Investment banking giant JPMorgan Chase has set up shop in the Metajuku mall. The bank’s lounge features a spiral staircase, a live tiger, and an illuminated portrait of CEO Jamie Dimon.
The catch – the JPMC new digs aren’t located in the real world, but in Decentraland – a popular metaverse platform. The bank’s metaverse launch coincided with the release of a paper by Onyx, JPMC’s blockchain arm launched in 2020 that explores opportunities in the metaverse. In conjunction with this, JPMC predicts that the metaverse will become a $1 trillion market opportunity in yearly revenues, with its virtual worlds infiltrating every sector in some way in the coming years. While JPMC is the first bank to set up a metaverse office, other big brands, businesses, and influencers are expected to do the same.
The metaverse is made up of not one, but various virtual worlds—popular ones being browser-based Decentraland; the Sandbox, owned by Hong Kong’s Animoca Brands; and Roblox, which is favored among kids and teens. Users use digital avatars to explore these virtual lands, where they can socialize, play games, purchase real estate, browse art, or go shopping.
Companies entering the metaverse include – Retail and entertainment brands from Walmart and Nike to Disney and Warner Music Group. For example, Warner Music, the entertainment behemoth that’s home to a star-studded artist roster including Dua Lipa and Red Hot Chili Peppers, is currently building a concert-focused theme park on metaverse platform the Sandbox. Luxury brand Gucci has purchased land on the same platform to develop a space to host “immersive experiences” and offer digital fashion items for purchase, targeted at Gen Z. The Sandbox has already cultivated over 200 partnerships with companies, brands, and individuals including rapper Snoop Dogg, sportswear firm Adidas, and gaming company Atari, says the report.
In addition, companies from many industries are finding use cases for the metaverse, including – architecture, real estate, and even tax and accounting sectors. The U.S.-based Prager Metis accounting firm, for instance, opened its three-story metaverse headquarters in Decentraland recently. The company has been “constantly fielding inquiries from…clients trying to understand the metaverse from a financial and tax compliance perspective,” says Jerry Eitel, partner at Prager Metis. “Every tax and accounting issue [applicable to businesses] in real life is also applicable to the metaverse,” he says.
Real estate has also boomed in the metaverse economies. Virtual land sales have been driven by the growth of the “ownership economy” in Web3, a new iteration of the internet that enthusiasts advocate as decentralized, equitable, and user-controlled. Virtual real estate is a “growing market,” says JPMC, and brands have contributed by “buying up space so they can create virtual stores and other experiences.” The average price for a parcel of virtual land doubled in just six months from $6,000 in June to $12,000 by December of 2021 across the four main metaverse platforms.
In June 2021, developer Everyrealm (formerly known as Republic Realm) bought a piece of Decentraland land for $913,000. The land has now been turned into the Metajuku shopping district, where JPMC’s lounge is located. With the virtual real estate market expecting to see services like credit, mortgages, and rental agreements.
The development of the metaverse economy has created jobs both online and offline. Companies, from apparel to tech firms, are on a metaverse hiring spree. JPMC predicts that some individuals will become the “gig workers” of the metaverse—earning income by providing services in the virtual world. JPMC has been undertaking efforts to build out its blockchain and crypto expertise and infrastructure. In a Bloomberg interview, Onyx’s global head, Christine Moy, said that its unit is now focused on “providing infrastructure” like blockchain and payments tech to clients, which include game publishers. In addition to JMPC being optimistic about the metaverse’s trillion-dollar opportunity: Goldman Sachs forecasts the metaverse will become an $8 trillion market.
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JPMorgan Opens A Bank Branch In The Metaverse (But It’s Not What You Think It’s For)
March 16, 2022 CAIL Innovation commentary 905-940-9000 info@cail.com