The Metaverse is coming. What is the Metaverse you may ask? My initial stumbling thoughts in the dark on this, as is it is for everyone, are that for the providers it is a wonderfully higher level of addictive power.
Absolutely, no one else is saying this, that it is super-charged addiction.
The Metaverse, simply put, is gaming where you can trade characters and earn money simply by playing the game. There is a whole lot more to be conjured in the virtual reality realm of possibilities. The initial power of the Metaverse however, is in this monetarised gaming. The money, well it starts as a "love potion" score or similar, and is supposedly convertible to a crypto currency, which can then be converted to real money. Perhaps, you just choose to exist in crypto payment world?
The real power in this though, is the level of addiction of the gaming. Remember, all the gaming companies have acres of psychology PhDs working out constantly how to make their games more addictive. I hope you did not think the addictive nature of games were a side effect?
In the Metaverse, if you play the game well, you can make money and even earn a living. People are actually dropping out of medical school to take up Metaverse games as their sole application.
There are only a few problems with this. Apart from the high risk of scammers, hackers, and fraud, let alone money laundering, what happens to the real world we all live in, when people in the most productive stages of their lives are playing games full time. And continue to do so life long, and then get their children involved. Why even go to school?
A greater and greater proportion of our workforce has been steadily becoming un-productive for decades now. Compliance, regulation, tax all absorb an inordinate amount of people's time and resources just to be able to do the core activity they are interested in. It is one of the reasons the 'old first world' (a term I coined in 2008, pardon the pun) of Europe and the USA struggles to compete with the 'new first world' of Asia, and increasingly Latin America.
Crypto already absorbs an inappropriate level of the world's energy supply. The Metaverse will take that to the level of massive human resource dislocation.
Everyone wants the fruits of their labour, increasingly even if that labour provides no real benefit to the society? As always, the risk of greed creeps in to completely undermine the functionality of society. slowly, but steadily over time.
All that said, these Metaverse games are likely to make the frenzy over crypto of the past decade, look like a walk in the park. Money making in some virtual world by playing games, becoming ever more efficient and enjoyable, means less time spent going out into the real world. This new way will appeal. It will be an inescapable financial success with trillions to be made.
Personally. it's not for me, but as investors it might be worth knowing what is only just beginning to take form in that space.
The whole point of the above musings, however, is to bring us back to the current stock market levels of the world. If the world is really going that crazy, wanting to just play games for a career, then how crazy could the value of real companies delivering real products and services become?
I have met five billionaires so far, and they all made their money in real world traditional businesses. And it took them a lifetime to achieve that status. Meanwhile, in the US and elsewhere now, we have people becoming billionaires, even though their companies have only ever lost many billions of dollars. With no prospect of that changing.
When we wonder how far stocks can go, I guess, I should not be as surprised as I have been. Perhaps this goes on for several more years.
All I know for sure, is that it would be better for values to come back to more sustainable levels sooner, rather than later. For the longer the madness of 'buying everything at any price' (a term I coined this year) continues, the bigger the eventual crash and real-world economic impact will be.
As for Metaverse gaming. Self-indulgent greed without due regard to community contribution, has, throughout history, enjoyed tremendous success for a time, only to end in total destruction.