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Recently, Mark Zuckerberg, the founder of Meta, posted a selfie of his avatar on Facebook and Instagram to celebrate the launch of its virtual community platform Horizon Worlds in France and Spain. However, netizens mocked the metaverse platform in the photo for looking inferior to the PS1 games released in 1990s. Zuckerberg later conceded the photo was a rushed selfie he took.

Metaverse Expected to Contribute $3 Trillion to Economic Growth

Zuckerberg brought the global metaverse hype by renaming Facebook as Meta Platforms in 2021. Public expectations of him as a pioneer are understandably high. But development of the metaverse is not limited to the US. In a white paper this year titled “The Potential Global Economic Impact of the Metaverse”, the consultancy Analysis Group predicted that the metaverse could contribute $3.01 trillion (around HK$23.6 trillion) to global GDP by 2031 if development starts in 2022. That would represent 2.8% of the projected total global GDP, with Asia-Pacific accounting for a third at $1.04 trillion (around HK$8.16 trillion), followed by the US and Europe.

Meta’s Horizon Worlds is currently among the most visited virtual worlds. By April this year, in just four months after launch, the platform had 300,000 registered users who created 10,000 virtual worlds.

Notably, the Fortnite, released by Epic Games in which Tencent has nearly a 50% stake, boasts over 350 million global players. According to Dutch research firm Newzoo, Tencent’s gaming revenue reached $32.2 billion last year, far exceeding Sony’s $18.2 billion and Apple’s $15.3 billion, which is attributable to its extensive investments in European, US and South Korean gaming firms.

Large Gaming Companies Aggressively Acquiring

China halted new game approvals in August last year before resuming in April this year. However, Tencent’s games have repeatedly been rejected. Still, Tencent’s domestic gaming revenue only fell 1% in the first half of this year, while its international gaming revenue also just dipped 1% based on constant exchange rates. Tencent will likely continue expanding overseas - 40% of its investments in the first half of this year were outside China, up sharply from a total of 18% in 2021.

The metaverse’s rapid evolution is spurring acquisition activity among large gaming firms worldwide. Microsoft announced a $68.7 billion deal in January to acquire the renowned game publisher Activision Blizzard. The next month, Sony spent $3.6 billion to acquire Destiny’s gaming studio Bungie.

Unmanned Livestream Commerce Thrives

In China, platforms like Douyin and Kuaishou have sparked a metaverse livestreaming trend. Users enter virtual scenes like square dancing, subway taking and Three-Kingdom battlefields via avatars and interact through likes, comments and virtual gifts, enjoying immersive entertainment. The 24/7 unmanned livestreaming generate incredibly substantial revenue. Taobao has heavily promoted virtual live streamers in various scenarios this year to boost live commerce transactions.

To tap the metaverse’s full potential, one should not look at just one market, and a global perspective is crucial. Investors may pay attention to the metaverse-themed ETFs that track the metaverse-related stocks worldwide. Despite deep paper losses, Warren E. Buffett continues buying amidst market turmoil, but with far lower net purchases, showing he is not blindly contrarian but confident in “investment value”.