Roblox Game – Taking Your Portfolio to the Metaverse? Start with these 3 actions | Zoom Fintech

Roblox Game – Taking Your Portfolio to the Metaverse? Start with these 3 actions

Companies have been fighting to keep us entertained for many years, from radio and television to movies and games. The “metaverse” is the newest chapter in entertainment, and its growing popularity means investors should at least know about it. Here’s why the Metaverse is important and three actions that are about to benefit from it.

What is the metaverse?

The metaverse is where the physical and digital worlds meet. Think about the physical world we live in and the digital world we access through the internet. Technology has advanced and the way people interact has become more digital over time.

The digital world has evolved, from basic online connections such as email and instant messaging to social media and large online gaming communities such as Fortnite and Minecraft.

Image source: Getty Images.

Until recently, the Internet and games were separate from the physical world; you would log in to access it. With the gradual advance of virtual and augmented reality and the improved connectivity of 5G, the ingredients are here for the next advancement in the way we interact. The digital world is starting to overlap with the physical world.

It’s still unclear what the Metaverse will look like, but it could be huge. According to research firm Strategy Analytics, the global metaverse could be worth $ 280 billion in 2025 and will likely continue to grow from there.

1. Unit

Unity software (NYSE: U) operates one of the two main 3D engines, with Epic Games, the creator of Fortnite. Together, these two companies form a duopoly on 3D creation.

Unity is used by 94 of the top 100 game development studios by revenue, and its platform reaches 2.7 billion active end users. Unity is best viewed as the “pickaxe and the shovel,” the infrastructure that will be used by many creators to build the virtual metaverse landscape.

Unity’s revenue grew 41% year-over-year in the first quarter of 2021, and management expects 31% growth and total revenue of $ 1 billion for the set of the year. Unity’s potential goes beyond gaming; the platform is used in industrial applications, automotive, film, animation, engineering, etc.

Customers spend 40% more each year after using Unity, so the company could continue to grow revenue quickly as its software is used in more and more industries.

2. Roblox

Roblox (NYSE: RBLX) is an online entertainment platform where creators can develop games and experiences, and users can participate. Roblox operates as its own economy, with its own currency (Robux) with which creators and users transact.

For now, Roblox is arguably the closest to any public company to emulate the concept of the metaverse. Users can interact and socialize on Roblox and enjoy personalized experiences, like when Roblox partnered with Walt disney for a Star Wars project in 2019 or when musical artist Lil Nas X did a live gig on Roblox in 2020.

Roblox’s primary user base is made up of children and has seen a huge acceleration in growth during the pandemic. In the first quarter, revenue grew 140% year-over-year, and the company is expected to increase revenue 169% to $ 2.47 billion in 2021 while posting earnings per share of 0.79 $.

It remains to be seen whether Roblox can expand its user base to older demographics, which could be a long-term hurdle for the company if it is unable to do so.

3. Facebook

Besides its popular social media platforms, Facebook (NASDAQ: FB) is also a major player in augmented reality (AR) and virtual (VR) with its ownership of Oculus.

CEO and founder Mark Zuckerberg is one of America’s best-known executives, and has already proclaimed that Facebook will become a “metaverse company” over the next five years, a move that signals the mix of Facebook’s social network and its ambitions in AR and VR.

Facebook is the largest and most mature company in this group, and it’s a cash cow. It generated $ 7.8 billion in free cash flow in the first quarter of 2021, more than the revenue Unity and Roblox will generate all this year – combined.

Zuckerberg is assembling a management team to work on Facebook’s metaverse agenda. It will be revealed over time if Mark’s vision will come true, but if one thing is certain, Facebook has the resources to make that vision a reality.

Here is the bottom line

The Metaverse is an exciting concept that is still in its infancy. Investors could benefit from broad exposure to these three companies. It will be difficult to know who the big “winners” and “losers” will be for years to come, but these companies stand a good chance of being in the mix due to their diversity.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a premium Fintech Zoom consulting service. We are heterogeneous! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.

Roblox Game – Take Your Wallet to the Metaverse? Start with these 3 actions

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