Ready or not, the metaverse is here. Software developers have created virtual worlds with 3D avatars and graphics where users can interact, entertain, and even conduct business. Users have established virtual presence in these worlds and are even building communities and taming the digital frontier. As with any new evolution of our increasingly digitized world, businesses are seeing opportunities in this latest development and are moving to build out their own online presence in the metaverse. To do this, one must have virtual real estate on which to build, and companies are spending substantial sums to purchase tracts of digital ‘land’ on various platforms.
While the internet can seem infinite at times, the supply of digital real estate is finite - there are currently 268,645 parcels of virtual land (dubbed ‘LAND’) available across the four major metaverse platforms - Decentraland, Sandbox, Cryptovoxels, and Somnium. The end result is a virtual real estate market worth an estimated $500 in 2021, according to CNBC, with the four major platforms conducting tens of thousands of annual transactions. According to MetaMetric Solutions, the market is projected to double to $1 billion in 2022, and rise at 31% CAGR from 2022 to 2028
Like any booming market, investors have taken note, with global companies such as Samsung, PriceWaterhouseCoopers (PwC), and JP Morgan Bank recently purchasing digital parcels to reach new potential clients and provide existing customers with a unique digital experience. A wide variety of industries, including financial institutions, consultancy firms, consumer brands, and celebrities have also signed on, purchasing plots to interact with the general public. Even the government of Barbados has waded into the market, establishing a virtual embassy on the Decentraland platform.
“The Metaverse offers new possibilities for organizations to create value through innovative business models, as well as introducing new ways to engage with their customers and communities. We will leverage our expertise to advise clients who wish to embrace the Metaverse on the full range of challenges presented by this emerging global digital phenomenon,” said a partner with PWC Hong Kong in a press release.
While many are still reacting to the metaverse with a healthy dose of skepticism – after all, the concept has been around for decades in the form of Linden Lab’s Second Life – institutional investors are betting big on this latest iteration of social media, and the market is reflecting their enthusiasm.