When you think of buying real estate, your first thought is probably “Okay, where is it?” After all, location is essential when you think about important factors like property tax, rental market prices, and appreciation. But what does location mean when we’re talking about virtual real estate in the metaverse?
Like so many online assets, location in the metaverse works very similarly to location in the physical world. You can visit venues and spaces in Decentraland the same way you plug in an address in Google Maps. The only difference is, instead of driving to a physical address, you’re transported to your virtual destination immediately. And, just like in the real world, you can purchase undeveloped real estate or real estate that’s already been built out. You can choose a prime location right next to a piece of virtual real estate owned by Nike or Adidas, or you can take your chances on a lesser-known area that hasn’t attracted as much attention yet.
But why? Why are people paying for virtual real estate? In a nutshell, buying into the metaverse could be very lucrative. You can also do many things, including: Building a new business, creating a video game, socializing with friends, and much more. Here’s why people are paying close attention to virtual land.
1. Real Estate Developers are Buying and Building Virtual Real Estate
Virtual real estate is being developed into malls, virtual office spaces and meeting spaces, event venues, and decentralized gaming spaces. With consumers showing interest in paying for high-quality online experiences, virtual real estate developers are currently spending millions of real-world dollars to deliver those experiences in the metaverse. In fact, according to The Motley Fool, virtual real estate parcels have gone for as much as $2-4M.
2. Top Brands are Moving to The Metaverse
According to CoinTelegraph, Nike grossed $44.5B in FY 2020 (ending May 31, 2021) – and that’s just in the physical world. With decades of experience developing cool products and killer marketing campaigns that make people WANT their shoes and apparel, Nike knows what sells. Until now, while it has made forays into technology with Nike+, the athletics company has largely stuck to shoes, apparel, and workout gear. Until now. With its purchase of a company that sells NFT shoes, Nike – like Adidas and other top brands – is stepping into the world of the metaverse and virtual real estate.
3. Virtual Real Estate isn’t as New as You Think it is
Still think that the metaverse is just the next passing fad? Virtual real estate isn’t nearly as new as you think it is. The idea of virtual spaces to live, work, and play isn’t new. It dates back to games like SimCity (and, of course, The Sims), and it’s been a prevalent concept in online experiences like Second Life and MineCraft. People have been interested in and interacting with these virtual spaces for more than two decades. Today, with advancing technology, the metaverse is just the latest version of a commodity that people have wanted for years. Virtual real estate is here to stay, and early adopters have a unique opportunity to take advantage of it.