23 May, 2022.
PricewaterhouseCoopers (PwC), one of the Big4 accounting firms, recently acquired a piece of ‘real’ estate. And it caught the attention of netizens. Soon this was a hashtag on social media platforms. For one, it was this large multinational that entered this business vertical, and two, the surprised expressions of the technophobics and the luddites about what has an accounting firm has got to do with buying real estate, that too ‘here’..!! Wait, have I been using the word “real” here? Is that a right usage? Well, I almost forgot to mention, the real estate investment made by PwC is in THE METAVERSE…!! Now, ‘that’ must take sometime to digest, if one hasn’t already googled.
What is Metaverse, and most importantly Where is Metaverse?
If you have played any car racing videogame/mobile game/PS/Xbox games, you would know that as a first step, you need to select the terrain (out of some 20-30 choices) to play your race. Once you start the race, all your laps run though a backdrop of a colourful set of landscape, forest, farmlands, desert or an urban space with bridges, malls, housing colonies and office spaces. Now imagine this, that is a world where you can actually enter, live, experience and interact with known and unknown friends (actually Avatars of friends) there. Imagine you are driving the car yourself, or maybe you are in the stands there watching your favourite F1 racer in action. Metaverse is this virtual world. Its here now, in its fully developed form, thanks to the BigTech firms like Meta (formerly known as Facebook). Metaverse is virtual by the ‘structure’ of its existence, real by its ‘presence’. An economy being built over it. There is going to be a market system; self-regulating tech-innovations and billions & trillions of dollars invested (or should I say bitcoins?).
Now, where is Metaverse? Remember the movie Avatar. Recall how Jake Sully, gets into a capsule, will go to a dream state and explore the pandora world. Metaverse is an alternative world which is present as a layer wherever we are, instead of any imaginable physical location. You are mentally and from your visibility perspective transcended to a locale of your choice and you get to live there till you want (or till your physical body here gets hungry again…!!).
How is Real Estate created in Metaverse?
The word Metaverse, even though was made famous by Zuckerberg in the rebranding speech of Facebook into Meta, it was referred to first by Neal Stephens and his novel Snow Crash (1992). This imagination is said to be the base for many multiplayer online games (MMOGs). Even though it seems like, the available space for creation of a virtual world, (as it is virtual) is unlimited, specific protometaverses that get created by some companies, where they can invite people’s avatars to visit will have predefined acreage. These can be illusioned as digital islands, owned by a person or an entity and give any experience they’d like to give.
For instance, the PwC’s acquisition of virtual land space in Metaverse, can be used by them to set up a virtual office space, where they will host their clients (avatars of client’s representatives) and can carry on the business consulting meetings, exchange documents, or even shake hands after a successful deal…!! This office will have a virtual address, a specific virtual location, hence, this land is not unlimited in its true sense, for the buyer/user like PwC. Imagine a B-School like ISME, owns a campus in Metaverse, and students from around the world attend classes and get graduated, with the attendance requirement met as per university norms and satisfying immersive interaction of student-faculty in the collegiate environment.
Whereas, the theoretical space is still unlimited in the hands of platform host (Meta) as its revenue model is to generate revenue by selling or even renting out this. Thus, this virtual space becomes a commodity. They are pricing it. Over a period of time, like in the physical world, owners start trading such virtual localities with each other and a secondary market gets created. Thus, the prices will start increasing (assuming the locational advantages convert into demand, like in physical world). In other words, Metaverse company creates a Virtual Reality Space and puts it up for sale or lease. Those who wish to operate or trade in such spaces, (similar to real estate developers in physical world), will buy or rent such spaces from Metaverse for a price. In the words of Stephenson – “They can build buildings, parks, signs, as well as things that do not exist in Reality, such as vast hovering overhead light shows, special neighbourhoods where the rules of three-dimensional spacetime are ignored, and free-combat zones where people can go to kill each other.”
What kinds of Lands are Available in Metaverse?
Metaverse Property is one of the virtual real estate companies, facilitating such land transactions in Metaverse. They have developed land spaces for taking up by individuals, enterprises and institutions. DECENTRALAND is a virtual reality platform powered by the Etherium blockchain. Blockchain is the technology to facilitate transactions. The cryptocurrencies currently are using the blockchain. One can buy land here in the given layout (refer the image) and create spaces for conductin conferences, commercial spaces, art galleries, family homes, hangout spots etc. They have created five districts and one can buy land of any dimension anywhere in these layouts. SANDBOX is another blockchain based platform, where creators can monetise voxel asset (Voxel is a word used to refer to 3D experience, a combination of words volume and pixel). There are gaming spaces available for buying or renting. Similarly, they have SOMNIUM, CRYPTOVOXELS and UPLAND. They have created properties facing waterfronts and roadside properties.
A relatively interesting aspect of these products are the dimensions given for these properties. The properties are explained in terms of not just in Square Meters, but also in terms of height and depth. Customisability, scalability, interoperability, synchronisability, number of user accessibility, degree to which the individual’s presence can be experienced and data gathering are few of the factors, a buyer in these lands will use to evaluate these properties.
What technologies are behind this?
Metaverse is an extended version of what was being referred to as Web 3.0 since a decade or so. Currently, there are possibilities to connect even millions of users at a time virtually. There was a VR concert featuring Travis Scott being teleported to more than 12 million logged in players in April 2020. ABCDs of the technology world (Artificial Intelligence, Blockchain, Cloud and Data) are currently present in different user applications. There are robots, there are virtual assistants, there are there are cryptocurrencies, there are data driven decision systems already in place, with proven track records. The Internet of Things (IoT) has almost reached every workplace and household. We all have our smartphones, alexas, siris seeped into our daily lives already. The 5G or the LiFi enabled devices are already in place. 5G spectrums are being auctioned already and expected to grow at a CAGR of nearly 50% over the next 10 years. NFT (Non-fungible Token) creation is a technology that gets used to create ownership titles on the virtual land spaces that’ll be owned in Metaverse. NFTs are already in place with various artistic commodities are now being traded in the market via NFTs.
Thus, there is no new technology being introduced here, instead an integration of all these technologies to create a market place is what defines the metaverse. Meta is already fronting the production of VR devices to enable access to this world. Cryptography based currencies using Blockchain, like MANA (Ether based) are already being floated in virtual land space like DECTRALAND.
Witness the unfolding
Justin Beiber’s first Metaverse concert proved to be amazingly successful. Gumber company organised India’s first Metaverse concert on Somnium Space with Sparsh Dangwal. Companies like PwC and many other entities from other industries are buying virtual land spaces already. More such platforms might get created over a period of time. Like what happened in the case of social media providers, mobile phone platform providers or the recent cryptocurrencies, a thousand virtual districts may get created. Over a period of time, few big player’s space gets the highest value in the market. Watch out for immersive entertainment events, conferences, classrooms and open market places. Watch out for another trading (or should I say gambling?) opportunity for cryptosepians (my word for those crazily excited traders in cryptocurrencies). Also watch out for the real estate of the real world get more and more unreal in the virtual world…!!!!
- Accounting Firms Scoop Up Virtual Land in the Metaverse. (n.d.). Retrieved from The Wall Street Journal.
- Metaverse Properties. (n.d.). Retrieved from https://metaverse.properties/
- Parcel. (n.d.). Retrieved from https://parcel.so/
- What India’s first Metaverse concert tells us about the future of virtual music events. (n.d.). The Indian Express.
- What Is the Metaverse: Where We Are and Where We’re Headed. (n.d.). Retrieved from Association for Talent Development.