Responses were mixed. While many applauded, others ridiculed our purchase. One well-known financier tweeted that our purchase made the tulip bubble of the 17th century look like investing in Berkshire Hathaway.
The Metaverse isn’t a new concept. The term was first coined in Neal Stephenson’s 1992 book, Snow Crash. A Metaverse is a 3D online virtual world where people gather to socialize, play and consume goods, all through an avatar on their computers. Metaverses are meant to replicate real-life experiences, but online. There have been many iterations of Metaverses through the years such as the 2003 computer game “Second Life.” Video games like “The Sims,” “Roblox,” and “Minecraft” can all be considered examples of Metaverse that are popular with kids.
But today’s “Metaverse” isn’t just popular with children. People are spending real money to own virtual assets that can be worn, displayed, stored, or sold. Luxury brands like Gucci, Balenciaga, and Jimmy Choo have fled to NFTs, alongside streetwear brands like Adidas and Nike. Artists like Ariana Grande and DeadMau5 are playing concerts in virtual venues. And yes, people are even buying virtual real estate for which we paid the equivalent of $2.6 million for the largest estate of land in Decentraland’s tony Fashion District, made up of 116 parcels or over 300,000 square feet of prime virtual space.
So, why did we do it?
In short: To ignore the Metaverse is akin to ignoring the value of the internet to your business. The Metaverse will be a trillion-dollar market very quickly. Mark Zuckerberg sees this and is betting on it through the largest rebrand in history by transforming Facebook to Meta. As more people congregate in these environments, more advertisers, retailers, and brands want to establish their presence to access these users. In the same way that every corporation had to develop a social media strategy several years ago, all corporations will need to have a Metaverse strategy within the next 24 months. Not only does the Metaverse represent a new revenue stream as e-commerce can be executed within Metaverses, but it’s an opportunity to build brand loyalty amongst existing followers, all while introducing the brand to a new, younger generation. Metaverses are created to replicate what a physical city would look like and how it would operate: with a downtown core, a fashion district, a museum district, and club districts where people attend virtual bars to listen to the top DJs in the world perform live. Like a real city, you can purchase land in the Metaverse. Think of this as a more elaborate version the board game Monopoly.
Our vision is to transform the estate we purchased into a one-stop-shop for consumers, becoming the 5th Avenue or Rodeo Drive of the Metaverse, where consumers can browse various brands and retailers can access visitor traffic. My bet is that as the fashion world moves deeper into the Metaverse and that the land we own will appreciate significantly in value because it’s one-of-a-kind in the busy fashion district. Our company is contributing to how the Metaverse will look and operate. We are a landlord and developer of the virtual world. Through blockchain technology, you can also build on Metaverse land and create structures that people will visit and transact within online. Each land parcel is unique because it has a different location. Parcels near the busy downtown areas are more valuable than the ones in the suburbs. High-traffic areas are highly sought after to hold events, post assets are also authenticated using block-chain technology, which allows for unique assets to grow in value and be resold — a very exciting advancement from previous attempts to popularize Metaverses like Second Life.
Our property is ready to host fashion shows and brands are already retailing digital merchandise in the Metaverse. Decentraland’s Metaverse Fashion Week was home to Dolce & Gabbana, Elie Saab, Jacob & Co fashion houses among others and hosted the closing after party with Grimes as the headlining act. Metaverse users want to dress their avatars in clothing that establishes social status, just like in the physical world. You can even now buy limited edition digital Birkin bags as NFTs. What we purchased is highly valuable. It is scarce and can be used to generate rental revenue. Our purchase is the equivalent of buying Boardwalk or Park Place, some of the most valuable properties in the board game Monopoly, and its adjacent properties. Just like you can do in Monopoly, we now own and control a valuable piece of real estate in a desired part of the Metaverse that we can rent out to generate revenue.
If you could buy land in Manhattan 250 years ago as the city was being developed, would you? This is a similar bet. That’s why investors are scrambling to buy up Metaverse real estate. We know that the benefits of owning digital real estate are very similar to the benefits of owning physical real estate, and today, even more lucrative as we are in the early days of Metaverse development. Just like in Monopoly, the players with the most property will generate the most income.
