The retailers setting up shop in the metaverse

Image source, Token.com

The three most important things to consider when buying a house are location, location, and location.

The virtual universe that some are hailing as the future of the internet, the so-called metaverse, seems to have the same motto.

This is an online space where cartoon-like 3D representations of ourselves can walk around and talk to other people.

It can be accessed by wearing a set of virtual reality goggles.

Image source, Getty Images

The company that used to be known as Facebook changed its name to Meta because it believes in the future of the internet. Many of us will work, play and shop in the metaverse, according to Meta and its boss. Ouravatar will.

A growing number of companies are buying up space in the metaverse so that they can open shop there. HSBC and JP Morgan are just two of the firms that are included in this list.

What location do businesses choose? The most popular worlds within the metaverse include The Sandbox, Decentraland, and Somnium Space.

Retailers and other investors are having to gamble on which of these will become the dominant force in the metaverse. The other worlds may disappear into obscurity.

Firms have to try to pick what will be the most popular areas.

Kiguel is a Canadian businessman. He bought a piece of space in Decentraland's dedicated area for fashion retail last year, spending more than two million dollars in digital currency.

Mr Kiguel plans to rent out his space to fashion firms and hold a fashion show.

In a metaverse clothing shop, you can buy items for yourself in the real world and send them to your friends in the real world. Alternatively, you could buy a new item of clothing for your character.

Not all metaverse worlds will succeed according to Mr. Kiguel. I remember the early days of social media. Similar to social media, the metaverse space will have some big winners.

Image source, Tokens.com

Adrian Cheng is from Hong Kong. An area in the metaverse world has been purchased by the boss of property and retail group K11.

He wants to create a pavilion so entrepreneurs can showcase their real-life success stories.

Animoca Brands is a Hong Kong based company. The network effect is what makes a location powerful.

He means how busy it is and how busy it can get. The more people use something, the more it's worth.

Image source, Adrian Cheng

What do you get for buying an area in the metaverse?

Each plot at The Sandbox is equivalent to 96m x 96m and has a height of 128m. You can form an "estate" by buying just one or many.

Depending on whether or not they are in a popular area, the prices are vastly different. The current average price for a Sandbox land is $2,300, but late last year someone was reported to have spent $450,000 for an estate next to a mansion. The cost of each land was said to be much higher than the size of the plot.

Image source, Everyrealm

There may be financial casualties if the metaverse is a gold rush.

Virtual real estate and other metaverse assets are in a speculative bubble. When speculative economics arise in a space, they tend to drive valuation and interest until the bubble burst.

Image source, Tokens.com

Prof Robert Stone is the chair of interactive multimedia systems at the University ofBirmingham.

"Firms can only be confident about the location of their purchase, and that location's future value to the activities they intend to pursue, and the clients they intend to attract, if they perform adequate research in the first place," he said.

Buying virtual real estate on spec is a sure fire route to disappointment and wasted budgets. Mistakes can be costly as the market is largely unregulated.

Image source, Everyrealm

Prof Stone wondered how long most people would be prepared to wear virtual reality goggles. He wants to know how long it will take for people to stay in the metaverse. Will the health and safety issues associated with Virtual Reality Wearables damage the metaverse's reputation?

New Tech Economy explores how technological innovation will shape the new economy.

The director of marketing at Everyrealm is optimistic. She says that the metaverse is a place where retailers can create experiences and be creative.

The winning metaverses will contain a lot of what companies offer in the real world. The same things capitalists build in every marketplace will be built by them.