In October 2021, Facebook announced it would change its name, image, and concept to Meta. The shift brought a great deal of attention to the emerging concept of the metaverse. In just a few months, more virtual worlds have become popular, along with non-fungible tokens (NFT), cryptocurrencies and the concept of decentralization.
2022 is set to accelerate this evolution. The metaverse and its possibilities continue to make headlines all over the media and we have already seen increasingly large transactions for the purchase of land in virtual environments. This space is mediated by programmes, apps, games and platforms; being accessible through devices such as computers, phones and tablets. It portrays a view of ‘real’ life being carried entirely through the virtual world.
It’s the new hype on the web. Big tech companies believe the metaverse and associated platforms to become the most significant technological advancement in terms of economic and social importance. In fact, buying real estate in the metaverse promises to become part of normality in the coming years.
According to a report by MetraMetric Solutions and based on the four most important virtual platforms today (The Sandbox, Decentraland, Cryptovoxels and Somnium Space), real estate sales in the metaverse reached $500 million worldwide in 2021. These sums are paid in cryptocurrencies, which are always subject to high fluctuations in value from one week to the next, making it difficult to establish per-square-metre rates.
In the lead is The Sandbox which has already sold more than US$86 million worth of digital land. This virtual world, which began as a two-dimensional mobile app, has become a gigantic 3D virtual planet where virtual versions of the rapper Snoop Dogg, Shaun the Sheep and all the Atari characters, live each with their own territories and cities. Another example would be Republic Realm, a firm that paid more than US$4 million to buy a plot of land in The Sandbox and turn it into Fantasy Islands, a group of 100 islands.
Of the total number of plots available, 90 were sold on the first day and are now on sale in the secondary market for exorbitant prices, reaching eight times their price.
So, will the metaverse last forever?
The metaverse real estate boom revolves around people speculating on what these platforms will look like and be valued at in a few years; more importantly, how these technologies will or will not be adopted in the near future. Some estimates put the metaverse market at $8 trillion in the near future. And programmes such as Roblox or Fortnite have been able to capitalise on this type of immersive interaction for years. But that is still far from converting into a desire and interest for people to be perpetually connected to virtual spaces through avatars. If we want the metaverse to be more than a massive multiplayer virtual reality, we simply need more power and time. Even if the metaverse was our inevitable destiny, we still have a long way to go in terms of hardware.
Apple itself had to delay the launch of its augmented reality devices until it has the technical means to do so. For now, only time will tell whether this digital real estate bubble is a golden opportunity or just blatant speculation to inflate the value of something that has no value.