To minimise risk, a potential strategy is to make targeted small investments across different platforms as part of your innovation budget. The virtual property market is clearly speculative investors could lose everything. New players could displace the current heavyweights with a more attractive range of features, and cause the value of investments on the old platforms to crash.Īvoid speculative deals, and keep a sharp eye on market trends
But the main risk is the future popularity of the metaverse platforms themselves. The choice of location within a platform will also be decisive much like real-world properties, the number one rule in virtual real estate is ‘location, location, location’. Handling cryptocurrency is still a complex endeavour, and the ability to transfer virtual goods between platforms is currently limited. Success, however, comes with certain strings attached – not least that the metaverse needs to become a lot more user-friendly. As in the real world, certain spaces within the metaverse will attract more virtual crowds than others, meaning the value of the real estate and land nearby will increase. Investors can generate income by renting out their properties – for example, to companies looking to host a special event – and profit as the value of the digital land appreciates. In principle, a lot of business models in the traditional real estate sector have excellent potential in the metaverse. Great potential, but success comes with strings attached They have the scale to develop competitive products in-house, as well as the financial scope to mount a targeted M&A strategy for existing platforms. And big brands that have already amassed considerable market power and built a big user base are eager to seize the opportunity that comes with first-mover advantage. New players are still flooding into the metaverse, hoping to profit from the current hype. The fact that there are open interfaces enabling virtual assets (such as fashion) to be used on every platform suggests we could end up with a fragmented market. Despite these three currently dominating the market, the past has shown that not all pioneers manage to survive. The three largest platforms – The Sandbox, Decentraland and CryptoVoxels – generated US$458 million of transactions in 2021. For example, users have hosted concerts and opened art galleries, and a number of big retail brands have taken initial steps to set up virtual experiences too.
#Metaverse land free#
In these virtual worlds, users are free to design and monetise the land they own in any way they choose.
Real estate in the metaverse still finding its feet
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