Look for Matterport (MTTR +0.00%) to be waist-deep in the metaverse come this time in 2025. This tech stock has staked out some prime real estate in this just-emerging concept, and assuming it actually comes to fruition, Matterport could be the big dealmaker in the space.
A lot needs to go right, of course, including people actually accepting the metaverse as a real thing they want to be involved in. But corporations and brands think this could be the future of how they interact with consumers (and among themselves), and they're already moving the furniture in to set up camp.
So let's see how Matterport will fare over the next three years.
Image source: Getty Images.
Of course, first it's important to understand what the metaverse is. The word went from 0 to 60 in no time after Facebook announced it was changing its corporate name to Meta Platforms (FB 1.16%) and everyone collectively scratched their head and asked "whazzat?"
The metaverse is a virtual world where people can interact and connect with one another, play games, and conduct business. And if a real thing is digital -- for example, music, video, art -- it can be ported into the virtual world so that the things you know and are comfortable with will be available to you in the metaverse.
Moreover, you will be able to create your space to be just as you like it. When you don your virtual reality headset, you'll immediately be immersed in a world of your own creation, and you'll be able to meet and interact with others in their own virtual worlds.
Creating something from nothing
Matterport is the company that builds those worlds. Its spatial data platform can take any physical space, such as your current room or your house, and transform it into a dimensionally accurate and photorealistic digital rendering.
Subscribers to Matterport's service can capture, digitize, and manage one or more spaces, and for a scaled fee, share them and collaborate with others. While the vast majority of its users are on the free-to-use plan, which gives them control over one space -- sort of like training wheels to get use to understanding how the metaverse works -- Matterport is becoming more successful at converting them to subscriptions.
Total third-quarter subscribers surged 116% year-over-year to 439,000, while paid subscription revenue jumped 36% to $27.6 million. Conversions to paid plans are up 35% year-over-year.
A virtual disaster
However, part of the problem with the metaverse becoming this massive, lucrative alternate reality is that it's based on convincing millions of people it's not just some new gaming platform, and that adopting VR as their preferred existence is desirable.
People got their first taste of what living in a virtual world was like with Second Life, a platform that was popular in the early 2000s (it's said some 1 million people are still active on it) that allowed people to play, go to work, and interact just as they would in the real world. It had its own working economy that attracted the likes of Coca-Cola, Dell, and even MTV, while also presaging the collapse of the financial markets with the failure of Ginko Financial, a Second Life virtual investment bank that caused the loss of $750,000 real U.S. dollars.
Eventually, Second Life's creators banned the two or three dozen other banks that operated virtually, along with other risk-taking ventures like casinos.
Image source: Getty Images.
How big is big?
There's been sufficient distance between those events and today, though, and technology has improved considerably since then as well (Second Life was also said to be buggy and suffered from lagging).
Investing guru Cathie Wood of ARK Invest has pegged the metaverse as a potential multitrillion-dollar market, Morgan Stanley puts the addressable market at $8 trillion, and Nvidia CEO Jensen Huang told analysts he's "fairly sure" the metaverse "is going to be a new economy that is larger than our current economy." For perspective, the U.S.' GDP is $25 trillion, while the global economy is approaching $100 trillion.
Even if these seers are off by a factor of 10, it still could be big business for a company like Matterport. Wall Street forecasts the virtual world builder will see revenue triple by 2025 to over $450 million, while they've set a one-year consensus price target of almost $27, or more than double its current $12 price tag.
In three years' time, Matterport could be a virtual kingpin of the metaverse.
