Why Invest in the Metaverse?
From digital meetings to virtual field trips, the metaverse could be the next stage of a more digitally connected world.
The term metaverse has had a short but storied history, gaining traction in 2021, when everyone from celebrities to big brands wanted to have a presence in the metaverse. Things went so far that Facebook changed its name to Meta signaling its commitment to creating a metaverse. But through all of the hype, there is real potential for the growth of this digital landscape.
First, what is the metaverse?
It’s important to note that the metaverse is a growing number of multiple platforms. And these platforms are working to shift the balance of power away from centralized platforms towards users and creators, building:
- An evolving decentralized network of virtual reality experiences, bringing many aspects of our physical world into the digital world.
- E-commerce within these new digital worlds includes property, gaming, entertainment, social events, education, and more. (Imagine going to a digital concert of your favorite band, buying digital art, or taking a field trip across the world in a few seconds.)
Why invest in the metaverse?
The metaverse is very early, so there are risks to consider as it is unknown territory. But the general investing thesis for the metaverse focuses on its ability to reshape how we live our digital lives:
- From digital meetings to virtual field trips, the metaverse could be the next stage of a more digitally connected world.
- We are seeing businesses—including social media, entertainment, and clothing companies—testing new ways to engage with consumers in the metaverse.
What gives metaverse property its value?
The success of a virtual world, and the property within, largely depends on a network effect that drives more participants into that virtual world. Similar to the real world, the value of a property in the metaverse may be driven by what and who the property is located near, but even more specifically, the value may largely be determined by the activities the property is near (think digital concerts, shopping malls, etc).