For $1.4 million, you can buy 65 pieces of land inmetaverso. This is how much Philipp Plein, a Swiss fashion company, recently paid for this size of land on Decentraland, a virtual world where real estate can be purchased with cryptocurrency and developed to engage an audience of approximately 800,000 registered users.
Several brands are acquiring land there, as well as on competing platform The Sandbox, which is still in testing but already has over 500,000 registered cryptocurrency wallets and 12,000 unique land owners. Adidas, Atari, Care Bears, Samsung and Gucci are several of the marketers who have installment rights on these platforms.
As the metaverse takes shape, brands are eager to explore the commerce potential in virtual real estate, which is already being developed into stores and experiences by marketers looking to drive sales.
Meanwhile, agencies are buying land to expose clients to the metaverse ecosystem and its tradable assets, which mainly exist in theform of NFTsor non-fungible tokens.Mediahub has land in Decentraland, as well as Vice Media Group agency Virtue Worldwide; Media.Monks has a presence on multiple platforms; and Wunderman Thompson built an office in a lesser-known metaverse called the Odyssey.
Interest in virtual lands has even reached more buttoned-down brands such as JPMorgan Chase, which recently opened a lounge at Decentraland that features a roaming tiger and a portrait of CEO Jamie Dimon.
Buying real estate in the metaverse is a significantly different marketing opportunity than simply installing an activation in a virtual world. Activations, like abrand campaign on roblox, are intended for short-term engagement, similar to a pop-up store at a festival. Buying land, however, is a long-term investment for a lasting presence on a platform. Through these acquisitions, whose exorbitant prices reflect a need for serious commitment, brands seek to create iconic destinations for users.
Some brands have established real estate to build hype for future activations around NFTs and wearables that will be accessible on the platform. That was the case with Adidas, who secured at least a 12×12 share on The Sandbox for an undisclosed amount.
“Our acquisition of land on the platform is a way of expressing our excitement at the possibilities it offers,” an Adidas spokesperson said via email.
Others already have real plans in motion, like the Care Bears, who recreated their characters in The Sandbox as in-game assets in the form of NFTs, to be used by creators and featured in a larger Care Bear ecosystem.
“Ultimately, we also want to speak directly to our fanbase in the NFT space and have a destination for NFTs Care Bears,” Robert Prinzo, head of global licensing at Cloudco Entertainment, parent company of Care Bears, said in an email.
Overall, brands are betting on the commerce opportunities that are emerging in the metaverse. From NFT collectibles to digital wearables and large-scale monetized experiences, the potential for new sales channels is becoming increasingly difficult to ignore.
“If brands want to establish themselves and create and sell products, they need land,” said Benny So, head of communications at Metabrge, a metaverse retail store.
land for sale
Sandbox and Decentraland are the current heavyweights in the virtual land market. While Roblox has been the world’s most popular for marketers, with brands like Nike, Hyundai and Vans activating on the platform, it doesn’t exactly sell real estate because land isn’t in short supply. Instead, brands can sign up for free and build their experiences on an infinitely large map, and only when they start making money does Roblox start charging huge fees.
Sandbox and Decentraland are controlled by their user network, not the platforms themselves. Unlike Roblox, these worlds are linked to the Ethereum blockchain, transact using cryptocurrencies, trade digital assets in the form of NFTs, and offer land at premium prices. Only minor transaction fees are deducted to support the ongoing operation of the platform.
Other blockchain-based platforms are gaining traction, such as Cryptovoxels, a Minecraft-like metaverse, or Odyssey, which offers specific opportunities for business-to-business services, as in the case of Wunderman Thompson.
“Sandbox may be suitable for a [marca], Decentraland may be a good fit for another,” said Michael Litman, creative strategy lead at Media.Monks. “They really represent themselves as new channels for brand engagement and consumer engagement.”
Sandbox and Decentraland sell land in advance, through marketplaces, which are formatted as NFTs and must be purchased using your in-game cryptocurrencies.
Brands can also buy real estate on secondary markets like OpenSea, although this requires extra caution thanks to therampant fraudthat exist in these networks. A recent OpenSea phishing scam, for example, stole $1.7 million worth of NFTs from unwitting owners, including Decentraland tokens.
Finally, some brands can acquire land by partnering with the platform itself and establishing a licensing agreement, whereby land can be offered at a discount to bring mainstream development to the platform.
“If you’re a big brand, say, like Nike, Sandbox will likely be more willing to have an open relationship with that type of company,” said Mason Nystrom, research analyst at cryptocurrency research firm Messari.
