To enjoy Metaverse, you need to own crypto-currency and VR goggles.
Heard someone living in Mumbai bragging about being Snoop Dogg’s neighbour? He then probably also has a bored ape as his Instagram profile which would have bought for a couple of hundred thousand dollars. Welcome to the world of digital real estate. Are people actually buying virtual land? Yes, they are—people are also buying rainbow cats for $600K. But how does it compare to something real?
Let’s see what’s been happening.
The concept: Think of this real estate not like land, but more as a space for grabbing attention. Imagine you could buy the landing page on a website like Amazon or YouTube and then rent it out to anyone who wanted to advertise. This is what metaverse is about. It’s not a centrally owned space like YouTube. Instead, it is a space that can be owned by anyone and rented or sold to anyone else. Hence, one metaverse is also called Decentraland. But yes, it’s the creators who are selling it for now and who do own a chunk of it of course; most metaverses are not rewarding plots of land, unlike the autonomous. The reason companies invest in it now is because they feel they’ll eventually make money by leasing it out to enough people to make whopping returns. The way this will actually work is that the virtual landowners now sell this land to actual developers—no, not like HCC, but more like HCL, who actually code to make virtual areas—concert halls, party yachts, football stadiums. Whoever played COD, loved playing it at the airport. Now imagine that you could play 5 different games at the same location and all creators of that game would pay money to rent out that space. Someone may decide to hold a music concert. Others could be setting up stores around it. Imagine waking up, putting on your VR goggles and heading to play COD at the airport.
The creators of the Metaverse might actually make you walk through certain parts of it, which would have high end fashion and electronics stores. Each of these stores stand in your way waiting for footfalls. Or someone may decide to put up a virtual billboard. You can stop by at Samsung, see their new TV in a 3D VR, and buy it too. Up, up and away!
A fund bought 6,000 sq ft of digital land in Decentraland for $2.4 million. That’s more pricey than the prime shopping malls in India. The other very famous metaverse, Sandbox, had a plot of land purchased for $4.3 million by another investment fund. Justin Biiber just did a live concert in one of the metaverses. You could wear an AR headset and see an animated Justin with the voice streaming live. Samsung has recently inaugurated a store in Decentraland which mimicked another flagship store—you can go inside and buy their latest flip phones with crypto. Famous brands such as RL, Burberry and Gucci are collaborating with gamers and metaverse creators by allowing the digital “you” to try on their clothes. Microsoft’s acquisition of Activision Blizzard for $68.7 billion (the same company that made Call of Duty and the Airport Battleground, which is etched in every teenager’s memory) is said to value the company’s technological capability for the metaverse world.
But not without controversy Whether it’s Snoop Dogg or the big brands, monetisation is some time away. Most aren’t paying for any of the virtual land. That does not stop investment funds who are banking on the fact that eventually people will pay for it. A platform called CEEK recently took out a video of H&M’s virtual store without revealing any details. This led to practically every paper including the Economic Times, India Today and others quickly claiming that H&M have opened a store in the metaverse. Eventually, H&M released a public statement that they had not and this was simply CEEK’s “concept” pitched to them. There is a very high chance the virtual land is extremely overpriced, but the jury is still out. The fact that every metaverse has limited land, but there are UNLIMITED metaverses works much in the same way as social media. There are unlimited platforms but then only one Instagram. And yes, to enjoy Metaverse, you need to own crypto-currency and VR goggles.
The concept is amazing. The space is growing. And it’s easy to imagine it as the future. But is it a good financial investment right now? I don’t think anyone with certainty can say so.
Uddhav Kumar is CEO, Lynkit Solutions Pvt. Ltd.