Edition 1 | February 2022
Even if you live in a cave, you would not be able to miss the buzz around the metaverse. Termed as an $8 Tn opportunity, the metaverse holds the promise of altering our relationship with the internet. Yet, in the midst of this buzz, there is veritable skepticism and questions around what is the metaverse, how does it truly impact real estate, and how much of this is hype versus reality.
Over a series of articles, I will aim to dissect:
a) the current definition of the metaverse, with the caveat that it is an evolving one.
b) distill what it means for the real estate industry, with examples and current case studies.
c) highlight risks, enduring questions, and what lies in store for the intersection of the metaverse with the built world.
What is the Metaverse?
To begin with, Vishal Shah, VP of Metaverse at Meta states that the metaverse is “not a new internet, not a new set of protocols, not an entirely new foundation…” Instead, Vishal states that it is “a new way to experience the internet,” one that is more immersive, conversational, and at its heart, more humane.
Today, our engagement with the internet is limited to looking at a screen and primarily transacting with it. What the metaverse promises is a richer, more contextual medium to not just transact with the internet but converse and engage with participants within it. As Cathy Hackl says the metaverse, “in some ways is about the internet-breaking free from the rectangles in our hands, desks, and walls and being all around us.”
In its quest to help us ‘break free’ from how we experience the internet today, the metaverse relies on 2 core constituents today: avatars and virtual environments. Drawing its roots from Sanskrit, an avatar in the context of the metaverse represents a manifestation of one’s physical form in the virtual world. Further, as Matthew Ball alludes to when avatars become more realistic and human-like, their inherent need to embody identity and self-expression, much like their counterparts in the physical world, intensifies.
Concurrently, virtual environments enable the maturation of our avatars by lending utility to them in the first place. Such environments could either be a replica of the physical world or a completely new creation built on virtual land parcels; they could be low or high fidelity (think: VR headsets) shaped for commerce, exclusivity, or community; and they could either exist on Decantraland or Roblox, or a new emerging metaverse — but in any permutation, they proffer a new and arguably richer dimension for avatars to interact with the internet, and with each other.
Though still early days, one can also deduce how avatars and virtual environments feed off each other. As avatars become more life-like, the need for richer virtual environments increases, which further provides an impetus for avatars to do more in the digital world, making them more life-like. This then posits a natural question: will virtual worlds eventually replace the physical world?
To be sure, the metaverse neither promises nor is capable of substituting physical experiences and in-person social interactions, and any such claims would be an exaggeration. Instead, what the metaverse could offer is a more authentic and immersive experience on the internet, which makes them life-like in nature, and is a step-change from how we interact on our screens today.
In the next article in this series, I will write about how the metaverse could be especially powerful for the real estate industry as it relates to luxury retail, hospitality, concerts and conference venues, residential brokerages, and the future of work. Across these asset classes, we anticipate the emergence of virtual experiences that create new revenue streams and build a connective tissue between the digital and physical worlds, driving higher engagement and customer loyalty. Stay tuned 🙂