This metaverse ASX share is a buy: expert

It’s not just the company formerly known as Facebook. There’s a Melbourne mob who is lighting the fire of some professional investors.

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Metaverse has been the hot word in technology this year, culminating in Facebook’s corporate renaming to Meta Platforms Inc (NASDAQ: FB) in late October.

The term describes the next stage of internet computing where a combination of virtual reality, augmented reality and video technologies immerse users into a digital “universe”.

It may surprise you that there are already ASX shares that represent businesses that deal with the metaverse.

And one of those has been labelled a “buy” this week.

One of my “favourite” metaverse companies: expert

Shares for electronic games developer Playside Studios Ltd (ASX: PLY) have rocketed more than 50% in the past 2 months after listing a year ago.

So much so that the stock now trades at more than 4 times the initial public offer price of 20 cents per share.

For Red Leaf Securities chief executive John Athanasiou, as one of his fund’s “favourite” metaverse companies, Playside is a buy at the moment.

“The video game developer has a growing client base,” he told TheBull.

“The company is at the forefront of blockchain gaming, and recently completed a $28 million capital raising, which enables it to pursue metaverse opportunities.”

Cyan portfolio manager Dean Fergie has publicly mentioned multiple times over the past year that Playside is set to boom.

He said in August that its cash flow is good and its dual business of outsourcing services and original games development is “performing outstandingly”.

“The company has an exciting 12 months ahead with the upcoming release of several new games including titles based on blockbuster movies Legally Blonde and The Godfather, which should contribute to a material uplift in revenues in FY22.”

Last month the Melbourne company signed a work-for-hire agreement with global giant 2K Games to develop games on their behalf.

PlaySide chief Gerry Sakkas said at the time that it was the largest outsourcing deal for the company since its ASX listing.

“We are excited to be working with 2K Games, a label from one of the world’s largest publishers, Take-Two Interactive Software (NASDAQ: TTWO).

“Our ability to secure this agreement with 2K Games underlines our position as Australia’s largest publicly listed game developer.”

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Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns and has recommended Meta Platforms, Inc. The Motley Fool Australia has recommended Meta Platforms, Inc. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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