Jul 20 2022
The Truth About the Metaverse Land Rush
Make no mistake! There’s definitely a metaverse land rush afoot. And with
big sales in the multiple nine figures, everyone from financial giants to rappers is getting in on the action. A lot of the metaverse land rush is fuelled by FOMO. Everyone wants to be the genius that snapped up the virtual equivalent of Williamsburg when it was cheap.
If you’re unclear on what digital real estate or the Metaverse is, then
this blogshould help. Otherwise read on as we address the issue of the metaverse land rush below, as giving it a thumbs up/thumbs down is less clear cut than you might think.
Some notable metaverse land grabs
Before we cover the why, let’s first cover the what. Here are some significant metaverse land grabs that have been fueling the hype machine lately.
The bank has bought a digital plot of land in The Sandbox with plans to use it to connect with the gaming and esports community. HSBC is planning to create a virtual stadium that facilitates shared screen experiences. They want this to take full advantage of AR, VR, and XR technology as the technology matures.
As the first bank to officially enter the Metaverse, JP Morgan has created its very own virtual lounge. And in a recent report, they stated “the opportunities presented by interactive, digital worlds seem limitless.” In the same report, JP Morgan also said that “The astronomical risk of being left behind is worth the incremental investment needed to get started.”
Everyrealm (formally Republic Realm)
This metaverse investment company paid $913,000 for a section of Decentraland and paid 4.28 million for 800 plots in The Sandbox.
Partnering with The Sandbox, Gucci is using its virtual land holding to house the metaverse version of its concept store ‘Vault.’
Investors are treating the Metaverse like it’s any other real estate investment. Speaking with Business Insider, Everyrealm’s co-founder Janine Yorio said that “We want to buy land and build things on it” and that “the only way the metaverse becomes interesting is if there are things to do and people to see and places to go when you get there.”
Investors are essentially treating it like they’re developing a hot new shopping district or a multiplex cinema; if you build it they will (probably) come.
One other thing to note is that banks getting involved is no small feat. Traditionally they’ve been tragically slow to adopt cutting edge technology, often due to security and compliance issues. So the fact that the Metaverse is causing some of them to buck this trend is big news.
Why people are so interested in the Metaverse
This metaverse land rush isn’t happening because businesses have nothing better to do. Yes, the Metaverse land rush is ultimately an investment and people are throwing money at it now with the hope of their investment appreciating. There are, however, various other reasons why they want to own a chunk of the Metaverse.
It doesn’t have the same limitations that real world commercial environments do
The laws of physics and the world geography we’re governed by don’t apply to the Metaverse. Gucci can open a store, for a worldwide audience to visit 24/7. Millions of customers could, in theory, be served at once. If footfall increases and more virtual store space needs to be created to meet demand, you don’t need to spend buckets of time and money opening up a new branch. This is essentially the missing link between online retail and in person shopping; an engaging brand experience combined with online convenience.
Customer experience is maximized
Building on the above point, consumers could get so much more when they interact with brands in the Metaverse. What if a brand designs a shopping mall that only stocks the items you’re interested in? What if your favorite music could be played in the aisles whilst you shop? And what if you could use metaverse networking spaces to help you seek out the people you want to meet more efficiently?
Businesses don’t want to make the same mistake twice
And that mistake was ignoring the internet in the 90s. The Metaverse is in a similar position right now. The technology is just beginning to bubble up. Nobody quite knows what it will be, but we all know it’ll become at least something. Pretty much every business that ignored the internet initially regretted doing so. By getting stuck into the metaverse land rush, businesses can ensure that they’re not turning their back on the next big thing.
It’s also just another cool thing to bet on
Probably not the main driver of the metaverse land rush, but still relevant. Sometimes (successful) people and corporations will make a wildcard bet because they think it’s cool. They’re not betting the house on it, and even if it fails then at least they’ll have had some fun. Snoop Dogg’s Snoopverse in The Sandbox is a great example of this. And whoever bought the land next to Snoop Dogg for $450,000 is clearly chasing the cool factor as much as anything else.
Confidence in the Metaverse could even be a self-fulfilling prophecy. As the metaverse hype train moves along, it boosts interest in NFTs and crypto. This has created more demand for crypto wallets and has grown the Metaverse’s potential audience. In May 2022, half the wallets on The Sandbox belonged to users that had created them specifically for signing up to The Sandbox.
Before we get too excited, remember, it’s not traditional real estate
The Metaverse’s land certainly has parallels with real land, but ultimately it’s just code. (For now) you’re not buying a plot that you can live and breathe in. You’re buying a very versatile and immersive media space.
In the words of Chen Dongyao, assistant professor at Shanghai Jiao Tong University: “We are still a bit far away from the ultimate metaverse.” I.e. far away from a world in which calling this “virtual real estate” makes sense. The immersive user experience promised by VR is still missing. VR needs to become less strange and inconvenient for it to be household technology. Basically, VR needs to stop making
some people feel nauseousand stop making everyone look like an idiot when they’re wearing it.
So is it just a bubble?
During the 90s the band Nirvana spawned grunge music and with that, dozens of 2-bit, copycat grunge acts followed. Those acts certainly got their 15 minutes of fame. But none of them lasted.
Nirvana wasn’t the only good grunge act though. The Pixies and The Smashing Pumpkins endured the test of time. The Metaverse is doing something similar. There are some
seriously decent playersthat will last and there will be plenty of copycat projects that you should avoid. So in places, there’s definitely a bubble forming. Here are a few reasons why.
There’s FOMO everywhere
FOMO can be the investing equivalent of going shopping when you’re very hungry: you might not be thinking straight and might end up buying a large tasteless pie. This FOMO is probably, at least in places, prime fuel for the metaverse land rush and causing people to get too hungry for their own good. Not only does this lead to purchasing giant tasteless virtual real estate pies, but it also unnaturally inflates the prices of metaverse projects too.
The land is only ‘sort of’ limited
This will vary depending on which platform you’re on but if we’re talking about the big players — Decentraland and The Sandbox — then technically the land available could be unlimited. Yes, there are a set number of parcels up for grabs right now. But, in Decentraland for example, more land can, in theory, be created if the decentralized autonomous organization (DAO) that governs it decides to do so. How such a move would influence the price of real estate could be hard to predict but it’s definitely something to consider.
Buying virtual real estate is hard
If virtual real estate is going to take off, then there needs to be a bit less of a barrier to entry. Right now, users either have to shop around the different metaverses and carefully compare and select which land they want. Or they can browse what’s available on platforms like OpenSea that have a medley of NFT collections and might not have the digital land they’re after.
This is where VerseProp comes in
When our platform launches, you’ll be able to purchase land in the major worlds. But that’s just the start. VerseProp wants to help you become the wise player that wins the long term investing game. That’s why our platform also serves as an investment guidance hub so you can easily decide what’s an opportunity, and what needs to be avoided.
Whether you want to join the next stage of the attention economy by owning sought after ad space, or you’ve got big ideas for a virtual experience you can monetize, VerseProp is here to make that happen. If you haven't already, click below to sign up to our newsletter and get ready to learn everything you need to take advantage of the virtual land boom.