Deutsche Bank initiated coverage of Matterport, a company that creates 3D “digital twins” of interior spaces. While its target audience is the real estate digital walkthrough market, Matterport has been described as a “metaverse play” because its technology and gigantic library of spaces could be used as metaverse infrastructure.
While the concept dates back three decades to Neal Stephenson’s dystopian cyberpunk novel “Snow Crash” — a virtual reality world in which people can live a second life behind avatars — it’s only now beginning to take shape. Fortnite’s developers are turning the MMO game’s virtual world into a metaverse with a very large game in it, and blockchain-based metaverses like Decentraland and The Sandbox are the toast of the crypto world.
Indeed, a lot of money is chasing the metaverse, but there are also plenty of companies slapping the term onto a press release or largely vaporware product page for SEO glory.
Is the Hype Real?
As for Matterport, Deutsche Bank began coverage by calling it a “leader in digitization of the built world,” with a “buy” rating and a price target of $14 — nearly double its current price but far below other analysts’ coverage — and a market cap of $2.2 billion on Q3 revenues of $27.7 million.
An Investor Place article breathlessly call it “the gateway to the metaverse” and a new partnership with Facebook AI — part of the company Mark Zuckerberg recently rebranded “Meta” to make the social media giant’s direction clear — is being pitched as the first step in a larger, Metaverse-focused partnership in some articles.
On the other hand, more skeptical coverage in Seeking Alpha said “the Metaverse investment thesis” for Matterport “is somewhat irrational,” arguing that while it is strongly positioned in the real estate market, “the company’s value is now being driven by investor hype over the still unknown potential of the metaverse.” It added, “the inherent looming spectre of the metaverse and Matterport’s fit into this future has created a material level of speculative froth in its common shares.”
Read also: Matterport, Google Bring VR To Mobile Web
However, let’s not pick on Matterport. When Microsoft announced its $68.7 billion purchase of leading game developer Activision Blizzard last month, the company’s press release slapped a line about the purchase providing “building blocks for the metaverse.” In the second sentence. That was after quickly brushing over that the maker of top gaming platform Xbox was buying one of the largest game makers — a huge and even worrisome level of synergy.
Hype or Reality?
So is the metaverse truly “the next evolutionary stage of the internet,” as research firm Gartner announced in a Dec. 8 excerpt from its “Gartner Emerging Technologies and Trends Impact Radar for 2022” report?
Well, let’s look back a few months. Neither Gartner’s July Hype Cycle for Blockchain, 2021, nor its August Hype Cycle for Emerging Technologies, 2021, so much as mention the word “metaverse.”
So, is Matterport another Long Island Ice Tea, which saw its stock rocket by slapping the term “blockchain” into its name back in 2017, or a company whose product can transform it into a key developer of the infrastructure of the metaverse? Probably the latter, as there’s a lot of agreement that the technology is excellent.
Does that mean Matterport’s going to help change the world with its contribution to a nascent technology about which Gartner said, “we expect the transition toward the metaverse to be as significant as the one from analog to digital?”
Well, maybe. But think to the beginning of the year, when virtual reality — the core technology behind the metaverse — was still a technology that had failed to live up to a similar degree of hype for years.
Whether the metaverse is just irrational exuberance or the revenge of the VR boosters is as yet unknown. But slap it into your headline and watch the Google counter soar.
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