The Metaverse Industry in 2023: Tech meets Gaming on a Global Scale
An analysis of the public companies in four metaverse exchange-traded funds (ETFs)
In our inaugural report, we offered our definition of the metaverse: digital worlds that are immersive, unscripted, and interactive. We also emphasized that we are still in the very early phases of the metaverse. How it will take shape is an open, generation-defining question.
For our second report, to better understand where we might be headed, we are taking stock of where things are today.
To do so, we set out to answer this question: what companies are either working on the metaverse directly or developing products and solutions that could power the metaverse in the future?
To answer this question, we focused our initial analysis on public companies. Certainly the startup ecosystem will likely produce disruptors that change the trajectory of the metaverse, and that will be the subject of a future report. But for the purposes of this analysis, there’s simply more and better information about public companies.
Our approach: We did an inventory of the companies held in four exchange-traded funds (ETFs) focused on the metaverse: Fidelity Metaverse ETF, iShares Future Metaverse Tech and Communications ETF from BlackRock, Global X Metaverse ETF, and Roundhill Ball Metaverse ETF.
In total, there were 102 distinct companies across the four ETFs. (Not every company was in each ETF though.) This provided a curated and relatively comprehensive group of companies to analyze.
Bottom line: Today’s metaverse industry looks like a mashup between technology and gaming companies with a moderate amount of global diversity. Let us show you what we mean.
Tech x Gaming
Below are the 13 companies that are held by all four ETFs. To give you a sense of a company’s relative importance in each fund, you will also see the percent of net assets that it comprises as of February 23, 2023.1
You may recognize most, if not all, of the companies:
We have the titans of tech like Meta, Apple, Tencent, and Alphabet.
Powerhouse gaming companies like Two-Two Interactive, Nintendo, and China-based Netease are also representing.
Then there’s the breakout star Roblox, which is combining gaming with elements of the best technology ecosystems (developer community, social connections) to become one of the cases-in-point for the potential of the metaverse.
Nvidia and Unity Software supply the backend power and tools for gaming content and experiences – and increasingly other use cases.
Finally, Snap (social media and augmented reality), Adobe (digital media and experiences), and Meituan (e-commerce in China), all companies that you might find on a technology-focused ETF, round out the list.
Categorizing the Metaverse Industry
These 13 companies are a representative sample. In fact, looking at the remaining 89 companies in our database, we see similar patterns emerge in the types of companies. We can organize them into three main categories: platforms & ecosystems, infrastructure, and content providers.
Platforms & Ecosystems
This category refers to the companies that are convening consumers and suppliers and/or building a diverse portfolio of businesses and experiences that keep consumers coming back. Metaverse experiences could be built on top of/integrated into these environments. Example companies include many of the names you know such as:
Microsoft – Teams and Xbox could be assets for future metaverse developments
Amazon – rumored to be launching an NFT marketplace in April, which could be a building block for other metaverse experiences
Alibaba – the Chinese tech conglomerate with e-commerce at its core has already been experimenting with shopping in the metaverse
Infrastructure
This category refers to the hardware and software builders that are providing the “picks and shovels” for the metaverse. Increasingly hardware companies also have software solutions and vice-versa. Example companies include:
Qualcomm – semiconductor company focused on wireless connectivity
PTC – software company helping other companies with digital transformation via Augmented Reality (AR), Internet of Things (IoT), and other technologies
Matterport – 3D space capture company that has both the hardware (cameras) and software
Content Providers
This category refers to the content creators and IP holders that supply platforms & ecosystems and are often enabled through infrastructure. Whatever shape the metaverse takes, content and experiences will be critical to driving adoption and usage. Example companies include:
Krafton – gaming holding company based in South Korea; notable titles include PUBG
Ubisoft – gaming developer and publisher based in France; notable titles include Assassin’s Creed
Electronic Arts – gaming developer and publisher based in the U.S.; notable titles include Madden NFL
These categories are a guide. Certainly a company can overlap between the three. For example, Tencent has developed platforms and a broader ecosystem, offers B2B infrastructure services, and delivers gaming, media, and entertainment content. But we need some way to classify these companies, and this is our initial pass.
A More Global Scope
A final observation from our inventory is the global scope of the companies working either directly or indirectly on the metaverse. Of the 102 companies we examined, half are based in the U.S., the other half are around the world. Here is the country-by-country breakdown:
U.S. 51
Japan 12
Korea 12
China 11
Sweden 4
France, Germany, Singapore, Taiwan 2
Australia, Ireland, Netherlands, Switzerland 1
The emerging metaverse industry may not be dominated by Silicon Valley as earlier eras of the Internet have been. Japan, Korea, and China will all have a role in how the future of content and connections plays out on the internet, as will other metaverse innovation ecosystems that appear to be developing around the world.
Final Thoughts on Today’s Metaverse Industry
After doing this inventory of 102 public companies, we have come to the following conclusions:
Of the public companies working directly on the metaverse – or with the capability to power the metaverse – there are many familiar players. If you’ve followed tech and/or gaming, you know most of them. If anything, this should help you better understand who is working on the metaverse. (It’s not just Mark Zuckerberg.)
Given shareholder pressures, it is likely that these companies, if they are disciplined, will stay focused on their customers’ needs – either explicit or latent. That could be a good thing for the metaverse. Rather than developing for a singular vision of the metaverse’s future (VR headsets and avatars galore), we could see alternative metaverse experiences evolve that could create excitement among consumers.
Lastly, it is clear from doing this analysis that the metaverse is not “dead on arrival” as some recent headlines suggest. All these companies are working to push the limits of human experience with digital technology. How they do so will help define the future of the metaverse and the Internet as we know it.
Holdings as of February 23, 2023: Fidelity 62 total assets (51 securities, 11 other assets); iShares 41 total assets (39 securities, 2 other assets), Global X 45 total assets (41 securities, 4 other assets), Roundhill Ball 52 total assets (51 securities, 1 other asset)