The Metaverse: What It Means, Where It Could Go, And Why Sotheby's Is Scooping Up Virtual Real Estate
The “Metaverse” today, is not much more than marketing buzz word. The tech world is betting that the future will embrace this concept and it will upend how we interact with people and how we shop online. Facebook recently rebranded and appropriated “Meta Platforms” as their new Holding Company name, hoping to act first and own the concept of the “Metaverse,” and eventually, retain market share of users and developers that are fragmenting into new online communities. My guess is that Meta is anticipating that b2b applications will proliferate in a virtual environment- meetings, events etc. If engineers could be 5% more successful with a “virtual office” in the Metaverse, companies might subsidize the hardware costs for their remote employees, much like some companies subsidize laptops today. By becoming “Meta,” they wanted to be first to market with this branding and curb some of the inevitable user fragmentation that will emerge from NFT Communities that may crop up, and other Metaverses that threaten their current business model of “connecting the world” like Sandbox, Decentraland, Upland and others.
For now, this is all confusing but the transformation away from lackluster 2 dimensional online communities like FB, Instagram and TiKTok that orient you around a new feed / thread, will all eventually be replaced with a more engaging user interface. Several “Metaverse” communities will emerge. Some for social applications, some for commerce and some for B2B use cases. It looks like Facebook’s (or Meta) will be one of them, and their primary vision appears to be for VR, while other Metaverses are primarily outside of VR, for now at least. What Meta as an organization lacks today is “trust” amongst the majority of their user base, and so decentralized communities (Metaverses) that are emerging with NFT projects like bored Ape Yacht Club and Cryptopunks, and Centralized communities like Roblox, Upland… all pose a threat to Facebook.
What is the “Metaverse” and why will it be relevant? Meta wasn’t the first Metaverse concept. Pokemon Go was technically a “Metaverse.” A “Metaverse” is really just a unique online spacial environment that can use VR, AR or neither to enhance a user experience in a “virtual world.” Microsoft has also suggested that the Metaverse will be a place to do work and collaborate better as remote work becomes more mainstream. When you incorporate web3 concepts, these concepts get more interesting. Let’s look at Upland’s Metaverse, one I am fascinated by at the moment, because it’s actually mapped to the real world, unlike others that are centered around fictional gaming environments. Today, Upland allows you to buy “virtual property.” There are many headlines, mostly condescending, highlighting people who’ve paid crazy amounts of money to buy “property” online in the Metaverse.
(A user interface in Upland).
In the early days of the internet, a hand full of folks were buying domain names and people were wondering why they would pay $10 or more for a website address when back then, the internet was a place that few understood and the utility value of the internet itself was still unknown to most. Jump to 2007, and VacationRentals.com was purchased from a private owner for $35,000,000. More recently the domain Cars.com sold for $872,000,000. Just the domain address.
The future of the consumer-facing Metaverse(s) is one where you (the user) could own digital “space” or “real estate” within an online community, and you could have virtual events in those spaces, have gallery showings for your NFTs and digital art, meet and interact with friends, build online communities and even engage in commerce. This could be the next wave of the internet. It sounds familiar- we can do all this today on websites or social networks, but the interface in which we interact will all be different in the coming years. Those who own “virtual property” in these environments can flip them today, but, in the coming years you might be able to monetize them from web traffic much like you can do with a domain property today, but with potentially many more useful attributes.
Upland recently raised $18M at a $300M valuation, to accelerate user growth. Today, Sotheby’s owns nearly half a million dollars in virtual property on Upland, looking to buy the best spaces and environments that are mapped to real property in places like San Francisco, Chicago and New York. They’re anticipating a shift in the internet as well, to a more gamified user interface that people will prefer in the future.
If you want to buy property in Upland, be careful, it’s a high risk asset class, but with a potential upside as well. Buying one of these assets is actually a NFT (or non-fungible token). As you purchase a property from Upland it is minted on the blockchain and you are credited with digital ownership. Likewise, if you sell that NFT to someone else, ownership is then changed digitally on the blockchain. The value of Upland assets (virtual property here) will greatly increase if Upland continues to increase their user base. A growing user base in a Metaverse is certainly valuable, like web traffic is today. If several hundred people per day could visit your online gallery, or your shop in a given Metaverse that will have X value to the owner of that property. Today, Upland is simple a virtual real estate “game.” You can buy virtual homes, virtual businesses and even museums. You can build structures on those properties, and also flip and sell them to other Upland users. But, if the future pans out for Upland and their founders’ vision, it could soon become a place where people go to for unique online events and interactions within more customized environments. Where virtual properties are owned by the users and can host spaces where you can display any digital art you own, or music you like. You’ll be able to “decorate” and customize your space and show them off or monetize them in unique ways. Upland (and other Metaverses) will also be a place to do commerce- buying and selling goods and engaging with customers. Metaverses will be places to explore and discover, much like the internet today but with a more interactive and interesting facelift. Sotheby’s is particularly focused on buying museums in Upland, but they are also buying many types of other properties that they anticipate could increase in value as Upland continues to see impressive user growth (today they have over 150,000 active users).