Briefly describe the three major investment directions of Meta Universe: before the fight, the pattern has become a reality

2021 is the year when the concept of meta universe swept the world. This vocabulary from Neil Stephenson’s science fiction novel “Avalanche” has begun to enter the capital market after being endowed with new connotations from all walks of life.

At present, the general view on the meta universe is: it is a virtual space that is interoperable with the real world, and people can live in it as a virtual identity, carry out production, business, and social activities similar to the real world, and even construct new social forms.

There is no doubt that this is a grand vision, involving a wide range of technologies and industries, and if its ultimate form can be realized, it would be tantamount to reshaping human society.

For this reason, in the current economic environment, Meta Universe has attracted the attention of a large amount of capital, and a large number of concept companies have emerged, and related concept stocks have risen astonishingly during the year. According to data released by Tonglian Datayes, from November 1st to December 3rd, the meta-universe concept sector rose by an average of nearly 20%.

In order to allow investors to clarify the industrial structure of Metaverse and better choose their own investment direction, our content in this issue will briefly review the current investment direction of Metaverse related industries and analyze the investment prospects of key industries.

Overview:

Metaverse is essentially a technology and industrial aggregate, and its realization is mainly supported by six technologies: VR/AR, artificial intelligence, big data, cloud computing, blockchain, and 5G. This is similar to the breakthrough of touch screen technology, operating system, optics, batteries and other technologies during the transition from the PC Internet era to the mobile Internet era.

By categorizing these technologies, Metaverse can be summarized into three major industrial sectors according to different focuses: one is the hardware equipment side such as VR/AR; the other is the software side such as operating system and development tools; and the third is cloud computing and large-scale industry. Data, blockchain, 5G and other infrastructure end.

At present, domestic meta-universe concept companies are basically included in these major industry sectors. These companies have achieved certain leading advantages in technology and market, such as Goertek and BOE on the hardware side, Tencent and ByteDance on the software side. , China Unicom, China Mobile, Huawei, etc. on the infrastructure side.

Hardware side: VR/AR

The hardware side has always been one of the investment sectors with the smoothest realization path. Returning to the past, we will find that when the PC Internet cannot meet the needs of the society, the mobile Internet came into being; when the mobile Internet dividends disappeared, the story about the meta universe turned out.

In this evolutionary process, the hardware terminal that plays the role of the entire industry ecosystem, from computers to mobile phones, has come to VR/AR devices that are rapidly popularizing today. To a large extent, whether the meta-universe story can be told satisfactorily depends first on whether the VR/AR device can complete the tasks of simulation and immersion, and then, as an interface between reality and the virtual world, it becomes a link in the meta-universe industry chain.

From the perspective of industry development, on a global scale, Meta’s Oculus brand of VR all-in-one has an absolute advantage. Only quest2 has shipped close to 10 million units, with a market share of over 30%. Its entire Oculus series products account for only 60% of Steam VR.

Apple and Sony are gaining momentum and are expected to launch related products next year. In China, manufacturers such as Pico, HTC, Dapeng VR, and iQiyi are in the leading position, and they all have their own VR all-in-one products. At the same time, AR companies represented by Liangfengtai are applying AR technology to intelligent manufacturing, and the future is expected to usher in a period of rapid development.

On the whole, the entire hardware-end industrial chain, involving sensors, displays, processors, and optical equipment, is a big plus for a large number of domestic upstream and downstream companies.

Domestic representative companies: Goertek, Rockchip, BOE A, Weir, Siripu, Sunny Optical Technology, Crystal Optoelectronics

Software side: games, social

On the software side, platform-based authoring engines such as Unity, Roblox, and Epic are the leaders in the world. Among them, Unity is not only a top 3D content creation platform, but also provides development tools for games, automobiles, movies, construction engineering and other fields. Its 3D development engine provides services for more than 50% of the world’s Electronic games.

It is worth noting that Unity, Roblox, and Epic are all Tencent investment companies, superimposing their own social entertainment products and a complex investment landscape. Therefore, Tencent is considered to be the most likely to become the leader of Metaverse software in China, and gradually build the basic ecology of Metaverse. .

Like Tencent, ByteDance and NetEase are also favored because of their superior status in games and social interactions. Especially for games, if you want to choose a field that first realizes the prototype of the meta-universe, games are undoubtedly the closest industry. A good game allows players to engage in social entertainment in the game under the premise of immersion and low latency. This is the first meta-universe industry that can be foreseen.

Domestic representative companies: Tencent, ByteDance, NetEase, Mango Super Media, Sanqi Mutual Entertainment, Perfect World, Tianxia Show

Infrastructure end: 5G, AI, cloud computing, blockchain

In the meta-universe, a large amount of data needs to be transmitted quickly, and a large amount of communication infrastructure needs to be relied on. The underlying technologies of Metaverse’s infrastructure, including 5G, AI, cloud computing, and blockchain, can provide support in terms of data transmission quality, computing power, mass production of content, and construction of an economic system. This is what Metaverse has obtained. The basis for rapid development.

For example, edge computing can help end users make up for the local area, improve processing efficiency, overall computing power network delay and delay network congestion risk. IoT sensors can greatly expand the perception of human five sense organs, ensure that they receive more information from the meta-universe world, and so on.

These companies with core advantages in technology are mostly blue-chip stocks, with stable corporate fundamentals, and long-term industry development. Even if the concept of Metaverse is aside, they are all investment targets worthy of reference.

Domestic representative companies: iFLYTEK, Hikvision, Jingjiawei, Inspur Information, ZTE Corporation

Conclusion:

From an investment perspective, the main battlefield of the current meta-universe concept is naturally the hardware side and the software side. The hardware end pays attention to cost-output ratio, the industrial chain is long, suitable for domestic enterprises, so there are many investment opportunities; the software end mainly focuses on the development layout of games and social entertainment software. The advantage is that it can continue the demographic dividend of the mobile Internet era, and the return on investment is fast and rich.

As for the infrastructure side of Metaverse, companies with high technical barriers and relatively mature industrial development do not rely on the concept of Metaverse, and the conceptual relevance of investment is not high.

Of course, the current metauniverse as a whole is still in the initial stage of development. Whether the expected results can be achieved in the future depends on various technological iterations and the improvement of related industries. The final result must be a combination of various chains, which is unpredictable and risky.

No matter whether it is a domestic virtual idol anchor or NFT digital collection, as long as it is an investment, it must be supported by fundamentals. However, in the current concept of hype and ride-hailing companies are not a few cases, how to identify and avoid pitfalls is still the first issue that investors need to consider and face.