The largest US bank, JP Morgan, has made a big move in the metaverse, opening a virtual lounge in the popular blockchain-based world Decentraland after labeling the region as a “$1 trillion opportunity.”
Visitors to the lounge at Decentraland’s Metajuku Mall are greeted by a roaming tiger and a digital portrait of JP Morgan CEO Jamie Dimon. If players follow the uptrend, they can watch an executive’s presentation on the economics of cryptocurrencies.
“Onyx Lounge,” named after JPMorgan’s in-house blockchain payment system, was unveiled alongside a report from the bank detailing the types of business opportunities companies are looking for in the metaverse.
The report states: “Metaverse will in some way infiltrate every sector in the coming years, with market opportunities projected to exceed $1 trillion in annual revenue”, while also highlighting that each year virtual $54 billion is already being spent on items—twice the amount spent buying music.
The report noted that the average price of virtual lands doubled from $6,000 to $12,000 between June and December last year, and predicted that in-game advertising spend would reach $18.4 billion per year by 2027.
JPMorgan has identified the multitude of individual creators using Web3 to monetize their work in new ways as a driving force behind building the new economy in the metaverse.
“This democratically owned economy, coupled with the potential for interoperability, could unlock immense economic opportunities, whereby digital goods and services are no longer a captive to a single gaming platform or brand.”
Citing the creation of Adidas and Nike’s NFT-based products and shopfronts, as well as Samsung opening a Metaverse store, JPMorgan notes that the growing mainstreaming of the Metaverse is also being driven by interest from big brands.
As if to underscore the point, Disney announced this morning that it has officially hired a new executive, Mike White, who will lead its foray into the metaverse. Disney is looking to expand its storytelling skills into the digital realm, according to a memo from Disney CEO Bob Chapek. “Today, we have the opportunity to connect those universes and create an entirely new paradigm for how audiences experience and engage with our stories,” Chapek said.
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JPMorgan’s report was not all positive, however.
In a section titled “Navigating Hype versus Reality”, the report states, “Despite great enthusiasm about the potential of the metaverse, it continues to enable its full potential for engagement, community building, self-expression, and commerce.” “Key areas need to be further developed and matured,” while pointing to flaws in the overall user experience, poor performance of avatars as well as difficulties with commercial infrastructure.
