*** MSFT is buying ATVI
*** Why Stephen’s more bullish on the metaverse than ever
*** And a RiskHedge reader brings up a good point…
Did you hear about the huge merger?
Microsoft (MSFT) plans to buy Activision Blizzard (ATVI)—the video game maker behind Call of Duty, World of Warcraft, and other hit names—for nearly $70 billion.
The news sent Activision’s stock up 25%+ in a flash.
As for Microsoft, this is the company’s largest acquisition ever... by a lot. Its previous largest deal, LinkedIn, costed $26 billion.
Microsoft is already a gaming empire thanks to Xbox. This acquisition will make it the third-largest gaming company, just behind Tencent and Sony.
Simply put: This is huge news.
But it’s also far more than just a “gaming” play…
This is Microsoft’s first major step into the metaverse: the new, 3D, immersive internet Chief Analyst Stephen McBride first put on our radar nearly one year ago.
In a press release last week Microsoft said that buying Activision Blizzard “will provide building blocks for the metaverse.” And Microsoft CEO Satya Nadella said gaming “will play a key role in the development of metaverse platforms.”
If there’s one person to talk metaverse with, it’s Stephen. So, I’m bringing him in today to help us see the big picture…
***
Chris: Stephen, ever since you wrote about the metaverse a year ago, it’s become the hottest buzzword on the planet. People see the money at stake. They’ve watched Facebook become Meta… And now Microsoft acquire Activision Blizzard—all in preparation for this exciting “new internet,” as you call it.
Since the word is out, do you still see the metaverse as a big moneymaking opportunity—or is it too late?
Stephen: It’s still very early. Many of the world’s largest companies, including Nvidia and Apple, are actively hiring people to build out their metaverse divisions.
The term metaverse gets thrown around a lot. At its core, it’s really just the next version of the internet. A more immersive, always on, and persistent internet.
What I mean by that is it’s not solely video games, virtual reality, or Facebook and Microsoft’s own little digital worlds. The metaverse is really the infrastructure behind all those things that connects them.
It’s similar to how the internet isn’t just Google or just Amazon. It’s a whole ecosystem where you can have Zoom meetings and buy cryptocurrencies and watch YouTube videos.
Chris: Sounds like you’re still as bullish on the metaverse as ever…
Stephen: Absolutely. When I originally wrote about it, I said every company will have a presence in the metaverse—just like they have a webpage on the internet today. And that’s quickly coming true.
PriceWaterhouseCooper, one of the Big Four accounting firms, is building a digital presence in virtual worlds. It’ll be able to get new clients and conduct business from that.
But keep in mind, the metaverse will require a lot of physical infrastructure. That's new computer chips, processing power, and network equipment. When Facebook changed its name to Meta, it said it would spend $100 billion plus over the next couple years to help build the infrastructure to support this new world. So, chipmakers like Nvidia and others will likely be on the receiving end of that.
And here’s something I've never said publicly before…
It's become clear to me the metaverse will be built on top of blockchain technology, the technology underpinning cryptocurrencies.
Think about it. If we're going to live most of our lives in a virtual world… if it's going to be the place we hang out and do business and all these things… you’ll want property rights. You'll want the ability to own digital objects in this world.
Before the blockchain you could not truly own anything online, aside from a domain name. Blockchain technology, which lets us easily record ownership of digital assets, will play a critical role in this new immersive internet.
Chris: Do you see any negative ramifications of the metaverse? For example, a RiskHedge reader recently asked…
Why do people want to play in the metaverse? I understand there's a lot of hype, but that doesn't make it right for human civilization.
We already text, don't call, don't work well in groups thanks to COVID-19, and now we're playing in a fake world. What are your thoughts on that?
Stephen: It’s a great question. Many folks consider the metaverse dystopian, right? Many picture a sad world where we’re all sitting in our houses alone with our VR goggles on.
But as I said, when you boil it down, the metaverse is just the next version of the internet. It will allow us to do and experience more from the comfort of our own home. And that’s a great thing for me, you, and the rest of the world.
Our reader has a good point, though. There are downsides to manage. Some people will get addicted to alternate realities. Just like with smartphones, you’ll have to figure out where they help your life, where they hurt, and use the technology accordingly.
I talked to a guy in the gym who used to spend two to three hours of his day commuting. He used to travel roughly one week out of every month. That meant time away from his wife, his kids, and his home. He doesn't do that anymore. COVID has been a time machine for him. He said it gave him two or three hours of his day back to do whatever he wants; to go to the gym; to spend time with his kids. All of which is great.
The metaverse will give us more such opportunities—including many we haven’t even imagined yet.
Chris: One of those opportunities, which you just wrote about in RiskHedge Venture, is a “metaverse crypto”… It sounds promising…
Many folks don’t know this, but some of the biggest gains in crypto have been coming from the metaverse space. Like Decentraland, Sandbox, and Axie Infinity… which hit peak gains of 7,275%, 23,344%, and 31,102% in 2021 alone.
Stephen: Yeah, so I just recommended a tiny crypto that’s essentially a “bedrock” for the metaverse. As I mentioned, we need BILLIONS of new specialized chips for the metaverse to really take off. Thousands of times more than what’s available right now.
Simply put: Today’s internet isn’t built to handle a world that works more like a high-end video game than a static Amazon webpage…
That’s where my most recent crypto pick comes in.
Chris: Thanks, Stephen. And for readers who are interested, you can learn how to access Stephen’s metaverse crypto—and his strategy for picking small, “Phase 2” cryptos—at this link.
Stephen’s research suggests this particular metaverse crypto could easily 10X in 2022—so if you’re interested, don’t delay.
Chris Reilly
Executive Editor, RiskHedge
