Modern Outlook

The Battle of the Metaverse pt. 2

December 28, 2021 Eddie Thomas
Modern Outlook
The Battle of the Metaverse pt. 2
Show Notes Transcript

In the second part of this series we talk through how the Metaverse is going to impact all of our lives as consumers as investors. 

We go through how specific companies will take their own approach while all competing for the same consumers while the Metaverse finds its way into our lives. This is just scratching the surface to what will come, but it is exciting to see the steps that are being taken. 

hey guys what is going on? Welcome to the life finance and inbetween podcast brought to you by me the host, Eddie Thomas, brought to you by wealth management services here in Hershey, PA. So a couple weeks ago, if you listened, we had breaking down the metaverse, the Battle of the metaverse, part one that we went to. And I'd said this is going to be a multiple part series. So this is going to be part two of that series. I'm not sure if there's going to be additional parts just yet. I know down the line, there absolutely will be. I'm just not sure at this current moment if there's going to be a par three soon, or if that's going to be down the line, because we're going to talk a lot here in part two. So that's what's going on today. We're just going to get into it gonna dig right into where we left off after part one, where we kind of went through what the metaverse is what it's going to be, and it's very, it's in its very, very beginning stages, like the first pitch of anyone is where it's at right now. And there's a long way to go and along a long way to grow. But let's dig in today as to what this is going to look like as an investor as a consumer and long term. What are the effects that the metaverse might have? And let's just jump right into it. The Metaverse long term is going to be a lot of different things to a lot of different people. And a lot of it depends on your comfortability and how you want to want to participate in the metaverse. So with that, I'm going to speak on a very general scale. And where I think it's going to go and the specifics to you are going to be different for every single person. But over time, what I think is going to happen is there's going to be a digital economy. Now we kind of have one now if you think about e commerce buying things online, that side of things. Sure, that could be called a digital economy. But this will be significantly different. Night and day different. And we're already seeing it. If you look on news, you can kind of you can look it up, do your own research. But people are buying digital land. They're going in, they're buying digital land, to later use as if it's like real real estate in the real world. And there's been a ton of sales over the past couple months since pretty much medic came out, explain their position, what they're going to do. People have gone on and started buying digital land for them to use as if it's real estate in the physical world. And so that that idea alone is insane. is crazy. But it's happening. It's happening right before our eyes. And it's something that's really cool. It's just something that we're gonna have to get used to, right. And I think this slow transition over time where you kind of see these new stories come out. We're gonna slowly get used to it. But that's definitely the first domino to fall. It's showing that people are interested in what this Metaverse thing is going to be. How do I participate? What is my role? And if you think you're in this as a real estate owner in this metaverse. They go and purchase some that's what they're doing right now. So it's kind of easy to see now that the metaverse is going to be its own digital economy goes way beyond selling goods and services online. Way beyond that. And you're seeing it with land purchase, like I just said, it's gonna mirror what the physical world real economy that we know to be today, it's going to mirror that exactly. So there's going to be people that go in and buy land, there's going to be people on that land that sell ad space, there's going to be people that through that ad space, sell their own services or own goods. And this is all within a virtual world, which is the hardest part to wrap your mind around. But that's exactly how this is going to look. So you'll put your goggles on, you'll put your got your glasses on, you're going into the metaverse, whether it's in Nikes world or metals world or you name a company's world or your own world that you created your friends world, whatever it is. And potentially you could see ads just like we do in the physical world right now. And they'll be selling goods and services specific to the metaverse and the digital world that's being created. So with that in mind, we're seeing that companies that are in the physical real world right now are making the transition to say how do we become a part of this? What is our role? We want to capitalize on this, how do we do so? And I think that comes down to really three main parts categories for companies in the beginning is the same categories that we have in in life now. And that comes down to hardware. It comes down to products. And it comes down to services, hardware, goods, services. Nothing changed. Sounds familiar, because it is familiar. But different companies will play their different roles in this. So I'm going to kind of break down what company is going to play, what role and the steps are taking. So we can already see the steps that are being taken to mirror what's happening in the real world right now and the metaverse. And so let's start with the hardware side of that, because that's pretty much a hurdle to get in, right. That's the barrier of entry. You need the hardware to access the world, the digital world. And so there's two companies that come to mind right off the bat that are 100% going to sell the hardware, they're already doing it. They're ahead of everyone else in it. They're going to continue to do that. And one is Mehta, formerly Facebook. The second is Microsoft, always been Microsoft. Mehta and Microsoft sell very similar products and meta has the Oculus. I'm not sure what Microsoft is called. But pretty much they sell the goggles and the hardware you need to access and go into the metaverse. So they're going to continue to do that. There's no doubt about that. They will continue to do that on that side of it. But that's not to say now that the