Transaction volume plummeting, property prices plummeting, buyer interest at half-mast… The market for virtual properties on the metaverse is suffering a brutal slowdown.
A drop by 97%
Not surprisingly, 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 had peaked, following Facebook’s rebranding into Meta, which illustrated to the market the strong economic potential of the technology.
Since then, the tide has turned and disillusionment reigns among those who had invested in the metaverse, rushing to buy land on Decentraland or The Sandbox, hoping to resell it at a premium most of the time.
Between November 2021 and June 2022, real estate transactions in the metaverse on these two platforms dropped by 97 percent, according to WeMeta data reported by The Information.
By the numbers, $229 million worth of properties had sold in the metaverse by the end of last year, compared to just $8 million at the beginning 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 the land is inevitably decreasing.
In February, it was $16,300, but by June it was only $3,300, a drop of almost 80%.
This is not just to be blamed on the plummeting cryptocurrencies. It is indeed the generalized craze around the metaverse that has fallen sharply, many investors having finally been cooled by the lack of maturity of a market on which everything remains to be built, starting with an audience, which – even assuming it would work – will take many years.
Of course, the near-uncertainty about the real economy, which has only increased in recent months, has not helped support virtual property sales in the metaverse. And even though the potential is there, more and more companies are doubting that investing heavily in the metaverse today is a promising strategy in the long term, and prefer to postpone their plans. It must be said that the brakes are very strong.