Plunging volume of transactions, plummeting property prices, sluggish buyer interest… The virtual property market on the metaverse is experiencing a sharp downturn.
Unsurprisingly, the value of land and other real estate in the metaverse has plummeted in recent weeks, following the general trend in the cryptocurrency and NFT markets.
It was in November 2021 that interest in real estate in the metaverse peaked, following the rebranding of Facebook to Meta, which illustrated in the eyes of the market the strong economic potential of this technology. Since then, the tide has turned and it is the disillusion that reigns among those who had invested in the metaverse, hastening to buy land on Decentraland or The Sandbox, hoping to be able to resell them on the rise most of the time.
Between November 2021 and June 2022, real estate transactions in the metaverse on these two platforms fell by 97%, according to WeMeta data reported by The Information.
In numbers, $229 million worth of properties had sold in the metaverse at the end of last year, compared to just $8 million at the start of the summer. Another comparison: 16,000 sales were concluded in November, but no more than 2,000 in June… at a loss. Because the average price of land is necessarily down. In February, it was $16,300 but was down to just $3,300 in June, a drop of almost 80%.
This situation is not only due to the collapse of cryptocurrencies. It is indeed the general enthusiasm around the metaverse that has fallen sharply, many investors having finally been put off by the lack of maturity of a market on which everything remains to be built, starting with an audience, which – even assuming it works — will take many years.
Of course, the near-widespread uncertainty about the real economy, which has only intensified in recent months, has not helped support virtual property sales in the metaverse. And even if the potential is there, more and more companies doubt that investing heavily in the metaverse today is a profitable strategy in the long term, and prefer to postpone their plans until later. It must be said that the brake stroke is very violent.