Friday, 19 July 2024 Reading time : 4 minutes

Whether it's computer games, movies, or TV shows, today's entertainment products show that we like to immerse ourselves in other worlds. In computer games, we can often become part of the story as avatars, saving a princess or even the whole world. However, such games usually have a defined goal and are therefore fundamentally different from our real lives. Second Life was created in 1999 to address this aspect of real life. It has its origins in the science fiction novel Snow Crash, in which the protagonists flee a dystopia into the metaverse, a virtual world in which they become avatars. Second Life provides users with a parallel world in which avatars can interact. Today, this virtual world has fallen out of favor, but the concept is still very much alive.

With the Metaverse, companies provide users with a virtual world that they can share and interact with in real time. The goal is to merge physical and virtual reality. The combination of virtual and augmented reality (AR) ensures that this goal is achieved. Virtual reality refers to a complete simulation of the environment, while augmented reality allows virtual and real environments to coexist. With VR, you typically wear glasses that cover your eyes and headphones, which means the real world is completely replaced by the virtual world. With AR, the simulated world is more integrated with the real world, such as when we see a lion in the middle of our living room with our phone instead of the normal camera image. Pokémon Go was one of the pioneers of AR, but the technology is becoming increasingly relevant to businesses in general. Examples include real estate, fashion, and design.

A GPU is a processor optimized for computing graphics. The technology company Nvidia specializes in GPUs. While Nvidia develops the graphics processors, the Taiwanese semiconductor company TSMC is responsible for manufacturing the GPUs. NVIDIA has expanded its portfolio to include solutions for digital design and development. Its Omniverse platform integrates artificial intelligence (AI) to create realistic 3D environments such as warehouses or avatars with facial expressions. BMW and Mercedes use the platform to optimize their production and factory designs. A free version of Omniverse is still available. It will also make it easier for designers and developers to integrate other tools into Omniverse and collaborate through the platform. This means that they are not limited by the Omniverse offering, which has allowed NVIDIA to be agile in the metaverse business.

Virtual reality glasses, also known as VR headsets, are a type of display that is worn on the head and allows the wearer to see into the VR world. The display or lenses simulate the perception of a real environment. In addition, sensors that detect head movements provide a sense of being part of the VR environment. The first version of VR glasses consisted of a holder with special lenses into which the smartphone was inserted. Since then, development has continued. Currently, there are two types of VR goggles: standalone VR goggles with a built-in display and standalone computer, and tethered VR goggles. In the latter case, the glasses are connected to an external computer, such as a console, via a cable. While the limited freedom of movement is a drawback, it can be compensated for by the computing power of the connected device, resulting in a more immersive experience. Apple Vision is a standalone pair of mixed reality glasses. Apple believes that in the future there will be a need to connect the two worlds. Meta, on the other hand, believes that the real world will be replaced by the virtual world in many ways.

Reality Labs, formerly Oculus VR, is a unit of Meta that develops VR and AR software and hardware. Reality Labs is the unit responsible for the Metaverse project. The company continues to lose money in this area and continues to invest in product development. Meta is convinced that Metaverse is the future of social interaction and sees enormous potential in this platform. According to Mata, everything from work to shopping could be done behind VR glasses in the future. Although they have often been criticized for their high investments and losses on Metaverse, they have seen success in recent quarters. They have also bought back some shares, invested in data centers and AI to strengthen their main source of revenue, advertising.

 

The Basket in Detail

The ZKB Metaverse Basket combines 35 stocks that benefit from these developments. The selection created by ZKB Asset Management is geographically well diversified; the companies positioned in different end markets and across the entire metaverse value chain enable broad participation.

Dynamic tracker certificate on the ZKB Metaverse Basket (CHF / USD)

• Open end
• Termsheet CHF / USD

Further information: Factsheet

 

Disclaimer

This communication is for marketing purposes. It is neither an offer nor an invitation to submit an offer, to purchase or to subscribe to securities and does not constitute investment advice. You should consult your advisors before making an investment decision. Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, financial condition, development or performance of the issuer to be materially different from any future results, financial condition, development or performance expressed or implied by such statements. The present document has not been drawn up by the research department as defined in the rules of the “Directives on the Independence of Financial Research” published by the Swiss Bankers Association, hence these rules do not apply to this document. If securities are mentioned in the communication, the base prospectus, the final terms and any key information document may be obtained free of charge from Zürcher Kantonalbank, Bahnhofstrasse 9, 8001 Zurich, VRIS, and from www.zkb.ch/finanzinformationen.