These days, it seems like every company has some grand ideas for the "metaverse," which will merge the physical and digital worlds. Some companies are starting small by selling non-fungible tokens (NFTs) for virtual goods, while others are planning to build entire virtual worlds.
All that noise can make it hard to distinguish the hype from the reality. So today, I'll take a look at four companies that could actually benefit from this secular trend and permanently transform how we interact with each other.
1. Meta Platforms
Meta Platforms (META 0.85%), the company formerly known as Facebook, adopted its new name to reflect its long-term focus on the metaverse. It already has many of the building blocks to construct that virtual world.
A whopping 3.58 billion people already use at least one of its apps (Facebook, Messenger, Instagram, or WhatsApp) every month. It's reportedly sold over 10 million Quest 2 VR headsets over the past year, and it just launched Horizon Worlds -- a VR world that will enable those headset users to interact with each other. It recently released its first pair of smart glasses, and it plans to launch more advanced AR headsets in the future.
As Meta puts all those pieces together, it will expand its reach far beyond PCs and mobile devices. People will eventually be visiting each other's profiles in VR or using its AR tools to scan real-life objects. In other words, it could transform the entire world into one big computing platform.
Roblox's (RBLX 3.23%) ambitions aren't as grand as Meta's, but they're easier to understand. Roblox's platform enables its users to create simple block-based environments and games for each other without any coding knowledge. It's tremendously popular with children, and its creators can monetize their games with an in-game currency called Robux.
Roblox is a self-sufficient ecosystem because it relies on its audience of nearly 50 million daily active users to create and explore new virtual worlds. The expansion of that ecosystem will convince more companies to build their own worlds within Roblox's universe to reach more consumers.
That's why Nike (NKE -0.21%) just launched a virtual theme park called Nikeland on Roblox, which lets players compete in virtual sporting events. If more brands follow Nike's lead, these metaverse-based promotions could become much more important than traditional marketing campaigns.
The Japanese gaming giant Nintendo (NTDOY -0.39%) also owns many of the ingredients to create a massive metaverse ecosystem. It's shipped 98.1 million Switches since March 2017, and those hybrid devices can be easily converted between home console and handheld modes.
Carrying a Switch around is less cumbersome than wearing a VR headset, and the devices can also be converted into VR headsets with a Labo kit. That versatility makes the Switch an ideal platform to launch immersive multiplayer games like Animal Crossing: New Horizons.
Nintendo has already shipped nearly 35 million copies of Animal Crossing: New Horizons worldwide, and the hit game is already a mini-metaverse that allows players to own homes, perform jobs to earn an in-game currency, and socialize with other players. That foundation could lead to the development of other Switch-based metaverse experiences in the future.
4. Match Group
Match Group (MTCH 1.21%), the online dating giant that owns Tinder and more than a dozen popular dating apps, serves over 16 million paying users worldwide. On their own, Match's dating apps can already be considered metaverse products that help people meet each other digitally.
However, Match has much bigger plans for the metaverse. It's currently testing out a new feature called Single Town across college campuses in Seoul, South Korea. The app enables its users to communicate with each other through digital avatars in virtual environments like a bar or a park. It's a bit like a dating-oriented version of Animal Crossing.
During last quarter's conference call, CEO Shar Dubey said Match was seeing "encouraging early signals" in terms of engagement rates among Gen Z users on Single Town -- which strongly suggests we might see similar game-like features for its other dating apps in the near future.
It's not just a hot new buzzword
It's tempting to dismiss the metaverse as another hot tech buzzword that tethers existing technologies like multiplayer games, persistent online worlds, and virtual goods to the AR and VR markets.
However, the metaverse can fundamentally change how we interact with each other -- as Meta, Roblox, Nintendo, and Match are now demonstrating. These efforts might not boost their near-term revenue, but they could help them eventually evolve into very different companies over the long term.