According to research, nearly $2 billion (£1.75 billion) has been spent on virtual land in the last 12 months as individuals and businesses compete to establish themselves in the metaverse.
But it will be years before the metaverse becomes a single virtual reality environment where people can live, work, and play. Is the land grab essentially a big gamble?
The avatar created by artist Angie Taylor does not resemble the typical land tycoon thanks to her enormous dark red mohican and perpetual cigarette. She belongs to a growing group of people, though, who are laying claim to brand-new virtual worlds.
“I bought my first metaverse parcel in July 2020 and paid about £1,500. I bought it for exhibiting my own work, but also for running metaverse events that would promote my art and also other people’s art,” she says.
Angie, a resident of Brighton, created two galleries on her land in the Voxels universe that are filled with bizarre and exquisite digital art that is sold for cryptocurrency.
The size of Angie’s plots is comparable to a small family home (if you compare them to the size of her avatar). The tallest building has three floors and a roof terrace with a road crossing with white and black stripes, as well as a pink taxi that is always driving back and forth for amusement.
But from the air, you can truly appreciate the size of this planet.
“Hold down the F key and you can fly up to take a look at my neighbourhood,” Angie explains. Above her gallery you can see thousands of identical boxes of land stretching to the horizon.
One of the many virtual worlds that identify as metaverses is voxels. People frequently refer to “the metaverse” as if there were only one, which is confusing. Companies are selling land and experiences in their own versions until one platform begins to dominate or these separate worlds come together.
According to metaverse analysts DappRadar, $1.93 billion in cryptocurrency has been used to purchase virtual land in the last year alone, with $22 million of that amount going toward purchasing about 3,000 Voxel parcels of land.
Because Voxels is based on the Ethereum cryptocurrency system, which, like all virtual currencies, logs and publishes every transaction on a public blockchain, Dapp Radar can keep an eye on this.
The cartoonish Decentraland is one of the most well-known worlds. Land parcels there, launched in 2020, are selling for thousands, and occasionally millions, of dollars. Among those who have purchased land and constructed stores and visitor centers there are Samsung, UPS, and Sotheby’s.
The high-end clothing company Philipp Plein also owns a plot of land the size of four football fields that it plans to eventually turn into a gallery and store for the metaverse.
Owner Plein claims that despite his $1.5 million purchase, his mother is not persuaded.
“My mother called me and said, ‘what did you do? Why? Are you crazy, why do you spend so much money, what is this?’,” he says.
For more than a year, Plein has been conducting online sales using 24 different cryptocurrencies. He opened a new store on London’s Old Bond Street earlier in 2022, selling clothing and a few non-fungible tokens (NFTs) in exchange for pounds and cryptocoins like Bitcoin and Ethereum.
He claims that starting the store allowed him to gain more knowledge of the metaverse and he continues, “I took a risk by spending so much money on a piece of land.
“But I was thinking that I’ve had over 24 years with my brand and what would I have to do if I was starting again?”
However, according to Dapp Radar, the value of metaverse real estate is close to a one-year low due to the general decline in the value of cryptocurrencies.
Adidas, Atari, Ubisoft, Binance, Warner Music, and Gucci are just a few of the multinational corporations buying land and creating experiences in Sandbox, another of the crypto metaverses, to sell and promote their goods and services.
Gucci has also incorporated Roblox, which is regarded as the most well-known of the nascent metaverses, along with other significant gaming platforms like Minecraft and Fortnite.
These gaming companies operate without the aid of any blockchain technology and do not sell real estate. But they already have some of the essential components that science fiction authors claim we need for a genuine metaverse:
the ability to hang out and play
their own in-world currencies
the opportunity to make money on-platform
huge thriving communities
Since its debut, Gucci Town has received more than 36 million visitors, while Nike Land has seen more than 25 million in just 11 months. Players can spend real money in Gucci Town to purchase clothing for their avatars. With the points they earn from playing games, players can buy T-shirts and shoes for their avatars in Nike Land.
The industry that appears to be most eager to take advantage of the opportunities and risks presented by the metaverse is fashion.
digital-only clothing store The Fabricant, an Amsterdam-based company that only creates apparel for avatars, creates collections and custom outfits for people who use Decentraland, Sandbox, and other crypto metaverses.
“When we started, everybody called us crazy, because they were like, ‘why would you need this?’. But we very strongly believed in the idea that in the future, people would wear the digital items,” says co-founder and lead designer Amber Jae Slooten.
The Fabricant’s most expensive sale to date was a digital dress that went for $19,000, despite the fact that it was sold as a non-functional toy (NFT) and not by the owner’s avatar.
Investors who are betting on the possibility that many of us will soon spend a portion of our lives in the metaverse have just invested $14 million in the company.
However, it is uncertain whether or when that will occur. Most of the time, the crypto metaverses are sparsely populated and only really used when events are held, and even then, only thousands, not millions, of people participate.
Leaked memos reveal that even in the virtual world, where Meta, the company that owns Facebook and Instagram, is investing billions of dollars, users are not staying for very long.
Slooten, however, is certain that as these worlds advance, people will arrive.
“There will be for sure a mass market in this because if you think about the younger generation, they already play games. For them there’s no distinction between virtual and real. But it still needs to be built.”
(Adapted from BBC.com)