The largest bank in the US, JPMorgan, has taken a massive step into the Metaverse, opening a virtual lounge in the popular blockchain-based virtual world Decentraland.
Visitors to the lounge, located in Decentraland’s Metajuku shopping mall, are greeted by a roaming tiger and a digital portrait of Jamie Dimon, the CEO of JPMorgan. If players go upstairs, they can watch an executive’s presentation on the cryptocurrency economy.
The “Onyx Room,” named after the chairman of JPMorgan’s internal blockchain payments system, was unveiled alongside a report from the bank, detailing the types of business opportunities companies can expect to find in the Metaverse.
The report states: “The Metaverse is likely to infiltrate every sector in some way in the coming years, with a market opportunity estimated at more than $1 trillion in annual revenue,” while noting that $54 is already spent billion in virtual goods each year: double what is spent on buying music.
The report notes that the average price of virtual land doubled from $6,000 to $12,000 between June and December of last year, and predicts that in-game ad spending will reach $18.4 billion per year by 2027.
A surge of individual creators using Web3 to sell their work in innovative ways has been highlighted by JPMorgan as a driving force behind the Metaverse’s new economy.
“This democratic ownership economy coupled with the possibility of interoperability, could unlock immense economic opportunities, whereby digital goods and services are no longer captive to a singular gaming platform or brand.”
The rise in mainstream adoption of Metaverse is also being driven by interest from mass brands, JPMorgan notes, citing Adidas and Nike’s move to create NFT-based products and storefronts, as well as Samsung’s opening of a Metaverse store as huge strides in adoption.
As if to underscore the point, Disney announced today that it has officially appointed a new executive, Mike White, to lead its foray into the Metaverse. According to a memo from Disney CEO Bob Chapek, Disney is looking to expand its storytelling prowess into the digital realm. “Today, we have the opportunity to connect those universes and create a whole new paradigm for how audiences experience and engage with our stories,” said Chapek.
However, the JPMorgan report was not entirely positive.
In a section titled “Navigating Hype vs. Reality,” the report stated, “Despite great excitement about the possibilities of the Metaverse, to enable its full potential for engagement, community building, self-expression, and commerce, key areas need to be further developed and matured,” pointing to flaws in the overall user experience, poor avatar performance, as well as difficulties with business infrastructure.
Virtual real estate sales are skyrocketing
With 65,000 transactions totaling $350 million in virtual land in 2021, the Sandbox is the greatest virtual world in terms of transaction volumes. Last year, the second largest virtual world, Decentraland, had 21,000 real estate transactions worth $110 million.
When digital activities are shifting to the Metaverse space, and people are going to spend their time and money in the metaverse then banks have definitely a role to play.
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