Metaverse impact on physical real estate? How will the future of digital real estate change the asset class?
Serious question after doing tons of research this weekend on Decentraland and Sandbox. I want to pose this question taking viewpoint years down the road in the future:
Does anyone have any insight into how traditional real estate will be impacted once the Metaverse becomes mainstream?
We’re definitely becoming more of a virtual society and the costs of owning physical real estate is a burden compared to buying a plot in the Metaverse and earning passive income from renting a lot for events and advertisements etc.
It seems like many people in the future will congregate there since that will be the space that the younger generation will already be used to. If advertisers want to spend money on the Metaverse and you don’t need to spend tax, maintenance, or dealing with tenants, why wouldn’t this be an attractive investment play? What am I missing? Will physical real estate be less appealing in the future (10 years+ down the road)?
You can have as many meta sigma alpha verse plots as you like but I'd take a villa in the South of France over an internet plot any day of the week. In all seriousness the metaverse is the one of the more stupid ideas in recent history and is essentially the mid twenties rebellion of people who were told to go outside as children, even in commercial real estate I'd rather a data center etc. compatible facility than some video game token.
It's more about the potential cash flows that can be generated from the finite plots of land with marketing and leasing to other people. If millions of people are going to be inside the 'metaverse,' why not try and own a piece of the action for yield?
You would be fundamentally betting on the metaverse, I think there are considerably more tolerable options in real estate than it. Call me old fashioned but I am almost certain the metaverse in the sort of virtual world iteration is a bad joke but each to their own (not that I am imputing any perspectives unto you).
Why will the number of plots be limited? There's no technical reason that they need to be. The limit would have to be a design constraint imposed on a specific Metaverse application by its creators. And if the rents extracted by the creators of that application become significant enough, users will move to another one.
I used to think beanie babies were stupid until crypto and the metaverse came along and made them look AAA by comparison.
Question is hard to answer because we don’t know if 1) the metaverse is even going to succeed and even if yes 2) how it will be used.
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