Who’s Buying Real Estate in The Metaverse?
First movers have a strategic advantage to set the rules and test the waters for the way businesses will operate and monetise the metaverse In November, a patch of virtual real estate in Decentraland sold for a record $2.4 million worth of cryptocurrency. The buyer was crypto investor Tokens.com. It was the most expensive plot […]
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First movers have a strategic advantage to set the rules and test the waters for the way businesses will operate and monetise the metaverse
In November, a patch of virtual real estate in Decentraland sold for a record $2.4 million worth of cryptocurrency. The buyer was crypto investor Tokens.com. It was the most expensive plot of virtual real estate bought on the platform yet, though the history of the metaverse itself doesn’t go back very far.
Until then, the most expensive sale took place in June when Republic Realm bought a patch of land for almost $1 million. The proud owners belong to a US-based investment platform backed by Binance and Prosus. Decentraland is built using blockchain. In it, land, art and other assets are sold in the form of non-fungible tokens (NFTs). To buy real estate, users must secure Decentraland’s cryptocurrency, MANA, using their crypto wallets.
There are only a limited number of plots of “land” in the two biggest metaverse platforms, the Sandbox and Decentraland. Just because it’s digital land doesn’t mean it’s infinite. Both companies have said that they will never create more. And so, this digital real estate is bound to be an investment much like land in the real world.
Although the metaverse is still in its infancy, platforms like The Sandbox and Decentraland have already begun selling digital real estate and there are plenty of buyers. Rapper Snoop Dogg is developing Snoopverse, an interactive world for the rapper in The Sandbox. In fact, a fan known only as P-Ape spent $450,000 on a digital plot that would make them Snoop’s neighbour. What’s in it for P-Ape? Once the virtual real estate is purchased, the owner of the metaverse real estate NFT can rent, sell or build on their digital property. For now, it’s an investment in prime real estate that may soon be monetised via ads; think of it as selling billboard space on your land.
In November 2021, popstar Justin Beiber, or rather his digital avatar, performed in an interactive concert in Bieber’s virtual world. The popstar collaborated with virtual entertainment company Wave for the concert.
https://www.youtube.com/watch?v=gXQEwmVYCsI
In December, Paris Hilton’s new media company 11:11 Media launched the island, Paris World, inside of Roblox. Paris World will include microtransactions, where fans can pay in exchange for virtual outfits or a ride on a jet-ski around the island.
For brands that tested the waters by introducing NFTs, buying land in the metaverse seems like the natural progression. In the case of Adidas, they launched the Adidas Originals collection in partnership with NFT leaders such as Bored Ape Yacht Club, Gmoney and the team behind the Punks Comic. Recently, the brand also invested in a plot of land in the Sandbox. This will be the venue for all future interactive experiences, and the brand’s digital assets are secured in partnership with Coinbase.
Brands are still experimenting with experiences to fit their audiences. While Adidas seemed to offer a good fit for a young, adventurous audience, game companies are predominantly running the show since their users are more than comfortable with spending time and money in digital realms. For example, Atari purchased 20 parcels of digital land in Decentraland to set up their crypto casino. They have also announced plans to open an Atari Hotel in 2022.
Hyundai Motors tried their hand at introducing the Mobility Adventure within Robolox. Users can not only test drive Hyundai’s latest offering, they can also work as a engineer to design their own car. Besides retail, which is the obvious conclusion companies are exploring within the metaverse, think about product development scope by co-creating offerings with users themselves.
There are five theme parks that users can interact with within the Hyundai Mobility Adventure that will get gamers excited. This includes;
- Festival Square: a central base camp for players to celebrate and view vehicle displays
- Future Mobility City: an ultramodern metropolis where players can experience Hyundai Motor’s future mobility solutions and hydrogen fuel-cell technology
- Eco-forest (powered by IONIQ): a recreational sphere offering minimalist and slow living enabled by the coexistence of eco-friendly mobility technologies and fairy-tale fantasies
- Racing Park (powered by N): a racing theme park where players can experience the latest advanced racing technologies and motorsports available via Hyundai Motor’s high-performance N brand cars
- Smart Tech Campus: a future technology research centre where users can replicate the experiences of engineers and designers in a sophisticated setting
Conclusion
Technologists believe the metaverse will grow into a fully functioning economy in a few short years. Early movers will define how these virtual worlds operate. For example, land owners in Sandbox enjoy voting decisions about norms within the meta platform. As an investment, these digital assets will rise much like bitcoins which have now started to look like digital dinosaurs. Rules are in place to protect the value of these associated tokens. For example, Decentraland burns all MANA tokens used to purchase digital assets. Removing them permanently from circulation increases the value of the remaining tokens.
The metaverse isn’t just a virtual reality, it is a profitable reality where decentralised autonomous organisations (DAOs) like the Decentraland Foundation are only just exploring the many ways to monetise experiences.
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