Time to Get Meta?
In October 2021, Facebook changed its name in homage to the metaverse. By combining real and online worlds, the metaverse, says Facebook, will be “the next evolution in a long line of social technologies.”
So this is why Facebook has been suggesting that people make all those cartoonish avatars of ourselves? Similar elements feature in Roblox and other online game concepts. Now, Facebook plans to hire 10,000 people in Europe to help its proprietary metaverse get out in front.
The Allure of the Meta
Facebook is one of the best-known tech firms banking on a future of online shopping malls, remote game nights, near-perfect digital concerts featuring real performers, places to meet and greet real people virtually, and ways to interact with friends and family wherever they are on the globe. Millennials and younger people, especially, could be hanging out often in these places. After all, the narrative goes, they are digital natives.
The teens and twenty-somethings of Generation Z are bound to invest in a culture with both virtual and traditional real estate on offer, right? And, even before that stage, they’ll be ordering virtual (and real) clothes, shoes, vehicles and houses. To do it all, they’ll also be buying up the cryptocurrencies accepted on the various blockchain platforms where they choose to make their purchases.
It’s a digital-era mix of design, entertainment, interaction — and monetizing all of the above. The pandemic almost certainly helped propel this trend, as in-person meetings became difficult, and online social events became normalized. On cue, rappers and other celebrities are jumping onto the scene, making the metaverse all the more enticing for their followers.
About That Virtual Real Estate…
Now we arrive at the core of the matter. But what is it? Digitally designed real estate could be anything from undeveloped land to malls, mansions, arenas, studios, bars and hotels. Digital maps mark these venues in places like SuperWorld, Somnium Space, Cryptovoxels, Upland, the Sandbox, and, soon to come, Atari.
Next, the Metaverse Group plans to introduce a metaverse-focused REIT (real estate investment trust). The Canadian investment company Tokens.com is taking a 50% stake in its real estate shares in order to put the offering together. It’s a serious deal with high financial stakes. The CEO of Tokens.com, Andrew Kiguel, formerly raised funds for traditional REITs.
Whether regulators are ready to give the go-ahead is another question. We can expect queries about the risks inherent in virtual property deals that use real money and occur under pseudonyms.
“Very, Very Big”
Digital real estate is already a big deal. Looking back, the concept has pre-crypto forerunners, such as the property acquisitions on Second Life, produced by Linden Lab in 2003. It’s the kind of game that appeals to our fantasies. In the online world, we can all have gorgeous homes with every feature we can imagine. We can finance more properties, collect rent if we wish, and do all the things with our virtual assets that traditional investors do. And, presumably, there aren’t too many worries about deed restrictions and zoning.
Purchases are highly competitive at Decentraland, a top platform built on the Ethereum blockchain. Investor buyers find virtual properties for sale on the platform’s marketplace, where the parcels might fetch anywhere from a few thousand to a million dollars.
Yes, the metaverse is expected to become “very, very big.” This is the prediction of former Atari CEO Frederic Chesnais, who now heads up the company’s blockchain segment. It’s a fascinating interplay of art, digital design, and property. Still, you might ask: Why buy pretend real estate? How does that make any sense?
Well, to quote a Nobel Prize recipient from a prior generation: The times, they are a-changin.
Supporting References
Stephanie Hughes for the Financial Post: Why People Are Paying Real Money for Virtual Real Estate in the Metaverse (Oct. 21, 2021).
Clare Trapasso for Realtor.com: Digital Land Rush Has People Spending Big Money on Virtual Real Estate. But Why? (Jun. 17, 2021).
T.P. Yeatts for The Real Deal: First Metaverse REIT Could Hit Public Exchange Within a Year (Sep. 29, 2021).
Elizabeth Howcroft for Reuters.com: The “Metaverse” Bet: Crypto-Rich Investors Snap Up Virtual Real Estate (Apr. 19, 2021).
Photo credits: Areous Ahmad and Jonathan Borba, via Pexels.