If you think metaverse real estate is dead, perhaps there’s a bridge in the Sandbox’s version of Brooklyn you can buy.
The real estate market is alive and well in the metaverse, the New York Times reported. Despite some high-profile problems in the cryptocurrency world, the market continues to grow, with Technavio projecting it will increase $5.37 billion in the next three years.
The metaverse market is governed by the same supply-and-demand principles that affect the housing market in the physical world. In the Sandbox, a popular virtual world, direct land purchases go for nearly $400 per parcel. But prices skyrocket on the resale market or in places where buyers can be close to prominent bands and celebrities, such as Snoop Dogg.
“Land is becoming the infrastructure of the metaverse,” Sebastien Borget, co-founder of the Sandbox, told the Times.
A year ago, real estate in the metaverse was the talk of the industry. It seemed to be the next frontier in the commercial sector. In November 2021, trading volume in the metaverse hit $229 million, according to WeMeta, buoyed by Facebook’s rebrand to Meta Platforms.
Months later, however, metaverse real estate was looking like a folly. Trading for land across six platforms dropped 97 percent from that November to last June, WeMeta reported. Sales volume trickled to a laughable $8 million in June, when the average price of land was $3,300. Volatility has continued to reign since then as a crypto winter took hold.
Oh, and cryptocurrency firm FTX had one of the most spectacular collapses in recent memory. Sam Bankman-Fried became a villain in the cryptocurrency universe and was ultimately arrested as his company declared bankruptcy following a run that resulted in an $8 billion shortfall for the exchange, prompting questions about the viability of cryptocurrency investing.
And yet, the metaverse real estate market keeps plugging along. Once called the “dumbest s*** ever” by Dallas Mavericks owner Mark Cuban, the market is stubbornly hanging on and appears poised to explode in the coming years. Then again, that’s what people thought last year, too, so skepticism is healthy.
— Holden Walter-Warner