The metaverse, an immersive digital world that Facebook owner Metaplatforms (FB), Microsoft (MSFT), Roblox (RBLX), Nvidia (NVDA) and others has the potential to become a $13 trillion market opportunity, a new report from Citi says.
The 184-page report explores many aspects of the metaverse, such as infrastructure, non-replaceable tokens and gaming, as well as e-commerce and various business and consumer applications. The total number of metaverse users could reach 5 billion, said Citi, which released the report late Thursday.
“We believe the metaverse could be the next generation of the Internet — combining the physical and digital worlds in a sustained and immersive way — and not purely a virtual reality world,” according to the Citi report, titled “Metaverse and Money.” “.
Citi’s analysis of the next-generation Internet includes a concept called Web3.
Web3 is described as an open version of the Internet that gives users more control over personal information. It also provides a method that gives users ownership of what they create, which also helps them monetize. Many consider the metaverse and Web3 complementary concepts.
Web3 uses Metaverse
Web3 can use all the technologies needed for the metaverse. It also makes extensive use of blockchain ledgers, cryptocurrency and NFTs.
In October, Facebook announced its name change to Meta, marking a new direction for the social networking giant. But work on the metaverse among tech giants was already well underway.
In November, Nvidia CEO Jensen Huang said the virtual world will be bigger than the physical, not in scale, but in economics.
“It’s a 3D extension of the Internet that will be much, much bigger than the physical 3D world we enjoy today,” Huang said in an interview with Yahoo Finance Live at the time.
Nvidia has a platform called Omniverse, which is an open-source tool that allows users to build virtual worlds using artificial intelligence and 3D modeling.
A huge increase in calculation
But building the metaverse and Web3 requires computing efficiency improvements more than 1,000 times above current levels, Citi said.
Cloud computing, edge computing, 5G wireless, gaming platforms and network infrastructure play a huge role for the metaverse to reach its potential, Citi said. Augmented reality and virtual reality gear will be a portal to enter the metaverse.
Use cases include commerce, art, media, advertising, healthcare and social collaboration, Citi added.
Goldman Sachs estimates that global investments in the metaverse and Web3 could exceed $100 billion. Meta invested $10 billion in the metaverse last year.
JPMorgan and Goldman Sachs have published extensive reports on metaverse and Web3, each with an economy of $8 trillion.
Businesses Enter the Metaverse, Web3
The Web3 metaverse remains undefined and in the early stages of development. But enough has been developed that walmart (WMT), Disney (DIS), Nike (NKE), Adidas, Samsung, McDonald’s (MCD) and a growing list of other brand name companies are jumping on these virtual platforms.
Most of the Web3 platforms available today such as Sandbox and Decentraland are in the gaming realm where Roblox is expanding.
Meta and Microsoft have also developed virtual workplaces where people can meet virtually.
Facebook shares rose 1.1% and closed today at 224.85 in the stock market. Microsoft rose 0.4% to 309.42. Roblox fell 0.5% to 46.02 and Nvidia fell 2.1% to 267.12.
Follow Brian Deagon on Twitter at: @IBD_BDeagon for more information on technology stocks, analysis and financial markets.
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