is navigating an unprecedented inventory correction related to the post-pandemic video gaming slowdown (and, to a lower extent, the collapse of demand for crypto mining cards) and is still facing tough quarterly comparisons. Even if the top-line figure was uninspiring,…
Crypto hacks are now making the headlines on a regular basis, as illustrated by the $620 million heist of blockchain game Axie Infinity in March or last week’s $160 million hack of crypto market maker Wintermute. With criminal activity involving cryptocurrencies on track to reach a new record after the 2021 peak ($14 billion, up…
In line with recent press reports, Tencent has acquired a 49.9% stake in Ubisoft’s family holding company, Guillemot Brothers Ltd (which owns a 13% stake in Ubisoft), in a deal that values the French video game maker (a portfolio company) around EUR75-80 per share and reflects a premium around 80%. Tencent, which already owned directly…
If there’s one thing about the Metaverse that most experts and observers agree on, it’s that the digital world of the future is going to have massive requirements in terms of computing power, 3D modeling and standardization. A reference in high-performance computing, Nvidia now plans to tackle the two other challenges and become the go-to…
We have been arguing for more than one year that video gaming assets could attract significant M&A interest from Tech and social media giants and Microsoft’s reported takeover talks with Activision today clearly confirm our view. The deal, if confirmed, would mark a major step-up in Microsoft’s gaming M&A strategy after its purchase of Bethesda…
If Facebook’s long-term strategy was not yet clear enough for everyone, its recent name change to Meta unambiguously states the company’s objective to be a major actor in the buildout of Internet’s upcoming (r)evolution, which premises are already starting to be visible through different angles. From the gaming industry’s perspective, the Web’s next iteration will…
Ten days ago, Nike made the headlines when it announced NIKELAND, its own virtual space in Roblox modeled after its real-life headquarters. This move was followed by Adidas, which teased a collaboration with Sandbox, a blockchain-powered virtual world and followed up with a partnership with crypto exchange Coinbase. This sudden rush from large consumer brands to…
Major video games are gradually turning into Metaverse destinations offering to their vast user base a wide range of activities well beyond gaming and including notably social interactions, entertainment and shopping in a 3D world. Roblox, our second largest portfolio company, clearly stands ahead of the pack when it comes to building a Metaverse, as…
Facebook made the headlines last week when it announced a rebranding to Meta, a strategic shift towards the Metaverse and massive investments over coming years to support its ambitions (starting with $10 billion in 2021). While the timing of these announcements could have much to do with an attempt to divert attention from recent bad…
There has been a lot of talk recently about the Metaverse, with notably Mark Zuckerberg commenting during Facebook’s latest earnings call that “we believe this is going to be the successor of the mobile Internet … In addition to being the next generation of the Internet, the Metaverse is also going to be the next…
A couple of weeks ago, we commented that the Augmented Reality (AR) theme was heating up with several major new games (Pikmin, the Witcher…) and devices (Snapchat spectacles) hitting the market and that AR glasses could take over smartphones as the new major gaming platform in a near future as they offer more immersive AR…
It’s already been 5 years since the Pokemon Go phenomenon brought Augmented Reality (AR) to the masses, with the game developed by Niantic (held by both Google and Nintendo) reaching more than 500 million users by the end of 2016 and still remaining at the top of app store downloads in 2021. Despite this initial…
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ISIN
XS2168927809
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USD
Type
Active Equity
Issuer / Rating
Kepler – JP Morgan / S&P A+
Inception Date
16.11.2021
Liquidity
Daily