Maybe you already know a lot about what the metaverse is, or maybe, like most people, you've heard the term but aren't exactly sure what it means. For those who fall into the latter category, the metaverse is a network of virtual worlds where users interact in numerous ways, often in an immersive 3D environment that can include an avatar. Some examples include attending a virtual concert with actual musicians performing, going shopping in a virtual mall, touring far-off travel sites or attending an office meeting without leaving your home, or just hanging out with friends from around the world in some arranged virtual location.
Whatever the metaverse ends up being, there are a handful of companies that are investing lots of time, resources, and expertise to develop it. Some of it has already been created and is being used right now. But it's far from being completed. Investors may want to take notice of this part as some experts are projecting the metaverse could end up being a nearly $640 billion market in less than 10 years. Let's talk about three companies that already have a leg up in building out the metaverse.
Image source: Getty Images.
1. Meta Platforms
When Facebook announced that it was changing its parent company name to Meta Platforms (META -10.56%) last year, it showed just how serious the company is about pivoting toward the metaverse. But Meta is doing more than just talking about it. The company is already working on a metaverse ecosystem by creating both the hardware and software for it.
Meta already owns a virtual reality company, but its new focus on the metaverse will merge its VR ambitions with augmented reality (AR) and combine them into a digital marketplace -- called Horizon Marketplace -- for developers and companies to make money.
Meta's ambitions for the next evolutionary stage for the internet are no small feat. The company is spending billions of dollars in its metaverse-focused company, called Reality Labs, to lay the groundwork for this new technology shift.
Could Meta miss the mark? Sure. But the company's early investments in VR, AR, and developing an entire metaverse marketplace means investors shouldn't overlook Meta's opportunity.
If the metaverse becomes as big as many are predicting, there's a very good chance Meta will benefit from it. And once it happens, investors who got in early on it will be glad they did.
2. Nvidia
At the heart of the metaverse will be high-powered processors that are capable of processing the tons of data needed to make it all work, including generating amazing graphics. Without graphics processing units (GPUs) that can handle VR and AR, as well as artificial intelligence to make interactions even better, the metaverse won't get off the ground.
Fortunately for Nvidia (NVDA 3.71%), the company excels at both. Nvidia is already a leader in the gaming GPU market, and its chips are increasingly used for AI processing in data centers. The company has used both its gaming and AI prowess to create its own metaverse tool called Omniverse.
Nvidia has been working on its Omniverse platform since 2019 and it includes tools for creating avatars, a system for training neural networks with AI, and a platform for building 3D virtual worlds. In short, Nvidia's Omniverse could help companies and developers get their metaverse ambitions up and running. Nvidia CEO Jensen Huang recently said the "Omniverse brings together Nvidia's expertise in AI, simulation, graphics and computing infrastructure."
That's great news for the company's investors because Nvidia's gaming and data center sales growth has exploded over the past two years, even before its metaverse opportunities are fully realized.
Gaming revenue is up more than double over the past two years, and data center sales have spiked 237% over the same period. And if Nvidia's Omniverse succeeds in becoming an onramp for developers' metaverse creations, the company could see even brighter days ahead.
3. Roblox
While Meta and Nvidia are clearly ramping up the metaverse ambitions, Roblox (RBLX 1.60%) started trading as a public company last year specifically with the metaverse in mind. In fact, the company mentioned the term 16 times in its S-1 filing.
Why does that matter? Because Roblox is a unique virtual platform company that allows users to not only play games but also create new ones as well. The metaverse will be a collaborative environment, not built by any one company, and Roblox's platform matches up very well with this idea.
Games on Roblox can be created by traditional gaming companies, but they're also created by users. And this setup has proved to be a successful one, with the platform already attracting 29 million developers and counting.
It's not just developers who are flocking to the platform. Roblox ended 2021 with nearly 50 million daily active users spending almost 11 billion hours engaged on its platform.
And all of those users helped generate nearly $2 billion in sales for the company in 2021 -- up more than double from 2020.
Roblox has already changed how some people view gaming, and with the company's focus on providing creators with the tools to make new things on its platform, this company appears tailor-made for the coming metaverse.