companies can't come into that. Right? Well, paazl intermission in the action out of nowhere. Because my camera stopped recording I have nowhere to and tell me the whole thing. It was a whole thing. And I found out but we're back. So let's do let's go right back into that conversation. I was talking about hardware. I was talking about meta and Microsoft and how they're going to sell how the the hardware to get into the metaverse and then what I was going to branch into talk about before my camera stopped recording was I was going to talk about how there's going to become competition in that space because there's absolutely going to be competition. There's going to be goggles that are better for you than someone else glasses that are better for you than someone else. Whether you're in there 12 hours a day or you're in there one hour a day whatever price point they come in at competitions going to do what competition does, we see that in cell phones devices services, now she was gonna do it. It is it's, it's how competition works. And it's going to be different for everybody for what they need and want out of their headsets to get into the metaverse. So that's going to be there. Now if we go next into the goods slash products part of things, and where things get really, really interesting. So two companies come to mind right now that I will not do my research. I saw that they're doing some pretty cool things that both I think relate into this Metaverse and digital world. One is Nike. And the other one is Ralph Lauren. And I'll dig into both of them right now. So and Nike. What they're doing is they've already said listen, you are going to be able to buy the coolest hoodie you want the best shoes you want. You want some Air Jordans in the metaverse Go ahead, buy and put them on your digital avatar. You know how they're Jordans in the metaverse. You want the hoodie, but get the Id put it on your digital avatar. So you can buy these products so you can buy their clothes to put on your digital avatar in this digital world. That is the metaverse and for those of you saying there's no way there's no way I'm buying anything product wise for my digital avatar to run around in for when I'm playing my games or whatever I'm doing. fortnight is the prime example that even though you will not buy them, people out there will buy them so I looked it up here. fortnight if you don't know what it is, it's a game that pretty much took over the world between 2018 2019 Everyone was playing it everyone was talking about it was like the coolest thing that's ever happened to video games. So fortnight is a free to play game. There is no price point to get in. Free to Play Download Play. Nothing to it. However we're fortnight decided to make their money. Such popular game we got to try to capitalize on this base all different skins pretty much outfits for your character on the game to wear while you're playing. So if you wanted to wear like a suit like you look like John Wick, cool by that suit, you wanted to look like a clown run around cool by the cloud to whatever you want to do. You can buy the skin you can deck out your character and whatever you want to buy. Remember free to play game. You could purchase these skins if you want to wear In 2019 fortnight well Epic Games, which ran fortnight just from the just from fortnight alone generated revenue of 3.7 billion US dollars and 2019 free to play game. The only thing you could buy or skins, or like cool cosmetic stuff $3.7 billion. So when Nike says you can buy our stuff on the metaverse and deck out your digital avatar, people are going to do not saying you will not say and I will, people are going to do it. And there's going to be other companies that come forward and say like, Hey, you can buy our things and your digital avatar can wear them. And what I'm really interested to see where that part of it goes is if I buy a Nike hoodie, and the metaverse do I now is Nike going to have like a promotion where I can get that hoodie in real life as well. Or if I buy it in real life? Do I now get a code to have that in the metaverse? So I'm curious to see where that part of it goes. Because then you might actually gain more sales. Because if it's a hoodie I want and I sure I can't justify buying it for my digital avatar to wherever. But I can also have it in real life. I mean, why not buy it at that point, right? You get two for one, pretty much. Kinda, I guess, in some weird way. But I don't know if they're ever going to do that. But I think it would be a cool idea. And that would potentially have people like myself, who typically wouldn't buy these things, go ahead and buy him. But the overall idea stays the same that people on the digital economy, whether you could have it in real life or not in the metaverse, they will buy it for their avatar look the coolest that it can possibly look. There's gonna be a lot more companies that do it other than Nike, one being and they took a little bit different approach Ralph Lauren. So when I think Ralph Lauren, and I kind of think older company kind of been around for a while not really on the cutting edge of technology. I was very wrong. I was very wrong. So what's cool about Ralph Lauren, and what they did, they partnered with Snapchat, or they worked with Snapchat to do this. And so they want the augmented reality space. Very similar to the metaverse in virtual reality, just slightly different, but. And on mobile, it all blends together at the end of the day. So what Ralph Lauren did was we know not everyone is in New York City. So what they said, We know you're not here, we know that you cannot go to our headquarters shore if you want to, and purchase something off the rack like you want to. Here's what we'll do. We'll make it. So you have a device where you looks like you are walking around our store. In New York City, it looks like you are in the headquarters. And even though you're sitting in the middle of Indiana, what's up in New York City shopping, if you want something from the store that you saw, select it, buy it, send it to you. And so that's what they did. They gave people this experience of shopping in the headquarter store, even though they could have been ponderous, 1000s miles away. That's going to happen in the metaverse where companies like Ralph Lauren will come for like, Hey, listen, if you want this in real life, that's cool. So what we're gonna do for you is we're gonna let you shop as if