South Korea — renowned for its pop culture and a $16+ billion gaming sector — is perfectly poised to flourish in digitized worlds. K-pop singers have launched hits in the metaverse and real estate is popping up to host future concerts. Naver Z’s World, a metaverse leader based in South Korea, has attracted international fashion brands and individual creators alike to do business through its platform.
The South Korean government is acutely aware of the ramifications of all of the above. President Moon Jae-in’s administration is investing in the metaverse, encouraging interest in digital tourism and real estate.
Pop Culture, Retail, and the Business World: All Are Welcome
When Korea’s Ministry of Science co-founded a metaverse alliance, hundreds of companies, including Samsung and Hyundai Motors, became members. Another participant is SK Telecom, which has its own metaverse platform. It appeals to business leaders, who can use it to host conferences and seminars, and educators, who can create workshops and presentations.
It looks like South Koreans have every reason to feel confident about their role in Web 3.0.
The U.S. is connected to Korea’s future plans. Korea will invest funds from its $200 billion sovereign wealth fund, the Korean Investment Corp., in U.S. metaverse and machine learning startups.
The Allure Is Strong: Betting Big on Virtual Real Estate
As Bloomberg recently reported, South Korean investors are bullish on virtual real estate. The psychological allure of metaverse property is strong.
South Korea’s actual real estate prices are surging. (Sound familiar?) Houses are out of reach for many South Koreans. Many young people feel left out of the economy. Add in the socially distanced norms introduced through Covid-19, and the perfect storm has arisen for generations of internet-savvy wanderers to gravitate to online worlds.
Today’s twenty- and thirty-somethings are creating digital avatars, playing games, attending social events and going out to eat and shop. And they’re snapping up real estate. They’re browsing on Earth 2, a geolocator and market. Buyers can pick up Earth 2 tiles to stake out bits of places like Seoul’s upscale Gangnam district. Land and buildings in the virtual version are still accessibly priced. Buyers know there are risks to buying them up, but the rewards could be impressive.
In Decentraland, a virtual world shaped by its participants, some pieces of real estate that cost a few dollars in 2017 have six-figure price tags today. Korean investors are now putting dibs on real estate they hope to enjoy, sell, use for hobbies and businesses, or lease. Some imagine big payoffs in two or three years.
Goal Line: Can Virtual Homeowners Ultimately Sweep Profits Into Real Homes?
As human activities become increasingly digitized, blockchain technology and its progeny — crypto assets and virtual real estate—will keep growing. And as metaverse platforms design features that enable home building and commercial development as well as transactions and even mortgages, virtual towns and cities will coalesce. And more investors will notice. At the moment, Earth 2 land prices are rising even more quickly than in the real world.
If value is developed as it was in Bitcoin’s rise, young Koreans with an eye for real estate appreciation may get the virtual world to work for them, and meet their goals in the real world. By buying real estate in the virtual world, they might be able to buy the homes they’d love to have in real life.
Supporting References
Joori Roh for Reuters.com: FOCUS – South Korea’s “Gen MZ” Leads Rush Into the “Metaverse” (updated Sep. 8, 2021).
Kyungji Cho for Bloomberg: Korea’s $200 Billion Wealth Fund Is Betting on the Metaverse and AI Startups (updated Feb. 11, 2022). Alternate link via The Asian Age: Korea’s Wealth Fund Bet on Metaverse, AI Startups (version of story available to view at PressReader.com; Feb. 12, 2022). See also: Stella Ko for Bloomberg Quicktake: Explained – Inside South Korea’s Metaverse Property Boom (video via YouTube.com; Jan. 15, 2022).
Sang Kim, Director of Public Affairs, Korea Economic Institute of America, in TheDiplomat.com: South Korea’s Approach to the Metaverse (Nov. 2, 2021).
Choi Jae-hee for The Korea Herald: Un-Real Estate: Young Koreans Look to Make Real Money From Virtual Land (Aug. 23, 2021).
Photo credit: Joon Tae Kim, via Pexels.