This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.
It seems like talk of the metaverse is everywhere these days, with news of novel and exciting planned additions to this collection of virtual 3D worlds cropping up constantly. It's a wild time to be an investor, to be sure. Based on the hype, investing in metaverse spaces seems like the next big thing for anyone with a few spare dollars lying around.
Although it's easy to buy metaverse real estate, it's not the right choice for just anyone. Not only is it a very risky investment, there are still a lot of unknowns. Even so, there are some reasons to jump into this space as an investor, including those outlined below.
You have a brand or business to promote
If you have a company or brand that appeals to Generation Z (those people between 10 and 25 years of age), the metaverse could be a great place to connect with them. A lot of the members of this generation are already in the workforce, and they're familiar with digital spaces that look and behave like popular metaverse platforms, including Decentraland and The Sandbox. Gen Z already has an estimated collective buying power of about $150 billion.
Because these people are largely less interested in older social media platforms, they tend to find themselves interacting with each other on platforms that inhabit the metaverse, or those that are metaverse-like. This is a version of the internet that Gen Z knows well and is comfortable with, and a good advertiser takes their business where their customers are. After all, Gen Z is the future of the internet, and what they imagine it to be will necessarily become reality as they come of age.
You want to help other companies find a foothold in the metaverse
If you already have a pretty good idea of how the metaverse will work and what kinds of projects will make sense in the space, then it might be a great idea to invest in metaverse real estate with the intention of becoming either a developer or a landlord.
Many companies are trying to find a way to get into the metaverse, but don't really know what to do first. Metaverse developers can help them take a project from the idea phase through execution, often with many partners that help add expertise along the way. They may advise on where projects should be built, or when they should launch (such as during Fashion Week in Decentraland), and they often acquire property to develop before reselling it.
Metaverse landlords, on the other hand, know what they want to build and to whom they want to lease those spaces. They seek out businesses and brands that want a metaverse presence, but aren't sure they're ready to commit fully to purchasing virtual land. Metaverse landlords stand to generate long-term rental income if they design appealing structures in great locations.
You want to build something for yourself
One type of metaverse real estate investor that we rarely discuss is the kind who is curious about this bold new world and also very tech-forward. They probably are already dabbling in cryptocurrencies, and likely have been playing around in metaverse spaces, but haven't yet set down roots. For individuals of this type, buying a piece of digital land could be more an act of self-expression than an act of investment.
However, simply by holding that virtual property -- even if it is, for now, just an empty lot or an art installation -- they become investors, too. According to a Citi GPS report, by the end of this decade, the metaverse can be expected to expand to as many as 5 billion users and a total addressable market of up to $13 trillion. The likely end result of such expansion is that many parcels of digital land will grow in value even if they've only been used for their owners' enjoyment. As long as the platform you choose has a healthy community and is driven by a sense of collaboration, people will continue to make it their digital home.
The metaverse isn't for every investor, but many belong there
Although investing in metaverse real estate can seem like a pretty dodgy experiment, there is mounting evidence that this alternate reality is here to stay. With a limited supply of building lots and a potentially unlimited number of users, the value of real estate on any metaverse platform will be driven, in part, by its popularity. It's the same for physical land in any neighborhood in any city or town.
This early in the growth of what is expected to become the metaverse, there's no way to really know which metaverse platforms will hit and which will shrink into obscurity, but if you're the betting type, or you have a business plan in mind that would benefit from a metaverse presence, you definitely should give it a try. Patience is key, because it will take time (and effort) for these platforms to mature. But there's only so much downside versus enormous upside to being an early adopter of technology that has the potential to become a whole new way of connecting people around the globe.
This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.
