The document discusses three key aspects of the metaverse: the importance of presence, the role of virtual reality (VR), and the market potential. It emphasizes that presence is the core experience of the metaverse, which is being driven by affordable and high-performance VR technologies like the Quest 2. Additionally, it notes that while the hype around the metaverse suggests a vast market, the current addressable market is more modest, with VR expected to grow significantly in the next few years.

1. Three things you should
consider about the
Metaverse
1. It’s all about Presence
2. VR is leading the way
3. There’s a rational market

2. 1. The Metaverse is about Presence
The Metaverse is a connected, immersive, and interactive 3D environment.
Evolution of Technologies enabling Metaverse Use Cases
Mobile
Static
Ubiquitous Today Ubiquitous Soon Ubiquitous Future
Each technology enables a deeper sense of presence
Presence is the Essence of Metaverse
Core-Experience of the Metaverse either:
1) transfers the consciousness to a
simulated environment
2) transfers the simulated environment to
a consciousness
Metaverse experience can be cross-platform
(ie Mobile or Web) but the core-experience must
enable presence — Virtual or Augmented Reality
Augmented
Reality
Virtual
Reality Presence
5-10 years 10-20 years
Less
Presence
More
Presence

3. 2. VR is leading Presence-driven use cases
Launch of Quest 2 enabled presence for millions initiating the metaverse trend
Sold more than Xbox
(est. 20M by EOY)
• Standalone VR
What makes Quest 2 successful?
• A
ff
ordable
• Fast (120fps)
better presence
mass-market
not sick or tired
Games and Experiences
> $1B in S/W Revenue
> $50M Monthly S/W Sales
> 400 Games S/W Titles
(Feb ’22)
(Feb ’22)
(Indy, AAA, etc)
Popular Metaverse Use Cases in VR
Games Home Fitness
Visual Art
Training
Entertainment
Education
Productivity
Design Healthcare
Emerging Business Models
DLC IAP
UGC
OD
Serials
Subscription

4. 3. Addressable Market for VR is big enough without $1-2T pie-in-the-sky estimates
“Metaverse” hype promises the moon but addressable market today is smaller
• Published in 2016 the Goldman report is still consider the best forecast
• Quest 2 demonstrates the base case, software sales will drive new growth
• Annual sales should reach tablet-scale in 2-3 years and peak at 1.4B units*
*Seeking Alpha: https://bit.ly/3rVLdtI
Independent analysis
• VR is the fastest growing digital format
• Eventually connected VR/AR devices will capture
significant marketshare from mobile
Big Screens on-the-go, the feeling of being together
(presence), will move streaming video and gaming to
new types of devices
Assuming Meta sells 50M units per year by 2025 their annual
store revenue canconservatively hit $10-15B
Meta currently has >50% marketshare and store revenue is approx. $50-65M monthly
PWC (RoadtoVR): https://bit.ly/3DzKuFh