Care Bears, for example, partnered with The Sandbox in September 2020, well before NFT and metaverse marketing became more popular. The initial collaboration gave Care Bears a virtual space to build a 3D version of the Care-a-Lot kingdom, where bears are said to live.
While the use cases for both virtual worlds are still being recognized, Sandbox has so far seen more interest from brands – such as Gucci, Adidas and Atari – while Decentraland has seen more interest from companies, coders and tech developers, he said. Average. Monk’s Litman.
The split came about because of Sandbox’s video game sensation, attracting an influx of pop culture and celebrities, said Metabrge’s So. For example, Snoop Dogg owns a large plot of land in The Sandbox and has become one of the most popular investors on the platform through NFT giveaways and the development of the so-called “Snoopverse”. DJ Steve Aoki also owns land in Sandbox.
On the other hand, Decentraland offers purer visuals, So said, attracting designers and technicians interested in the potential to create realism in the metaverse. However, some brands are also gravitating towards the platform for this reason, as in the case of luxury designers for Metaverse Fashion Week which will be held at Decentraland in March. Physical brands like Hugo Boss and digital brands like Republique are already on board to sell merchandise during the event,according to Vogue Business .
rent versus buy
Unlike Roblox, the land area in The Sandbox and Decentraland is limited, meaning there is a finite amount of lots available. That ceiling created a de facto market for real estate, highlighted by premium prices. The average 1v1 installment in The Sandbox and Decentraland costs around $11,000, according to Nystrom.
Metabrge, which owns land on both platforms, spent over $25,000 on a 1×1 lot in Decentraland and nearly $15,000 on a 3×3 lot in The Sandbox.
Care Bears, on the other hand, received its land at a significantly lower price, as it is a partner of The Sandbox and entered the market almost a year and a half ago, when a plot was worth just over US$ 43. The brand refused to share financial details of your contract.
The juxtaposition of these two shopping experiences underscores an important point for brands to recognize about these markets: like the cryptocurrencies they are based on, they are volatile and their instabilityaffects any NFTs built on them .
“This is cryptocurrency, and it has its own fluctuations and volatilities, so the price of land on each [plataforma] can vary enormously from day to day,” said Litman of Media.Monk.
For this reason, renting installments can be a safer and more cost-effective option for brands. Just like renting an apartment in the real world, brands can enter into a lease with a consenting landowner and receive rights to that property by paying a time-based deposit.
Mediahub, for example, rented land on Decentraland tobuild an officethat allowed showing customers a metaverse. The agency used a third-party platform called Rentabyl and is now paying about $400 a month for publishing permissions on a storyline, which it can update whenever it wants, said Simeon Edmunds, senior vice president and creative director at Radical+. Mediahub’s Disruption Lab.
“It’s very expensive to buy a property versus rent it out, as long as you’re flexible about where you want to be and how much space you want,” he said.
Identifying hot spots
What a mark does with its terrain will depend on the location of its terrain within the platform, represented by the X and Y coordinates on a grid.
Themed districts have already sprung up in Decentraland with names like Fashion Street, Crypto Valley and the museum district, and the Sandbox has its own share of mini-environments, including a Las Vegas-inspired kingdom and real estate mogul Adrian’s upcoming Hong Kong district. Cheng
Land use cases are often facilitated by content in these districts, and brands should prioritize locations that fit the types of experiences they want to create, said Litman of Media.Monks. An upcoming fashion show, for example, will be held in March in the luxury fashion district of Decentraland and will support a range of events, including catwalks and parties. Retail stores selling digital wearables make more sense to be in this area than, say, Crypto Valley.
Last October, Decentraland held a music festival in the Festival Land district that featured top-notch DJs and artists. Brands buying land in this area should feel comfortable designing experiences that cater to music enthusiasts and heavy foot traffic. This also applies in undefined areas that nevertheless contain high-profile landowners, such as the land around Snoop Dogg’s property in The Sandbox.
The use cases will also depend on the purpose of the brand presence. Mediahub, for example, built an office in Decentraland because it wanted to demonstrate projects and other business-related work to clients, Edmunds said.
JPMorgan’s metaverse presence is not intended – at least not currently – to offer financial services, but exists as a lounge to browse and stroll around.
While the company declined to comment on this story, marketing director Carla Hassan spoke about the activation in arecent episode do podcast Marketer’s Brief da Ad Age.
“I truly believe that whatever we do, it cannot seem like a gimmick. You can innovate in some places, sure, but it has to feel relevant and it has to feel contextual or in the right context for any brand,” she said.
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