you're here, you select the select the size, the color, whatever you want, ship it to you, even though you're not here, that's going to happen where they kind of have this your shopping here and our mainframe, our mainstay store, even though you're not actually physically here, it's a little bit different of approach than Nike took that you can actually deck out your digital avatars with our gear, and I'm sure potentially Ralph Ron takes that approach as well. But I know being able to put people in places that make it feel and look like they're in that place is an avenue that these stores are going to, to kind of take going forward and in a really cool idea of breaking down link boundaries at that point, right because you don't need to be there in real life if you can walk around and shop in this virtual reality and it looks the same doesn't feel the same but it looks the same. All from the comfort of your home. So that's kind of where the product side of things is gonna fit in. People are going to buy these things for their digital avatar. Whether you agree with it or not, I don't but they're going to buy them. They're gonna want their avatar look as cool as it possibly could. They'll probably have different outfit choices you can choose from the probably purchase those as well. It's going to be something like it is in real life where people buy multiples of everything because you want choices. Now some of us do it because laundry day comes around and we need we need something clean But in the metaverse, it's just going because you want options to make your your avatar look cool. So those are two companies that are I've seen icon on the cutting edge of that taking two different approaches, but it's a very one for one where you see how they operate in real life is very similar to how they will operate in the metaverse. It just takes a kind of step forward, that they can take this approach and can open up themselves to a whole new line of consumers, which is which is pretty sweet. Now, we got through the hardware how we're going to get there, Microsoft Mehta, they're going to create the goggles, glasses, whatever it is, we're going to get there. We're going to be in the metaverse, we got to deck out our avatar Nikes coming in big with some hoodies and sneakers that we can wear. The next side of that is services. What do services look like in the metaverse? There's two companies that I want to specifically talk about when it comes to services again, just like the last one, two very different approaches, one being Roblox the second one being Shopify, so if you don't know Roblox is Roblox is a video game company that in my opinion is far beyond any other video game company at this point as far as cutting the cutting edge of technology. And what the metaverse is going to look like their best poised for it at the moment again and my opinion. So what they do is Roblox is a video game platform that gives creators the tools and ability to create their own games on the Roblox platform. So if I wanted to be a creator, that make a game that you drive around the car and like a car driving simulator, as boring as that is not very creative at the moment. I can do that through Roblox. They give me the tools that I need to go ahead and create that game now, where Roblox takes the next step of the cutting edge of technology conversation. In there, a step beyond what other companies are doing is they create their own economy within Roblox on their creators. So if my game, the driving simulator, has a ton of traffic on it, players love to come play it, there's a ton of them playing. Somehow I've found a way to monetize it within the game. And there's a monetary aspect to it, Roblox will take that and give me a cut due to the traffic and monetization of my game. And they do it in their own currency called robots. So you make that money, they kick it back to us as a form of payment in robots, you then use that payment within the game or you convert it make some money that way to USD whatever it is. So they have already shown that within the metaverse, there's going to want to be creators to that make their own world that make their own games and the want to monetize those and get monetary a monetary reward for doing so. And there's there's been people that just want to create it to create it so people can come and have fun. But Roblox is showing that the digital economy of here's a service you provided, here's a monetary reward for doing that and keep doing so. So we can keep coming in this monetary award, just like it works in the real life economy will work the same in the digital economy. A little bit different because it'll just be like robots doesn't and roebucks currency other companies will do in their own currency, should they take the same approach? We'll see what it looks like fully built out in the metaverse but the foundation is there that Roblox shows you as a creator, we will give you what you need to create the games you need to create for people to come and play and for you to get rewarded on that side of it. So that's the approach robots are going to take and it's going to transition into the metaverse perfectly. Nike is working with Roblox on creating their own world Nike land where as a player, you can go on there and you can play. Like, whatever games that Nike has created for you to play as a player. You can go on there playing with your friends playing with strangers in Nike land, and then you can earn awards and go from there. I'm not sure if they have the apparel side built out yet where you could buy that for your Roblox character. But I know Nikes taking the steps forward and saying okay, how do we build a world in Roblox? What does this look like for players? What are the rewards? How do we give them? How do we transition this to the metaverse? This is obviously the building foundation. This is the proof of work, proof of concept but work what's getting on this side of it and then build from there. So Roblox is doing some really, really cool things. The second company that I want to talk about from the service side of it is Shopify. Now, if you don't know what Shopify does, they're pretty much the company where if you're trying to run a small e commerce business or a large e commerce business, whatever it may be, you go to Shopify to do so they're there, they help in immense ways. So what they'll do is they'll give you the tools that create the platform, great the