The growth of the metaverse continues as large companies place monetary bets and file trademarks for digital worlds. Here is a look at what the metaverse could mean economically.
What Happened: A new 18-page report called “Opportunities in the metaverse” from JPMorgan Chase & Co JPM lays out plans for the metaverse to be a trillion dollar opportunity.
In the report, JPMorgan calls the economics of the metaverse “metanomics,” a phrase used for the opportunities in the market areas of digital worlds.
“Imagine you have an online avatar, and you want to change what it/you are wearing, you will be able to buy limited-edition, digitally branded clothing that you pick after browsing a virtual showroom,” the report says.
The report also highlights how small businesses can be started, art galleries opened, and private clubs launched as well. All of these are new market opportunities created by the metaverse.
JPMorgan said the term metanomics isn’t new, and the concept is even older.
Second Life, a game released in 2003, was among the first to demonstrate the market opportunity of the metaverse. Cornell professor Rob Bloomfield used the phrase when teaching a course on the game.
A big difference between metanomics back then and now is the growth of Web 3.0 and the tokenization of digital assets, according to the report.
“You can even own the land the house is built on. Ethereum-based platforms like Decentraland, for example, are already selling virtual plots that people can develop. Virtual real estate is a growing market,” JPMorgan notes.
Land prices for virtual land doubled in the six-month period of June 2021 to December 2021 according to the report.
Related Link: 12 Key Differences Between Web 2.0 And Web 3.0: Virtual Worlds, Play To Earn Games, Digital Tokens, NFTs And More
Why It’s Important: The report cites previous digital world games including Roblox Corp RBLX, The Sims from Electronic Arts Inc EA, World of Warcraft from Activision Blizzard Inc ATVI and Minecraft, now owned by Microsoft Corporation MSFT.
Metanomics could see growth across several sectors, parallel to the real world. This could include credit, mortgages and rental agreements. Digital clothing could also be used as collateral to sign a mortgage, the report said.
The growth of NFTs and digital ownership could be extended to other sectors within the metaverse as well.
There has been a divide for many on if the metaverse is a real growth opportunity or is a potential bubble. Ark Funds CEO Cathie Wood previously called the metaverse a multitrillion dollar opportunity, while Tesla Inc TSLA CEO Elon Musk called the metaverse a “marketing buzzword.”
The report from JPMorgan is one of the first from a major financial institution to highlight the vision of a large marketplace for the buying and selling of virtual goods and the potential trillion dollar opportunity.
Photo: Courtesy Prachatai on Flickr
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