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What's the Deal With the Metaverse?

Written by Monica Savaglia
Posted December 7, 2021

Today, I want to take some time to talk about a recent trend that has been getting some traction in the tech world. 

Some of you probably just recently became familiar with the term “metaverse” when Facebook rebranded itself a few months back. The company now goes by Meta Platforms (NASDAQ: FB) instead of Facebook. This change for the tech giant came at a time when the company was under pressure and scrutiny about social media and the effect that Facebook has had on society and the mental health of its users. 

To me, it seemed like a way for Facebook to distract a bit from the bad publicity — rebranding and introducing this new business concept and trend that the company is teasing as being the next big thing in technology. Well, it's even bigger than just the next big thing. In fact, it’s going to be a major aspect of our future. 

If we thought our lives were entangled in the digital world now, it’s expected they'll be even more so in the future. Meta is envisioning that we will be doing everything in the metaverse rather than the physical world. That’s a pretty bold claim. But it wouldn’t be the first time that this company completely changed our lives and how we interact with other people.

While this virtual universe is probably in its very early stages and there’s a lot more to figure out, there are a lot of people who see a very lucrative future for the metaverse.

The metaverse will support an online 3D virtual environment through personal computing and augmented reality. It’ll be a virtual world that offers immersive experiences where people throughout the world can meet, play, watch, and trade online using the internet of things. 

Metaverse Real Estate Heats Up

Founder and CEO of Ark Invest Cathie Wood in a recent interview discussed the metaverse and mentioned how it’s expected to influence the economy by being a multi-trillion-dollar opportunity. She also mentioned:

It’s a big idea that will probably infiltrate — just like technology is, anyway — every sector in ways that we cannot even imagine right now.

This rush into the metaverse future also has some investors betting big on digital real estate. When I first read some headlines discussing this concept I was a little perplexed by the idea. Who in their right mind would pay millions for digital real estate?

But last week, a piece of digital real estate owned by video game holding company Atari SA was sold for $4.3 million to metaverse real estate investor Republic Realm. 

"According to the crypto data site Dapp, land worth more than $100 million has been sold in the past week across four of the largest current metaverse sites, The Sandbox, Decentraland, CryptoVoxels, and Somnium Space," Agence France-Presse reports.

These investors most likely believe buying real estate in this virtual world where people will soon spend most of their time will be an excellent way to advertise to consumers or to strike up other deals with companies that want a piece of that prime real estate. 

Advertisements will always be an important source of income for businesses. Just like what social media has become today with its advertisements, the metaverse could easily become something similar — or even greater.

In a sense, the metaverse could be like combining both real-world and digital concepts of advertising. The ads could be more interactive or discreet. Brands could pay a lot of money just to have their advertisements in populated areas within the metaverse. With advertising, more eyes on an advertisement potentially means more sales for that company.

Everyone Wants a Piece of the Metaverse

Back in May, luxury brand Gucci ventured into metaverse and sold a Gucci handbag on the Roblox platform for more money than the real version, which I was a little shocked about. But maybe this is the direction that this new universe is heading in. And if not, it’s definitely bringing attention to the metaverse and the potential benefits it could bring for the advertisers and companies that will make the technology required to fully emerge yourself into this digital world. 

The metaverse is expected to grow strong within the next seven years. A report from Vantage Market Research indicates that the metaverse market size is expected to reach $814 billion by 2028, which represents a forecast CAGR of 43.8% during this period. 

While this new world isn’t going to be for everyone, it’ll most likely attract the attention of the younger generations who grew up accustomed to technology and applications that already slightly blurred the lines between the digital and real worlds. It’ll be an easy transition for these younger generations when it comes to the metaverse. It’ll be more exciting because you’ll be able to interact directly with other users instead of just being an observer like with social media applications.

While everything isn’t exactly clear what this metaverse will grow into. We do know it’s just the beginning and that makes sense as to why some investors are getting in where they can because who doesn’t love having the bragging rights of knowing about something before everyone else. And not only that, being able to profit from that instinct.

If you want to learn more about the type of technology that will be involved in creating and building the metaverse, I suggest reading this report to better understand one of the technologies involved that are expected to carry this metaverse into the future.

Until next time,

Monica Savaglia Signature Park Avenue Digest

Monica Savaglia

Monica Savaglia is Wealth Daily’s IPO specialist. With passion and knowledge, she wants to open up the world of IPOs and their long-term potential to everyday investors. She does this through her newsletter IPO Authority, a one-stop resource for everything IPO. She also contributes regularly to the Wealth Daily e-letter. To learn more about Monica, click here.

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