Owning Real Estate in the Metaverse
First of all, what is Metaverse?
Metaverse is a term that has been bouncing around in the worlds of tech, business, and finance. After Facebook changed its name to “Meta”, everyone has at least heard of the term but maybe not quite familiar with exactly what it is. You can read one of Headline Asia’s partners Joseph Huang’s thoughts on the metaverse and VC’s outlook on it here. The metaverse has actually been around for 30 years now. Essentially, it is a virtual world where users can do basically anything like in the real world, such as selling or owning real estate, which is what we will specifically discuss about in this article.
Why should I care about Metaverse real estate?
It might make you wonder what it is like to own real estate in the Metaverse? To explain simply, it is the same thing as owning real estate in the real world, but in pixelated form. The reason you might buy pixelated land is because they’re programmable spaces that you can customize however you want. You can make it a virtual reality platform where people can socialize, sell NFTs, attend meetings, go to virtual concerts, etc. Owning virtual land can be regarded as the future of everything we know of today, from working in virtual offices to going to the Ariana Grande x Fortnite Rift Tour.
These parcels of digitalized lands have various ways of offering lucrative opportunities. Metaverse properties can be developed, leased, or flipped. The first time there was a “land” auction was in December 2017, where a plot of land cost about $20 USD. In early 2022, the same parcels’ prices skyrocketed to $15,000 USD apiece.
The metaverse real estate market is not the only one that has future value; GameFi, Avatars, etc are also one of the biggest digital assets. (Read here on the rising trend of GameFi in SEA and Japan.) For many years, companies have been heavily investing in virtual land properties, even celebrities like Snoop Dogg bought LAND from Sandbox, neighboring big companies like Tokens.com, Republic Realm, etc.
The big four of the Virtual Land
The majority of Metaverse real estate is actually owned by four major players: Sandbox, Somnium Space, Decentraland, and Cryptovoxels.
The biggest of the four is Sandbox, owning approximately 62 percent of the entire metaverse real estate market. Here, LAND is at an average cost of 11,000 with the premium LAND selling between 20,000 to 30,000 USD.
Decentraland is a 3D Virtual Reality platform built on the Ethereum blockchain. Ownership of virtual land is given through LAND NFTs with the specific coordinates on the grid and a reference to digital assets details.
Similar to Minecraft, you can buy virtual land and build on it. There are options to customize it however you want. The platform also has built-in tools for editing, creating avatars, and chatting.
4. Somnium Space
Somnium Space is a blockchain virtual reality metaverse built entirely by the players themselves. The 3D virtual world gives users immersive VR experiences that can be accessed on desktops and on mobile devices.
The future is virtual real estate?
The metaverse is a place with a lot of opportunities. Big brands have already seen its potential and have started investing in virtual worlds. Here are some of the examples:
- The pioneer of video games, Atari has already bought a piece of the metaverse land in Decentraland and The Sandbox. Visitors can play games and attend events there.
2. Samsung bought its digital land and named it the “Samsung 837X”. The design is based on its real world real estate, the Samsung 837 store in New York City. Other than offering immersive experiences with their products, they have also innovatively launched the “Unpacking event” for their new Galaxy S22 phone.
3. Adidas purchased a plot of digital real estate with the intention of filling it with exclusive branded content, letting its audience experience its branding through the virtual world.
As with anything with opportunity comes the risk and uncertainty along it. The metaverse land is a land full of potentially big rewards but that is only if you research and learn more about it, that you can reap its benefits.
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