Hailed as one of 2020’s most exciting tech IPOs, Unity Software (NYSE: U) has gone from strength to strength since — albeit whilst navigating a choppy stock market.
It’s no surprise to hear that this nifty little video game development platform has a foot very solidly in the metaverse then. Here are a number of reasons why Unity is my metaverse play for 2022.
1. 3D imaging leadership
The metaverse is a 3D virtual world with the potential to contain billions of avatars — all of which have their own potential to live virtual lives.
When it comes to developing the software which drives the creation of such tech, Unity is unrivaled. Not only does Unity’s products already power upwards of 70% of all mobile games, but most of these games are also among the top-performing. Unity CEO John Riccitiello believes that Unity provides the “underlying toolset for creating the metaverse”. It also provides a set of services around monetization, analytics, and hosting for those operating businesses.
So, as you can see, with the metaverse still in its infancy, Unity has the potential to nab itself a hell of a lot of business.
2. Few direct competitors in the gaming industry
Leading on from that, Unity doesn’t actually compete with the other big names like Roblox, ‘Minecraft’, or Activision Blizzard. Instead of making consumer applications, like a traditional gaming company, it instead builds the platform for these companies to use in order to build their creations.
Going back to CEO Riccitiello, he described the metaverse like a theme park, where Roblox, Facebook, ‘Minecraft’, and all the rest are each their own individual rides. Those rides, however, were all built by Unity, and there’s nobody else that’s quite as reliable. This allows Unity to reach a wider audience with its products, and thus, generate more diversified revenue streams.
Speaking of which…
3. Growing revenue
Unity is growing at a rapid pace. In 2020, it recorded all-time highs for monthly active users thanks to increased interest in the company during the pandemic. Of the top 1,000 mobile games in Q4 2020, 71% were made using Unity.
In Q3, revenue rose 48% in Q1 to $273.6 million. It is also gathering massive amounts of data from its growing army of 2.8 billion monthly active users, who create 50 billion data events per day.
The company is a leader in AR/VR, which also bodes well for its ambitions of giving the creators the tools to build the metaverse. Its most recent acquisition of visual effects company Weta Digital will enable it to provide tools and assets for creators to build the metaverse and expand its total addressable market by $10 billion.
Of course, there are plenty of risks including the company’s high valuation, the emergence of Facebook as a player in the tools space, and overall unknowns surrounding the metaverse. But for me, this is a good 2022 play.
Editor at MyWallSt
Jamie is the Content Editor here at MyWallSt. His favorite stock is Apple, which is also the first stock he ever bought. Jamie is not only a big fan of its products, but he believes that the tech giant has a whole lot more to give the world, and hasn't even scraped the surface of its potential.