A group of seven counselors from various industries, including journalism and gaming, started an Exchange Traded Fund (ETF) on the New York Stock Exchange on Wednesday. It’s a basket of securities that trade like a stock, bundling companies the council deems to be in the best position to build out the Metaverse. The ETF is sponsored and maintained by Roundhill Investments.
While seeds of the Metaverse — best described as an all-encompassing, ever-present Internet society — have existed for decades, the pandemic and its resulting global quarantine have not only raised awareness of the Metaverse term, but also hastened its formation. The major pivot from in-person work and socialization to online life over the past year-plus has expedited the process both in terms of how content is created and distributed, as well as the willingness of consumers to participate in this untraditional, all-digital world.
“Like the mobile Internet and the fixed-line Internet before it, the Metaverse will transform nearly every industry and involve the creation of countless new businesses,” said Matthew Ball, managing partner of venture firm EpyllionCo. Ball, along with his group, created the index and has written influential essays on the ongoing evolution of the Metaverse.
Joining Ball on the ETF’s council are: Jerry Heinz, former head of enterprise cloud services at Nvidia; Jacob Navok, co-founder and chief executive of Genvid Technologies; Jesse Walden, managing partner of Variant Fund; Jonathan Glick, former New York Times senior vice president of product and technology; Anna Sweet, chief executive of Bad Robot Games; and Imran Sarwar, formerly from Rockstar North where, among other projects, he worked as co-producer and designer of “Red Dead Redemption 2” and “Grand Theft Auto Online,” the most profitable entertainment product ever made.
Ball said both Roundhill and his company get a small percentage from investments in the index.
Epic Games chief executive Tim Sweeney has been loud in his intention for the publisher’s popular battle royale game, “Fortnite,” to become a big part of the Metaverse. Meanwhile gaming platform “Roblox,” which has allowed a generation of kids to create their own virtual worlds and experiences, went public earlier this year, and it had a market cap of $52 billion as of June.
Despite the increasing prevalence of the term, the nebulous nature of the Metaverse has caused many to misinterpret the term. Some analysts and media articles have mistakenly labeled “Call of Duty: Warzone” a Metaverse just because it included Rambo and other action entertainment properties in the game. But the Metaverse is more than just a game that incorporates other companies’ intellectual property. Instead, it’s an Internet where people will more tangibly replicate many common aspects of real world life, including socialization, commerce and entertainment.
Ball has written several essays in recent years that popularized observations on the Metaverse. As part of the fund, Ball is writing an additional series of essays that establish the framework of the Metaverse, and how to think of it.
Just as the iPhone or Facebook can’t be called the Internet, neither can one video game — whether it’s “Fortnite” or “Roblox” — can be referred to as the Metaverse, Ball said. But video games help widespread acclimation and understanding of how a Metaverse can operate. Ball writes in his essay detailing the slow but steady industrial adoption of electricity, and compared it to the rise of the mobile Internet and the factors that led to the groundbreaking invention of the iPhone.
“The Internet was once envisioned as the ‘information superhighway’ and ‘World Wide Web.' Neither of these descriptions were particularly helpful in planning for 2010 or 2020, least of all in understanding how the world and almost every industry would be transformed by the Internet,” Ball said. He added that even if user-generated content was predicted, the specific ways of how social platforms Twitch or TikTok are used were not anticipated. “And even if one could have predicted the technical or operational principles of these products and services, the behavior of their users, monetization models and broader impact on society was unknowable.”
China’s Internet users are likely ahead in terms of its adoption. Tencent, the tech conglomerate that holds significant stakes in U.S. film companies and gaming studios, has a diverse portfolio that includes investments in Epic Games. Additionally, the app WeChat has already been called a “2D Metaverse,” a place in which customers can do practically anything. Users can socialize, shop, create, pay for things in the real world and communicate for work.
Ball writes that generational change is going to lead this global shift in how people create and consume content. Some parents may dismiss “Roblox” as a virtual babysitter or a distraction for their kids. Even digital native millennials might scoff at why children would want to use technology that appears primitive, not fully understanding the creative potential “Roblox” may be unlocking.
“Today’s generation of children express themselves, often learn and constantly socialize through virtual worlds they can touch, change and collaborate in. That’s not going to stop,” Ball wrote in his essay. “Rather, the capabilities of these virtual worlds will expand, their ease of use will improve, and their significance will grow. What’s more, the ‘iPad native’ generation will continue to mature. Most are still consumers, a few are creators, and almost none are business leaders. They will be, and their frames of reference will lead to transformative change.”