Virtual reality (VR) has shown huge potential and is expected to grow rapidly in the coming years. Investing in VR can be highly rewarding but also comes with risks. This article will explore useful ways for individuals to invest in virtual reality and benefit from its growth.
VR creates immersive digital environments using headsets and allows users to experience simulations of real world or imagined scenarios. Global VR market size is projected to grow from USD 6.1 billion in 2020 to USD 20.9 billion by 2025 at a CAGR of 27.9%. The key drivers are growth of VR in sectors like gaming, entertainment, healthcare, education etc.
Individual investors can look to invest in VR via stocks of related companies, VR focused ETFs, directly in startups and by purchasing emerging VR assets like virtual real estate. However, volatility, technology risk and lack of track record are key challenges investors face.
Invest in public stocks and ETFs related to virtual reality
Investing in stocks of established technology companies involved in VR like Facebook, Nvidia, Microsoft, Sony etc can provide exposure to growth of virtual reality. These companies invest significantly in R&D and acquisitions in the VR space. Investors need to research individual stock prospects carefully.
There are also ETFs focused specifically on virtual reality, augmented reality and related technologies. Examples include ETFs like Global X Virtual Reality & Augmented Reality ETF, Defiance Next Gen Halo ETF, Procure ETF Trust etc. These provide diversified exposure by holding a basket of VR related stocks.
Invest in emerging private virtual reality companies
Investing in promising private VR startups allows tapping into emerging high growth opportunities. However, it comes with significant risks like failure, dilution, lack of liquidity etc. Individual investors can invest in early stage VR startups via equity crowdfunding platforms and VC firms focused on VR.
Purchase virtual real estate and assets
Several VR worlds allow users to purchase virtual land and assets as NFTs using cryptocurrencies. For instance, platforms like Decentraland, Cryptovoxels, Sandbox VR etc. allow users to buy virtual real estate. If these VR worlds see significant activity and transactions, the NFT land value may appreciate providing gains to investors. However, virtual real estate remains an emerging speculative asset class currently.
While investing in the high potential virtual reality sector can be lucrative, it comes with significant risks and uncertainties as well. Thorough research and portfolio diversification is essential for investors looking to benefit from the VR growth wave.