The real estate downturn hits the Metaverse

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    A few years ago, the Metaverse was the hottest real estate, but like the real world, virtual real estate is on the decline.

    At the end of 2021, when the Metaverse, cryptocurrency and NFT hype has peaked, a land parcel in Decentraland has been sold to the Metaverse Group for US$2.43 million. block.

    Weekly volume is now down to around US$50,000, a far cry from the $1 million weekly volume seen consistently until early last year.

    Switching to the sandbox metaverse, at the end of 2021, one digital investor paid $4.3 million for that block of virtual reality land.

    Metaverse architect Hunter Swihart said demand for virtual real estate is waning after years of high prices.

    “Everyone saw prices skyrocket with large companies buying land for millions of dollars, but looking back now, it was a terrible mistake,” Swihart said.

    Even attendance at Fashion Week in Decentraland has seen a sharp drop in interest, falling from 108,000 in 2022 to 26,000 this year, despite the big-name shows.

    according to blockwhile gaming platforms like Fortnite and Roblox are doing well, Metaverse platforms like The Sandbox and Alien Worlds are starting to struggle.

    One of the main reasons is that gaming platforms are fun and the average user usually knows what to do there. Contrast with the ambiguous nature of the metaverse.

    Digital Land was the first parcel to be sold in 2017 for just US$20 and has seen a significant uptick in a short period of time. Four years later, his Metaverse property parcel was sold for his US$6000, making the aftermarket price considerably higher.

    Secondary sales also declined in the second half of last year, according to a report by Parcel of the Web3 games market.

    However, according to one article, first companymany small virtual worlds are planning to release parcels this year, which is expected to lead to an exponential increase in the secondary trading market.

    Parcel said the future of the metaverse remains bright.

    Despite recent declines, the market for virtual homes is still valued at $1.4 billion, 180% higher than the $500 million mark in 2021, according to Parcel.

    Virtual real estate was the best performing category of NFTs last year. Parcel’s price index fell 63%, but is up 78% compared to 2020.

    “The outlook for the virtual land market remains bright, with growing attention and investment in the Metaverse,” the company said.

    “As Web3 gaming and digital fashion expand and mature in 2023, virtual spaces will undoubtedly play a key role in shaping the way we interact, play, work, learn and do business in virtual spaces. ”

    But not everyone seems to agree. Billionaire Mark Cuban, a longtime cryptocurrency investor, believes virtual real estate is a mistake.

    “People are buying property in these places and it’s the most ridiculous thing ever,” he said. altcoin daily.

    “Stupid. Stupid. Did I say it’s stupid? It’s not powerful enough…not as good as a URL…because there’s unlimited volume you can create.”

    YouTuber Dan Olson also agreed with Cuban.

    “It’s actually a bad video game made up of small, bad video games wrapped in a Matrix-cosplaying real estate scheme,” he said. block.

    But if Metaverse real estate is like real-world real estate, the market will rise again.

    Check out this space.


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