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Metaverse real estate is a key topic in the world of virtual reality right now. We have already covered some aspects of buying virtual land in a previous Mazer blog post, but things are moving so quickly with this new technology that its time to look again at this developing area, this time focusing on the benefits of owning real estate in the metaverse. Read on to find out why now might be a good time to invest.
Companies already invested in real estates in the Metaverse
The sheer number of companies putting their money into the metaverse suggests that it will provide future profit. Thus far, there have been several sizeable investments, with global brands and small tech start-ups both getting involved. Football clubs, fashion brands, cosmetics companies, car retailers, and even celebrity individuals have all put significant sums into the metaverse. These firms wouldn’t be investing if they didn’t expect returns, which can give smaller companies and maybe even individuals the confidence to put their own money into it. As with any investment, caution is urged, with the possibility of losses, but it could also be the case that if you wait too long, you will miss a big opportunity.
2021 saw a boom in the sales of metaverse real estate, eventually hitting $500 million dollars’ worth by the end of the year. Some are predicting that to double in 2022, while market research group BrandEssense has forecast it to increase at a compound annual rate of 31%, suggesting that the boom is only just getting started. Off the back of these impressive sales, virtual real estate shot up in value on many of the main platforms. Back in June 2021, Republic Realm, investors in digital property, bought 259 parcels of land in Decentraland for $900,000. Just a few months later, in November of the same year, the Metaverse Group bought just 116 plots for $2.4 million. Republic Realm also bought space in The Sandbox, where they developed 100 so-called Fantasy Islands. These initially sold for $15,000 apiece, but by February 2022, they were being resold for over $100,000 each. Virtual gaming world Axie Infinity also saw increases in value, with 9 parcels going for $1.5 million in February 2021 and just 1 parcel later being sold for $2.3 million, again in November that year. The Decentraland crypto token, Mana, which is used to buy plots of land, as well as other things like products or services offered on the platform, also increased in value at the end of 2021, going up by 27% in one day alone. Of course, it’s hard to predict what will happen in the future. Prices have already come down a bit from the peak of 2021, but they are still much higher than the same time last year. Fluctuations like this are normal, so it’s hard to know if values will begin to plummet or if they will skyrocket again. Either way, the potential is clearly there, and the boom of 2021 could be the start of bigger things to come.
Future potential buying Metaverse real sstates
Though much of this is speculative, the metaverse is so far showing good potential for future growth, with many possible ways for companies to exploit their property. Some businesses are buying to rent, giving them the potential to make extra passive income. For example, Tokens.com, a company which invests in Web3 assets, recently managed to secure $16 million dollars of investment in metaverse real estate. They used it to buy huge parcels of land in the fashion district of Decentraland as well as waterfront locations in Somnium, which they now aim to rent out to retail brands and other companies, with two clothing brands already interested and talks underway with several other firms. If they can rent out this space, the earning potential will only grow along with the metaverse.
Some have argued that, due to the unlimited nature of the metaverse, the ultimate value of virtual real estate will be limited. After all, we can keep creating new virtual worlds, which could eventually dilute the space and bring down the value. Although there is potentially no limit to the amount of virtual land that can be produced, platforms are currently choosing to limit supply, which might maintain good prices (Decentraland has 90,000 50ft x 50ft plots, while The Sandbox has 166,464 96 x 96m plots). However, this doesn’t overcome the problem of new worlds being created. So, is the metaverse doomed to become oversaturated and eventually worthless?
While the proliferation of metaverse spaces may cause increased competition, there will still be plenty of value to be gained from metaverse real estate, but companies will have to be far more discerning about where they buy land and what they do with it. For example, if you’re buying virtual land to advertise, there will be no point in having an advertising space situated on a path between two popular areas because users will mostly move around by teleportation. The best property for this will be situated right beside popular areas, where the highest levels of footfall are going to occur.
So, value will come from location but also from utility. If you wander around Decentraland, you might wonder what the value is – at the moment it’s a large, open world full of all sorts of buildings and lands seemingly haphazardly joined together, many of which are unused, so it’s hard to see the benefit of it beyond a novel and fun experience. However, there are companies aiming to produce virtual spaces that offer much more practical metaverse solutions for business. XR Wizards is one such company. They have already constructed a collection of metaverse spaces, called Mazerspaces, including a healthcare centre where people can be trained in the use of a defibrillator, a collaborative meeting room which looks far more professional than many others currently on the market, and a staff break room, complete with its own bowling alley. They will also be providing apartment spaces in the metaverse that will be fully customizable with furniture and your own NFT art or other items.
So, if you have space within the metaverse, you can essentially customize it to your customers’ needs. The metaverse solutions for business that have been implemented by XR Wizards are just the beginning. Other companies are developing metaverse spaces with different purposes in mind. The Metaverse Group aim to use their virtual real estate to hold fashion events and sell virtual apparel. Adidas has used their land in The Sandbox to put on events like the GamesBeat Summit, which was held in April 2022. Atari have bought large swathes of metaverse land where they plan to build a virtual theme park and set up play to earn games. PWC Hong Kong also holds a metaverse estate from where they can advise clients interested in setting up their own metaverse solutions for business. Other companies are planning to construct metaverse shopping centres, universities, and even hospitals, proving that there really will be all sorts of ways to utilize virtual property. At the moment, much of this is speculative, with many companies buying property for promotional and branding purposes rather than with actual practical metaverse business applications, but with so many different plans in the making, it surely won’t be long before we see the metaverse landscape start to fill up with truly usable spaces.
While it might be hard for older generations to understand, younger people often ascribe lots of value to virtual assets. Games like Call of Duty have made huge profits selling personalized skins for player avatars, and players of Rust take great pride in building elaborate virtual buildings within that world, albeit for a specific gaming purpose. Nevertheless, it seems that the hunger is there for those who like to play around with digital technologies, personalize virtual assets, or simply try something new. For some, it allows them to express their identity in a way that they cannot or would not in the real world, and many could put great effort into creating something like this. It might offer individuals the chance to own a luxury apartment which they can decorate with their own collection of digital art, while companies may be able to buy a retail space which they couldn’t afford in the real world for their staff to come together for meetings or other events.
Some may also choose to buy metaverse real estate to be closer to their favourite celebrities. Rapper Snoop Dogg is building a replica of his real-life mansion in The Sandbox metaverse world, where he has bought a large section of real estate, now called the Snoopverse. He plans to hold virtual concerts and parties there, offering truly exclusive events to his fans. He even has an NFT collection with 10,000 playable avatars known as Doggies for his fans to use. People have already bought parcels of land within this space for as much as $450,000, proving that the market is there. This use of the metaverse has the potential to offer fans unprecedented access to their favourite celebrities, who will, in turn, be able to connect with their followers in new and exciting ways.
The potential for metaverse real estate to have practical applications might encourage companies to invest in their own piece of virtual land. With so much money being poured into it, now could be a great time to take the leap and invest while prices are still much lower than real-world ones. Of course, this involves risk. After all, if the metaverse fails, you may lose your investment. But if the predictions are correct, there is good potential to turn your virtual real estate into a useful and profitable metaverse business solution in the coming years. So, do some research, take a wander around the metaverse yourself, and find out if metaverse real estate is something that your company could benefit from.
Read also: How Virtual Reality Is Transforming The Travel Industry