- By Joe Tidy
- cyber journalist
Nearly $2 billion (1 trillion 344 billion 656 million FCFA) has been spent on virtual lands in the past 12 months, according to a study, as individuals and businesses race to find a foothold in the metaverse.
But it will be years before the metaverse emerges as a uniquely immersive online space where people can live, work and play in virtual reality. So is the land grab just a big gamble?
“Show my work”
With her giant dark red Mohican and permanent cigarette, artist Angie Thompson’s avatar doesn’t look like a typical land tycoon. But she is one of a growing number of people clamoring for new virtual worlds.
“I bought my first metaverse plot in July 2020 and paid about £1,500 (1,135,319 FCFA) for it. I bought it to exhibit my works, but also to organize metaverse events that would enable the promotion of my art and others.” she explains.
Angie, from Brighton, has built two galleries filled with weird and wonderful digital artwork, which are sold for cryptocurrency, on her land in the world of Voxels.
Angie’s plots are the size of a small family home (compared to the size of her avatar). The largest spans three floors and has a roof terrace with a white and black striped road junction and a pink taxi that constantly goes back and forth just for fun.
But it is from the air that we get a true idea of the size of this world.
“Hold the F key and you can fly to take a look at my neighborhood,” Angie says. Above her gallery, you can see thousands of identical earthen boxes stretching into the horizon.
Voxels is one of dozens of virtual worlds that describe themselves as metaverses. It’s confusing because people often talk about the “metaverse” as if it were just one. But until one platform begins to dominate, or these different worlds merge, companies sell the land and experiences in their own versions.
According to researchers from Dapp Radar, a metaverse analysis company, $1.93 billion (1 trillion 297 billion 764 million FCFA) of cryptocurrency was spent on buying virtual land last year alone, including $22 million (14,790,947,000 FCFA) for about 3,000 plots land in Voxels.
Dapp Radar can track this phenomenon because Voxels is built on the Ethereum cryptocurrency system, in which, like all virtual currencies, every transaction is recorded and published on a public blockchain.
One of the most popular worlds is the cartoon Decentraland. Launched in 2020, plots of land there sell for thousands, sometimes millions of dollars. Samsung, UPS and Sotheby’s are among those who have bought land and built stores and visitor centers on it.
Luxury fashion brand Philipp Plein also owns a plot the size of four football fields, which it hopes will one day house a Metaverse store and gallery.
However, the owner, Mr. Plein says his mother is not convinced by his $1.5 million (1,008,978,400 FCFA) purchase.
My mother called me and said: “What did you do, why are you mad, why do you spend so much money, what is it?”.
Mr Plein has been selling goods in 24 different cryptocurrencies online for over a year. Earlier in 2022, he opened a new store on Old Bond Street in London, selling clothes and some non-fungible tokens (NFTs) in exchange for cryptocurrencies such as Bitcoin and Ethereum, as well as books.
He says opening the store has allowed him to learn more about Metaverse and adds, “I took a bold step by spending so much on the ground.
“But I said to myself that I had over 24 years with my brand and what should I do if I had to start over?
However, with the overall decline in the value of cryptocurrencies, Dapp Radar claims that metaverse real estate values are near their lowest levels in a year.
In Sandbox, another of the crypto metaverses, Adidas, Atari, Ubisoft, Binance, Warner Music and Gucci are just some of the multinational corporations that buy land and build experiences to sell and promote their products and services.
Gucci has also built on Roblox, which along with other major gaming platforms like Minecraft and Fortnite is considered the largest audience of the new metaverse.
These gambling companies do not sell land and are run without the use of any blockchain technology. However, they already have some of the key ingredients that science fiction writers say we need for a true metaverse:
- the opportunity to meet and play
- their currencies in the world
- the opportunity to earn money on the platform
- large thriving communities
Gucci Town has received more than 36 million visits since its launch a year ago, while Nike Land has recorded more than 25 million in 11 months. In Gucci Town, players can buy clothes for their avatars with real money. In Nike Land, they can get t-shirts and shoes for their avatars with the points earned during the game.
Fashion seems to be the sector most eager to grasp the opportunities and risks associated with the metaverse.
Amsterdam-based digital-only fashion house The Fabricator produces only avatar clothing, designing custom collections and apparel for users of Decentraland, Sandbox and other cryptometaverses.
“But we were strong believers in the idea that in the future, people would wear digital things,” says Amber Jae Slooten, co-founder and lead designer.
The manufacturer’s record sale is a digital dress that reached $19,000 (FCFA 12,776,572), although it was sold as an NFT – a digital artwork – and was not worn by its owner’s avatar.
The company has just raised $14 million (9,414,217,800 FCFA) from investors who are betting on the idea that many of us will soon live part of our lives in the metaverse.
But it is not certain that this will happen, or when. Crypto metaverses are usually sparsely populated and really only used in events, and even then only thousands, not millions, of people participate.
Even in the virtual world in which Meta, the owner of Facebook and Instagram, invests billions of dollars, leaked memos show that people don’t stay long.
But Ms. Slooten is convinced that as these worlds expand, people will come.
“There will definitely be a mass market in this area because if you think about the younger generation, they are already playing games. For them there is no difference between virtual and real. But it still needs to be built.”