Virtual worlds

Collapse of Land Prices in the Metaverse Sparks Debate over the Viability of Virtual Worlds

According to an analysis conducted by information.

Average virtual land prices have fallen by more than 80%. At the same time, trading volume has fallen by more than 90% from the highs of November 2021.

The information comes from WeMeta and was compiled from data on Sandbox, Decentraland, Voxels, NFTs Worlds, Somnium Space and Superworld platforms.

Metaverse virtual land volume and average price
Source: @theinformation on Twitter.com

The metaverse bust

The Metaverse Virtual Earth was touted as the next big thing not too long ago. The growing interest had sparked a rush to acquire prime locations, mirroring the real estate market.

For example, as recently as February, an investor paid $450,000 for a virtual plot next to Snoop Dogg in the Snoopverse, which runs on the Sandbox platform.

This surge is largely due to Facebook’s rebranding as Meta in November 2021. Meta CEO Mark Zuckerberg called the metaverse the next frontier for connecting people. Specifically, he envisioned virtual worlds as fundamentally changing the way society works. Including breakthrough concepts, such as Metaverse companies providing jobs.

But, fast forward to now and deep into the crypto winter, buyers who entered the top are taking heavy losses as average prices and interest have fallen.

Virtual reflecting macro

The crash reopened the debate on whether virtual land is a real asset to invest in. As mentioned by Fortune, the Metaverse incorporates instant teleportation to any location. However, unlike the real world, there are few advantages to buying in a prime location.

Additionally, land in the metaverse can be infinite, ending the idea that virtual land is a scarce resource.

However, the Metaverse land cooperative Airdott attributed the slowdown to the broader macroeconomic landscape, saying “why” wouldn’t the real world have an impact on the virtual world? They added that they were “patiently waiting” for things to bounce back.

Over the past two years, real estate prices have skyrocketed due to buyer demand. But, some real estate experts are now saying the boom is over as household budgets squeeze due to rising inflation and the threat that central banks will continue to hike rates.

A recent article by the Guardian pointed out that China is experiencing a drop in sales of new properties. At the same time, the US market saw the average house price drop sharply in June.

Posted in: Bear Market, Metaverse