One of the hottest topics of 2021 for public companies, cryptocurrency and NFTs is the metaverse. Here’s what industry experts and real estate experts see for the metaverse opportunity.
What Happened: Tesla Inc TSLA CEO Elon Musk said Monday that the metaverse is a “marketing buzzword” and less of a practical concept. The comments come after Musk tweeted a video of David Letterman criticizing the concept of the internet in 1995.
“I’m not suggesting web3 is real – seems more marketing buzzword than reality right now -just wondering what the future will be in 10, 20 or 30 years. 2051 sounds crazy futuristic!” Musk said.
Others see a brighter future for the metaverse, with virtual land sales hitting record amounts and industry size estimates in the trillions being tossed around.
Cathie Wood: The metaverse is in the early stages of development, according to Ark Investments CEO Cathie Wood.
“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,” Wood said.
Wood said the metaverse could be a multitrillion-dollar opportunity, a stark contrast from Musk saying the metaverse is a marketing buzzword.
Wood sees the metaverse going beyond gaming and consumer goods and being linked to more industries in the future.
“We’re going to have our digital twins and it’s going to enable a lot of fun and a lot of efficiencies.”
One example Wood gave was Trimble TRMB, a company that uses field data for industries like agriculture to create digital environments.
Other Experts: One company that could benefit from growth of the metaverse is Epic Games, a company partially owned by Tencent Holdings TCEHY.
“Over the coming decades, the metaverse has the potential to become a multitrillion-dollar part of the world economy,” Epic Games CEO Tim Sweeney said.
Another $1-trillion estimate came from cryptocurrency fund Grayscale, which is behind the popular Grayscale Bitcoin Trust GBTC.
“The market opportunity for bringing the Metaverse to life may be worth over $1 trillion in annual revenue and may compete with Web 2.0 companies worth $15 trillion in market value today,” a Grayscale report said in November.
Grayscale highlighted the name change by Facebook to Meta Platforms FB as a sign that companies are recognizing the value of the metaverse.
“This new paradigm allows user to own their digital assets as non-fungible tokens, trade them with others in the game … creating an entirely new free-market internet-native economy that can be monetized in the physical world.”
Related Link: Want To Own Land In The Metaverse? Record Sales Happening As Interest Picks Up
Virtual Land: The $1-trillion estimates for the metaverse have led to a spike in valuation and demand for virtual land. Virtual land leaders like The Sandbox and Decentraland have seen strong demand for land in their virtual worlds.
The valuation of the coins for The Sandbox SAND/USD and Decentraland MANA/USD are also up over 14,000% and 4,300% respectively.
Several companies are spending millions of dollars on virtual land transactions.
“We bought a city, or the equivalent. We paid so much for it because we want to do something big, something very immersive,” Republic Realm CEO Janine Yorio told Business Insider. Republic realm bought a 24 x 24 parcel recently.
Another company shelling out millions of dollars for virtual land is Metaverse Group. The company spent $2.4 million on Decentraland virtual land recently.
“We think the Fashion District purchase is like buying on Fifth Avenue back in the 1800s … or the creation of Rodeo Drive,” Metaverse Group CEO Lorne Sugarman told Insider.
The Sandbox has 166,464 parcels available, according to Metaverse Group, which could create limited supply and strong demand in the future.
“We want to buy land and build things on it. The only way the metaverse becomes interesting is if there are things to do and people to see and places to go when you get there.”
Cities and countries are also investing in virtual land, using the metaverse as a way to connect with its residents.
Benzinga's Take: Given the multiple trillion dollar estimates from some well-respected leaders, the metaverse opportunity could be in its early days.
The callout of the metaverse being a "marketing buzzword" by Musk could prove to be wrong and something he may have to reverse course on in the future.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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