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Motley Fool Issues Rare “All In” Buy Alert
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For many metaverse skeptics, it may seem like the virtual worlds of the metaverse are nothing more than hyped-up video games for teenagers, but metaverse investing is more important and nuanced than it may seem. Metaverse real estate, virtual property you can hold with a verifiable virtual deed, is a serious pursuit for many.
Although prices across the board have dropped significantly since the crypto winter started in the spring, metaverse real estate is a long way from being down and out. Despite the instability brought to financial markets by Russia’s invasion of Ukraine, global inflation, supply chain shortages, an ongoing pandemic, and rising interest rates, virtual real estate continues to command the attention of a huge range of investors, from individual land holders to small virtual real estate companies and even corporations looking to get in on the market.
Here are a few reasons you should be paying more attention to this emerging asset class.
Although financial institutions aren’t all-knowing, they do tend to have a way with money. And they have analysts who can help them to figure out just how much a potential new investment might be worth to them in the longer term. That’s why when Citigroup published a report in March predicting the metaverse could be an $8 trillion to $13 trillion addressable market by 2030, people took notice.
A lot of things have changed in investment markets since March, but consulting firm McKinsey & Co. still felt pretty bullish about the metaverse. It issued its own prediction in June of a $5 trillion market in the metaverse by 2030. Even that wasn’t the last word on the subject. DBS Bank, the largest bank in Southeast Asia, also issued a prediction for a market value of between $3 trillion and $11 trillion by 2030 in a research report in July.
Reports are great, but when it comes to boots on the ground, financial leaders are still not shy about their enthusiasm for the metaverse. Investment banks JPMorgan Chase and Fidelity have both established their own virtual offices and interactive experiences in metaverse platform Decentraland (MANA -1.66%).
There are a number of companies finding ways to make their metaverse real estate purchases worth a lot more than just the money they spent on acquisition. For example, Tokens.com is a huge landlord for metaverse properties, offering consulting services and virtual real estate rentals to companies around the world under its Metaverse Group subsidiary.
Another big player is privately held metaverse landholder LandVault (formerly Admix). This company also connects brands to metaverse real estate projects, as well as providing design services for those spots. In a recent interview with Fast Company, owner Sam Huber explained that the company earns rents upward of $60,000 per month per property for custom-designed structures in metaverse worlds.
These are just a few examples of the real-world money coming out of the virtual worlds of the metaverse.
Although fashion brands have made a lot of noise with their entry into the metaverse (and rightfully so), there are lots of other companies finding their homes on the digital streets of platforms like Decentraland and The Sandbox (SAND -2.54%).
For example, HSBC Bank has picked up a chunk of land in virtual world The Sandbox to build a virtual stadium for both sporting events and e-sports, and although the final stadium isn’t complete, it can be assumed this will look like other stadium models in the metaverse, with live play appearing on large screens in stadium settings where other team-branded events take place; Paramount Global‘s CBS has entered at Decentraland, with a property built exclusively to promote its popular program Ghosts.
Samsung has famously built a digital twin of its 837 store in Decentraland, as well, where it regularly hosts new product releases that allow customers to interact with digital copies of products, watch videos about said releases, and even order for home delivery. Even Honda and Hyundai have their own virtual car lots to help with new vehicle launches in the metaverse, with interactive displays and metaverse-only incentives if you choose to visit a metaverse dealership. Products still have to be ordered from secure websites, but the far more immersive experience for a variety of items can answer more questions, build brand loyalty, and create a (mostly) end-to-end sales experience.
Although it might seem like child’s play to build digital buildings and host digital events in a virtual world, these activities are becoming very serious pursuits for many. As the metaverse expands, so will the opportunities for all kinds of companies and brands. Those early adopters may find that they’re a few steps ahead of the rest of the world as adoption of this virtual space grows.
Buying metaverse real estate now, rather than waiting for some time in the future, is a solid move if your company can benefit from a virtual experience for potential customers, or you’d like to get involved in designing and creating the metaverse as a real estate developer.
Citigroup is an advertising partner of The Ascent, a Motley Fool company. JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Kristi Waterworth has positions in Decentraland and Sandbox. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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