That’s not a number to scoff at, and with such a high value, it was only a matter of time before digital assets in existing metaverse’s started commanding 7-figure prices.
A few years ago, the idea of spending millions of dollars on a single digital property would have been laughable. Today, however, the idea is not as far-fetched. The reality is that corporate and individual investors are rushing to get their hands on a piece of virtual real estate while it’s still available.
Multiple asset management companies and investors have spent millions of dollars buying land they’ll never touch in the last few months! And it doesn’t look like the trend will slow down any time soon.
Real-World Dollars for Virtual Land
Sales of virtual land in 2021 hit a record high of $500 million. In January 2022, sales increased tenfold compared to the same period in 2021.
Research by Brand Essence shows that this is only the beginning. According to a report, the market value of the metaverse in 2021 was $209 billion. That number is expected to hit just above $700 billion by 2027. That’s an average annual growth rate of just shy of 23%.
As recently as the last three months, multiple businesses have shelled out millions of dollars to buy virtual land and prime it for development. One of the most significant virtual land purchases in mid-November 2021 was for a piece of land in Decentraland’s fashion district, for which Tokens.com paid a staggering $2.5 million.
However, that purchase would be dwarfed a few weeks later when Republic Realm, a metaverse real estate developer, spent $4.28 million to acquire 792 parcels of land (approximately 1,200 city blocks worth of land) in the Sandbox metaverse platform.
In collaboration with Atari’s giant game developer, Republic Realm intends to develop Fantasy Islands, a high-end real estate development complete with a fully-occupied shopping mall.
With plans to put up 100 islands, each trading from $300,000, the company is set to rake in about $30 million in sales.
As of January 2022, the smallest piece of land available for sale in any metaverse platform was going for a whopping $11,000 for what would be about 96 square meters of space. That’s despite the same piece of virtual land being available for approximately $1,000 back in March of 2021.
Why Is the Business of Virtual Land Booming?
Back on the 28th of October, 2021, Facebook CEO Mark Zuckerberg announced the change of the social media giant’s parent company name to Meta. Under the new moniker, the giant would operate all its apps and tech.
The tech giant also confirmed that they would be investing $150 million in immersive learning to equip creators with the skills they need to develop the metaverse — a virtual world where people would be able to interact as they do in the real world but with greater flexibility and continuity that we’ve ever seen before.
This announcement laid the groundwork for the hype that we’re currently seeing in the virtual world. With companies such as Facebook showing interest in the metaverse, investors can’t help but get in the game while there is still enough land to go around.
The popularity, transparency, and security of the NFT sector, blockchain technology, and the development of metaverses have also hugely contributed to the increasing interest in virtual land.
Similarly, partnerships between metaverses and celebrities have created a buzz for these digital spaces. Snoop Dogg is one of the celebrities putting up virtual mansions in a section of the Sandbox metaverse.
In late December, an NFT collector paid $450,000 to purchase a plot next to Snoop Dogg. These kinds of deals are also driving FOMO, which is seemingly fueling the surging prices of virtual land.
How Much Virtual Land is Available in the Metaverse?
While Facebook’s change of name to Meta added fuel to the virtual land rush fire, the limitation of available pieces of land on different metaverse platforms also drives the current demand for the land.
For instance, two of the biggest and most popular metaverses, Sandbox and Decentraland, have a limited number of lands they’ll ever produce.
Sandbox will only ever have 166,464 Lands available. As the pieces available decrease, there is a high likelihood that prices will similarly go higher. Anyone who doesn’t get their chunk soon is bound to miss out.
Decentraland, on the other hand, has limited available plots of land to 90,601.
While these might seem like big numbers, they are not all available. For instance, Sandbox will retain about 26% of its available land for special events (10%) and to distribute to gamers, partners, and creators as rewards (16%).
That only leaves about 123,840 Sandbox plots available for sale, of which over 23,000 pieces have been sold.
Fortunately, there are more accessible tools to regular investors and they might be on the radar of anyone looking to dip their hand in the world of virtual land investments. In January, MetaDojo presented a project aimed at giving early metaverse startups financially and technically accessible solutions to start a business in virtual space.
The company offers ready-made premises and infrastructure that can accelerate the growth of businesses in the metaverse. For investors, holding such tokens might not only give an investment incentive but also open new opportunities such as Play-to-Earn and the creator economy.
What the Future Holds
Recent developments and investments in different metaverse platforms are a good indicator of where experts expect the market to go.
Although investing in virtual land is a risky affair, recent trends point towards even more rapid growth in the next few years. As more companies such as Facebook, Google, and the likes of Apple invest in virtual reality, so will the demand for these virtual spaces.
metaverse platforms such as Sandbox, Decentraland, and Somnium Space lead the pack in investments and development. While each is tailored to a specific protocol and functions in a particular way, the main goal for all is convergent — to create a network of 3D digital worlds that enhance social connections.
This article was originally posted on FX Empire