website that you're using, and then they help with the transaction side of it, the back end of what that looks like behind the scenes. So pretty much one stop shop for running an online e commerce business for both small and large businesses. Now, there's gonna want to be a small business or a large business presence transaction based ecommerce online in the metaverse. It's just going to want to be that. So I can see Shopify taking that step and saying, Okay, we've already shown proof that we can do this in the real world. Well, let's transition to the metaverse. Let's find out how we do that here. Let's figure out what people need to have as a platform or foundation that we can provide and let them do what they need to do. But with our guidance and our foundation under him, good model tools give him everything necessary. So I can see Shopify taking not approach little different from the Roblox approach, that Roblox can help people potentially create worlds or different games. Shopify might just be the transaction side of things. But they already work with meta on their transaction side of their business. So they're showing that we'll move step by step in step with metal and creating this Metaverse and whatever that looks like for us on our own side of things helping out whoever needs it, they can do that. So I think that'd be pretty cool. When the metaverse time finally comes around, and Shopify is fully engaged in it. What that looks like for someone like you or I just trying to start an E commerce business. If Shopify helps in that I'm I'm very curious and excited to see what that looks like. I'm really, really excited to see what robots looks like in trying to build out different worlds or different games for people to come and play in creating that digital economy. And seeing how matches one for one with the real world economy. And there's obviously some of the questions. There's always going to be of other things within the metaverse will worlds that you create or someone creates a business grades, are they going to be open or closed? meaning are you going at the pace like a fee to get in like you're paying a bouncer at a bar? Here's five bucks let me in your world for however long want to be here for to play the games to have the experience, whatever it may be? Are they all going to be open? And you can just kind of operate between them and do whatever you want to do? Is there going to be any governance within these worlds will you can do ABC but doing XYZ is not allowed? It's against the rules gets a kick out, those kind of things are going to work themselves out. That's why there's gonna be multiple parts after this part to this Metaverse conversation. I really just wanted to come on here and talk about the different companies that are taking the step in the metaverse to kind of show you how it's a one for one change in some ways where the same companies we operate with now, in real world, real life, everyday life will be the same in the metaverse in this digital economy, there's going to be new ones that come to the forefront as well, that do some really, really cool things. But there's going to be companies that have already established themselves moving into that space and trying to branch out and kind of build their what their businesses. So it's consumers investors, we have some questions, consumers, are we going to buy the Nike hoodie and cool sneakers? Are we going to do that side of it? Or are we going to go through Roblox and create our own worlds in games? And what does that look like from us? What kind of function do we have? And as consumers? Are we going to transact? Are we not going to what does that look like? And then as investors, we see the companies wanting to take the step. Other company has mentioned pretty much all the big tech companies are going to have their hands in this when the time comes. Apple, Amazon Microsoft already does meta already does. Maybe Netflix gets involved, other companies will get involved. So when they do and if it works, what their concept does what they're trying to do. If it works in the in the digital economy, that is the metaverse is going to be kicked back on their bottom line within real life. And because of that their companies are going to look a lot more enticing from an investor point of view, because they're going to be rewarded for their successes in the digital economy. And because of that be rewarded in the real life economy. So as an investor, you kind of have to think and question what companies are going to take this next step into the unknown. That is right now the metaverse and what are they going to do to kind of carve out their own blueprint their own footprint within their now? Do I believe in what they're doing? Or do I not believe in what they're doing? Do I not think their idea is going to work? And do I get in on the ride now? Or do I wait to see how it all kind of shakes out and jump in after? And those are kind of some questions you have to think about us as investors for this like do you believe what Nike is going to do? Do you think they're going to sell a bunch of apparel in the metaverse? Do you jump in now as an investor? Do you wait? And other companies like Roblox Mehta, Microsoft, do you believe in what they're doing? Do you not believe in what they're doing? Do you think there'll be some competition that derails their plans or potentially kind of changes what the landscape is? So there's a ton of question does both a consumer and investor it's just really, really exciting at this point to think we're on the cusp of something brand new to all of us. Nobody knows really how it's going to play out 100% It's just the writing's on the wall for some of the pieces to fall into place for it to be a digital economy that people really love to go to and participate in. Other than that, we'll see what happens and how it goes, especially on a person to person basis, but I'm really excited for more kind of news to drop on the metaverse so I can drop another part to this and talk about that digest it tell you guys what's going on there. But until then, we'll leave this at this one and we'll see you in the next part comes out but until then guys stay happy, stay healthy, and I'll catch you on the next one. Securities offered through securities America Inc. Member FINRA slash SIPC. advisory services offered through securities America advisors Inc. 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