Facebook chief Mark Zuckerberg on Thursday announced the parent company’s name is being changed to “Meta” to represent a future beyond just its troubled social network. The new handle comes as the social media giant tries to fend off one of its worst crises yet and pivot to its ambitions for the “metaverse” virtual reality version of the internet that the tech giant sees as the future.
Republic Realm announced it had spent a record-breaking $4.3 million on digital land through the “virtual world” website The Sandbox, following on from a $2.4 million digital land purchase by crypto company Tokens.com through Decentraland in late November. Such websites are self-labelled as prototypes of the metaverse.
This followed a $2.4 million purchase of land in late November on a rival platform, Decentraland, by Canadian crypto firm Tokens.com. Days earlier, Barbados announced plans to open a “Metaverse Embassy” in Decentraland.
Such websites bill themselves as a prototype of the metaverse, a future internet where online experiences like chatting to a friend would eventually feel face-to-face thanks to virtual reality (VR) headsets.
The Facebook rebrand “introduced the term ‘metaverse’ to millions of people a lot faster than I would have ever imagined,” said Cathy Hackl, a tech consultant who advises companies on entering the metaverse.
Hackl says she is unsurprised by the booming market, which is generating huge potential for virtual real estate. Hackl says digital land is already functioning as an asset in the same way that real land does.
Crypto data site Dapp has reported land worth more than $100 million selling in the past week across the four biggest metaverse sites. These include The Sandbox and Decentraland, as well as CryptoVoxels and Somnium Space.
And while it may be some time before these sites operate as true metaverses, transporting us elsewhere with VR goggles, digital land is already functioning as an asset just like real land, said Hackl.
Tokens.com has bought a prime patch in Decentraland’s Fashion Street district, which the platform hopes to develop as a home for luxury brands’ virtual stores.
“If I hadn’t done the research and understood that this is valuable property, it would seem absolutely crazy,” admitted Tokens.com CEO Andrew Kiguel.
Kiguel spent 20 years as an investment banker focused on real estate. He insists the Decentraland plot makes exactly the same kind of business sense as it would in the real world: it’s in a trendy area with high footfall.
But Kiguel predicts this form of digital ownership will become widespread in the coming years because the blockchain technology behind it creates trust and transparency when making transactions. “I can see the ownership history, what’s been paid for it and how it’s been transferred around,” he said. But the investment is not without its risks – particularly given the volatility of the cryptocurrencies used to buy NFTs.
“That is advertising and event space where people are going to congregate,” he explained, pointing to a recent virtual musical festival in Decentraland which attracted 50,000 visitors.
In Decentraland, everything from land to virtual artwork comes in the form of a non-fungible token, or NFT. Some people have spent tens of thousands of dollars on these digital items, and the concept has generated scepticism as well as excitement.
And while virtual concerts on sites like Roblox and Fortnite have drawn tens of millions of viewers, the sparse data available suggests traffic on metaverses as Decentraland lags far behind that of established social media sites like Facebook and Instagram. Ultimately the value of the land investments depends on whether people start flocking to these sites.
Luxury brands are already venturing into the metaverse — a Gucci handbag sold on the Roblox platform in May for more than the real version — and Kiguel hopes Fashion Street will become a shopping destination akin to New York’s Fifth Avenue.