Own the right real estate in the Metaverse, with help from GIS
If you thought reserving land space on Mars is bizarre, real estate is building up in the alternate universe of Metaverse as well. Yes, that’s right. Discussed extensively in recent journals and now trending across social media, buying, and selling of land in the Metaverse is today a reality.
In the words of author Neal Stephenson, who described the virtual space in his 1992 sci-fi novel Snow Crash, “Metaverse is an all-encompassing digital world that exists parallel to the real world.” Within this universe, continents, countries, cities, villages, and regions, all exist in virtual avatars. And Metaverse real estate plots are land parcels of the virtual world. Or simply, pixels.
One can simply acquire land plots on Metaverse, develop, and sell experiences to other users, through a platform's marketplace, or opt for a blockchain-based third-party NFT platform. Location intelligence will play a big part for corporate in assessing where to purchase Metaverse retail space for maximum visibility and relevance. As corporations increase their investment in Metaverse offerings, they will look to the best locations to represent and showcase their services/products. Integrated with the Geographic Information System (GIS) that made digital maps possible, Metaverse has cracked open a huge real-estate business opportunity, where retailers can select a prime location to place their brand in prominence in different worlds of the Metaverse universe, namely The Sandbox, Mirandas, and Decentraland, on which people can interact in different ways.
Owning the Pixels
GIS and site selection software can help determine foot traffic, parcel values, and proximity to other Metaverse entities. Site selection as a practice is a type of analysis used in GIS to determine the best place or site for something. Potential sites used in suitability analysis can include the location of a new hospital, store, or school, among many others. This is primarily used in real estate to help determine the best return on investment and to curb administration costs. Merging of GIS technology in Metaverse allows aggregation, analysis, and visualization of spatial data, and provides similar benefits throughout the site selection process. Finding the right location for your business is after all critical for success, same as in the physical world of retail. This programmable space where people can mingle, perform games, or go to gatherings, can mean a whole new set of the target audience for retailers.
There are noted cases in which it makes financial sense to engage in systematic and professional site selection. If an entity would want to choose a premium plot in “The Sandbox”, this may cost up to a million dollars. By seeing the places at which these different variables overlap, with the help of GIS, an intelligent decision can be made with the best financial outcome.
Within the Metaverse, the most popular platform is the Sandbox which dominates the market, with 62% of the available land and three-quarters of all land sales in 2022. The Sandbox is a decentralized gaming ecosystem where users can create, share, and monetize NFTs and other gaming experiences on the Ethereum blockchain. Partnering with video game and IT companies, its popular virtual real estate properties called “LANDs” have become central figures in the NFT world.
Monetizing the Pixels
NFT metaverse land is a plot or asset of virtual real estate represented by a non-fungible token. Depending on the platform, the owner can use their land for socializing, advertising, work, gaming, and other use cases. Each parcel plot is a unique NFT on the Ethereum blockchain that property owners can develop to earn income. For museums and art galleries, NFT owners can showcase and charge entry fees, which is perhaps the most useful application for digital art.
Adjacent parcels or “assets” of LAND can merge to form an ESTATE, which gives the owner an even larger area to develop. Within The Sandbox, a total of 166,464 parcels of LAND are available. Since there's a finite number of LANDs, owners can even merge their lands and collaborate on developments. Visitor counts can be greater, which leads to higher visibility for property owner’s developments (like games and galleries) and greater income potential.
Land NFTs are in general turning out to be a fantastic investment for people searching for a steady stream of income. One option is to turn a plot of land into something you can rent out for events, housing, or branded content. Others have created opportunities on their land, such as casinos and games, which provide users with fun and excitement while also providing investors with a decent return on investment.
Sales of real estate in the metaverse topped $500 million last year and could double this year, according to investors and analytics firms. It projects that at this pace sales could reach nearly $1 billion in 2022. One of the biggest buyers, Republic Realm, paid a record $4.3 million for land in the largest metaverse real estate platform, Sandbox. The company is developing 100 islands, called Fantasy Islands, with villas and a related market of boats and jet skis. Ninety of the islands sold on the first day for $15,000 each and some are now listed for resale for more than $100,000. This decision will have an immediate and long-term impact on tax structure, cost of goods sold, supply chain, labour force, and overall operating success, as per the choice of location. With tech giants such as Facebook…er, Meta, Microsoft, Apple, and Google investing big money in making the virtual a reality, the market is bound to boom in the future.
Analyzing your Metaverse location will help you to understand your customers and their shopping decisions. It is vital to know your customers and their shopping decisions to increase profitability and launch new strategies.
This will help draw insights from location demographic data as well as plot a money-making group of customers and learn more about their lifestyle and behaviours.