Companies are spending millions on virtual real estate in the Metaverse

While most of us still can’t afford to buy a home in the real world, investors are pouring millions of dollars into buying virtual land in fake land.

CNBC reports that since Facebook became Meta, prices for digital plots have increased by 500%. One company said it spent more than US$2.5 million on land in Decentraland, a crypto-based metaverse with its own currency where every piece of in-game content belongs, completely autonomously, to players. Another company revealed that it spent $4.3 million to buy land in Atari’s The Sandbox metaverse.

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Metaverses, in the current zeitgeist, refer to those niche virtual worlds that, in most cases, look a lot worse than your average video game. Celebrity appearances and shows are becoming quite common, much like Fortnite concerts, and some like Snoop Dogg and Paris Hilton even own property in these worlds. Having celebrities on board naturally helps drive up the price, with the house next to Snoop’s planned mansion costing $4.3 million.

Other factors can also influence the price besides proximity to celebrities. Areas where people naturally congregate due to loading or other factors are also desirable lands. It doesn’t seem to have to do with having a nice place to exist, but rather based on visibility and exposure for advertisers. Which is weird for anyone who’s played an MMO and owned a house in the exact same location as loads of other players, because numerical scarcity isn’t real. It seems like most iterations of a metaverse already advertise themselves as full of weird old west ads like most other forms of social media.

Of course, no one who isn’t trying to sell you something is really suggesting that they’re probably good investments. Crypto in general can already be a risky and fast-moving market, given that a hamster has invested better than most people. What happens if Snoop moves out?

“I wouldn’t put money into what I didn’t care to lose. I definitely wouldn’t,” Mark Stapp, professor and director of real estate theory and practice at Arizona State University, told CNBC. “If it continues like this, it will most likely be a bubble. You are buying something that is unrelated to reality.

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