Investments are down practically across the board, with even safer things like stocks slumping day by day. It's enough to make a person wonder if there's any way to help their money grow at all, or if it's worth investing in anything. From the looks of things, this is a sentiment that's also being echoed among metaverse real estate investors. Should they hold 'em, or should they fold 'em?
When it comes to metaverse real estate, monthly average land prices in the big two, The Sandbox (SAND -8.71%) and Decentraland (MANA -8.18%), are some of the lowest they've been since February. It could be a great opportunity to snatch virtual real estate bargains, depending on your long-term plans.
Image source: Getty Images.
Metaverse real estate prices are definitely down
Buying metaverse real estate in either The Sandbox or Decentraland between November 2021 and February 2022 meant shelling out over $10,000 per lot, no matter the location . In Decentraland, the monthly average price of a lot in November peaked at over $17,000, and in The Sandbox, December 2021 had monthly average prices of over $14,000. A lot of this was due to the high cost of the cryptocurrencies of these realms, SAND and MANA, which have been driven down along with the rest of the broader market.
People who bought early, of course, didn't necessarily lose out, because they can still use their investments to generate income in a variety of ways. Because they're playing the long game, the odds are in their favor that values will catch back up over time, just like what happens in real-world real estate after a price decline.
Should you buy metaverse real estate now?
You don't have to wait. You can get in on the metaverse bargains that are to be had right now. In April 2022, the monthly average price for land in The Sandbox was $6334.19 and the monthly average price in Decentraland was $7,217.32. Although there were significantly fewer transactions taking place in April, with a daily average of 87.5 for The Sandbox, and a mere 28.6 for Decentraland, the currently available discounted land shouldn't be ignored. It's clear that people are holding on to their properties, but there are always a few that can be had.
Data source: Nonfungible.com, as of May 23, 2022. Chart by Author.
If you're intending on opening any sort of metaverse-based business, whether that's a billboard company, a metaverse real estate leasing company, or some kind of practical event space, buying now means you're likely going to spend less that you would have just a few months ago to get your business off the ground . You'll need to make less to profit, and ultimately, you'll see profits much sooner. This is all good news.
If you're buying metaverse real estate for your business, either for a digital twin structure to entice clients, or as a hub to showcase your brand for metaverse users, it's an even better opportunity, since what will essentially be sunk advertising costs will be significantly reduced.
Does the metaverse have a future?
Yes, I firmly believe that the metaverse and the virtual real estate there has a long, fruitful future ahead of it, despite the way things look right now. But I'm not the only one. Citigroup recently published a report projecting the metaverse to have a $13 trillion total addressable market made up of 5 billion people by the year 2030.
It may seem like a reach, but even the oldest model we have of what a metaverse platform could be like, Second Life, has been kicking and growing since 2003. It was designed as a significantly smaller world than any of today's true metaverse platforms, but even in Second Life, the number of daily online users floats between about 37,000 and 42,000, depending on the day of the week. Monthly active users (players who don't log in daily, but do log in at least once a month), as of November 2021, topped 750,000.
But, of course, most of the players funneling into places like Decentraland and The Sandbox won't be coming from Second Life -- they'll be coming from metaverse-like games like Roblox, where Gen-Z is often spotted doing many of the same things that are possible in the metaverse, but without the potential for true property ownership or say in the government of their platform. As of the end of first-quarter 2022, there were 54 million daily active players in that game.
Can the metaverse survive this downturn? Yes. I'd argue that it's surviving just fine.
Will it continue to grow? 54 million daily players (from just one of many platforms) who are looking for new experiences and opportunities in the online world say that the future is bright.
