Metaverse: What Real Estate Realities? Hervé Parent, Property Business Accelerator

Metaverse is presented as the next digital revolution that will affect our lives. Is this a real topic for real estate professionals?

Metaverse is written in the plural!

For Wikipedia, a metaverse is a virtual world in which spaces are accessible via a headset or a screen. This term is also regularly used to describe a future version of the Internet. Another definition conceives the metaverse as a set of virtual worlds connected to the Internet and perceived in augmented reality. These metaverses can be social networks, video games, trading platforms, corporate networks, or even video conferencing. People are represented by avatars.

Many metaverses have been developed since in October 2021, Mark Zuckerberg announced that Facebook would devote a large part of its activity to the development of a metaverse, called “Horizon Worlds”. For its part, Microsoft has launched Mesh for Teams, a solution which allows you to appear as an avatar in Teams and which also gives the possibility of meeting in a dedicated virtual space. More specifically in relation to real estate, the two metaverses, Decentraland and Sandbox, have enabled 16,000 sales representing $229 million in virtual properties in just a few months. Beyond these main directions, dozens of metaverse projects have been launched over the past year.

Two real estate visions on the metaverse are possible. The first vision is that of the investor who buys a virtual property on one of the platforms that allow it.

The second is that of the real estate agent who will use a metaverse to market real estate, as he already does on an advertising site or a social network.

Some metaverses are presented as cities within which a plot can be acquired and a building can be built. Some brands, especially luxury or sportswear, have taken a big step, either to protect their brand by preventing a pirate from taking it down, or to sell their products. Thus, we will see avatars wearing Gucci or wearing Nike. The excitement generated by the launch of the metaverse generated a first wave of virtual real estate purchases.

In this emerging market, real estate agencies appear like Metaverse Immobilier which is “a (Swiss) consulting company that supports its clients in buying, selling and renting real estate in the various metaverses, mainly in Decentraland and The Sandbox” : metaverse-immobilier .technology. Tiliaverse, an American agency, is also a good example of a meta real estate agency.

The idea is simple: metaverses will make it possible to present an avatar or a digital twin of the property for sale in its environment, in its neighborhood, all in a virtual form in which the customer will be accustomed to evolve, even to live. exclusively.

But until then, one can simply use a metaverse to display a 3D representation of a good. The most prominent project is Versity, the real estate metaverse of Agences de Papa.

It will be operational within a year, but a visit to the website already makes sense of the concept.

The first questions quickly came from experts who pointed out that a global metaverse, the famous web 3.0, requires a technical and software infrastructure that does not yet exist and that we will not be able to put in place for several decades.

Then the real estate meta bubble burst, and in Decentraland and Sandbox there was a 97% drop in real estate transactions, as well as an 80% drop in the average land price. At the same time, cryptocurrencies – in which transactions take place in the metaverse – have seen their prices plummet.

But the most disturbing is published by the newspaper Les Echos, which reports that Horizon Worlds, the metaverse of Mark Zuckerberg, suffers from quality problems and worse, the development teams do not use it. In fact, the metaverse of the former Facebook fails to convince and its audience is extremely low with only 300,000 users, mostly located in the United States. Worrying, when you know that Meta claims to have invested $13 billion in the development of its metaverse…

Finally, there seems to be a gap between the communication that claims that the metaverse is there and that we will all live there tomorrow and the reality of an interesting innovation, which nevertheless remains in the stage of an invention to be developed and then released . First it will be adopted by an audience of Geeks, then, perhaps later, by the larger number.

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