Myth-Busting The Metaverse: The New Gold Rush? Or Just a Virtual Ghost Town?

Myth-Busting The Metaverse: The New Gold Rush? Or Just a Virtual Ghost Town?

Privacy issues, lack of legislation and general scepticism didn’t dissuade Bloomingdale’s from partaking in the metaphorical mass migration into the metaverse. The luxury department store celebrated its 150th anniversary by introducing a virtual shop where customers can deck out their avatar in this season’s hologram of high fashion. Other brands, such as Gucci, Nike and Burberry, have also made tracks to the metaverse. These upscale retailers are counting on a surge of e-commerce activity from the digital wranglers found in Gen Z and Gen Alpha. The rationale is a familiar one: companies looking to ‘further enhance the customer experience’ through ‘carefully curated’ goods and services can ‘move the planet a little closer to the future’. Quite. 

Verdantix has discerned a few positive use cases amidst the hype, but most are the natural evolution of broadly based digitization programmes. Accenture uses the metaverse to onboard employees; host meetings and provide immersive learning. CBRE has also tapped the metaverse for employee training, and is considering a virtual office to experiment with hybrid working models. And the BMW Group used NVIDIA’s Omniverse platform to create a digital twin to design, plan and operate its future factories virtually before constructing them physically; building on outcomes typically achieved with a BIM model. 

Some of the big corporate names are laying stakes in the metaverse, but their offerings are more tumbleweed than technology frontier. PwC purchased real estate in The Sandbox for $10,000 (dollar-wise, a drop in the bucket) as did HSBC and Samsung, but haven’t done anything with their plots yet. And JP Morgan’s saloon-like Onyx lounge features a roaming tiger and a picture of the CEO, but that’s it. People don’t seem to like hanging out in banks in the real world so what makes it more attractive in the metaverse?

Even in the virtual world, location matters. Snoop Dogg bought a digital mansion in 2021 and the ‘property’ next door was purchased for $450,000. Say what? ‘Real estate’ sales in the two largest virtual worlds, The Sandbox and Decentraland, neared $500 million over 86,000 property transactions. And prices keep rising. 

As IRL, the action is happening amongst the computer cowboys, the identity hackers and the developing darkverse (a deep web brought to the metaverse for criminal activities). Money laundering and sexual harassment are amongst the crimes committed to date in the realm. Its inaccessibility to law enforcement agencies will ensure the growth of cyber brothels, drug marketing and illicit activities which lurk amongst the flashy virtual storefronts of deluxe brands. There’s a lot of crypto, of course. Metaverse land parcels exist as non-fungible tokens (NFTs). A potential buyer chooses their plot and funds the relevant crypto wallet, then they can part with their coin. 

Verdantix advises CRE investors looking to prospect for riches to use this digital land as an entertainment source rather than a reliable income stream. It’s a gambler’s bet right now as a successful metaverse strategy has yet to be determined, despite the wagon train of global powerhouses into the space. Mainstream adoption and ownership of property rights remain questionable. Tangible and consistent ROI has yet to be proven. Like any other gold rush, there’s a race to claim some space and find a fortune. It’s a free-for-all attracting all types, and too soon to tell if it’s going to be a boom or a bust.  

Read our related research for more insights on the opportunities for real estate executives in the metaverse: Market Insight: Making Sense of the Metaverse for Real Estate Executives.