Why buy land in a virtual world? Inside the metaverse real estate frenzy

SIMONE DEL ROSARIO: LOOKING FOR A PROPERTY WITH GREAT NEIGHBORS AND ENDLESS POTENTIAL?

DEVELOPERS AND SPECULATORS ARE TREATING PARTS OF THE INTERNET AS IF IT WERE MANHATTAN – IN THE 1800S! BUYING PRICEY PARCELS OF VIRTUAL “LAND” WITH A DREAM THAT ONE DAY MASSES OF PEOPLE AND BUSINESSES WILL WANT A PIECE OF THE ACTION.

SO FAR THE ACTION IS LIGHT IN THIS SO-CALLED “METAVERSE,” BUT THAT’S NOT STOPPING THE INVESTMENT FRENZY.  IN 2021 REAL ESTATE TRANSACTIONS HERE TOPPED HALF A BILLION DOLLARS AND THAT’S PROJECTED TO DOUBLE THIS YEAR.

SO WHY WOULD ANYONE BUY LAND IN A VIRTUAL WORLD? LET’S TAKE A LOOK INSIDE.

THE METAVERSE LOOKS A LOT LIKE A VIDEO GAME. YOU CONTROL YOUR 3-D AVATAR, GO TO MEETINGS, PLAY GAMES, HANG WITH FRIENDS – AND NOW, YOU CAN BUY LAND THERE TOO.

HERE’S A MAP OF THE SANDBOX – ONE OF THE BIGGEST METAVERSE REAL ESTATE PLATFORMS. LOOKS LIKE ATARI PURCHASED THIS PLOT HERE. AND OVER HERE SOMEONE SHELLED OUT 450-THOUSAND DOLLARS TO BE SNOOP DOGG’S NEIGHBOR IN SNOOPVERSE – WHERE THE RAPPER PLANS TO EVENTUALLY HOST EVENTS.

EDWARD CASTRONOVA: I think there are people who have lots of money and just like to goof around with it.

SIMONE DEL ROSARIO: MEDIA STUDIES PROFESSOR EDWARD CASTRONOVA IS SKEPTICAL MAKE BELIEVE REAL ESTATE IS THE NEXT GOLD RUSH.

EDWARD CASTRONOVA: part of my cynicism is based on seeing these land rushes come again and again and again. And every time I just want to say ‘it’s the content stupid’

SIMONE DEL ROSARIO: RIGHT NOW THE METAVERSE IS LIKE LAS VEGAS BEFORE CASINOS. BUT IF THERE’S A COMPELLING REASON TO GET PLAYERS TO THE TABLE – MAYBE THERE’S A JACKPOT AFTER ALL.

Agent Avatar: this is a property with tons of promise lots of potential just came in but won’t stay on the market for too long and it’s a good neighborhood too.

SIMONE DEL ROSARIO: YES, THERE ARE METAVERSE REAL ESTATE AGENTS…AND GENERALLY – THERE ARE *THREE REASONS PEOPLE ARE GAMBLING IN THIS MARKET.

NUMBER 1. TO SPECULATE.  BETTING PRICES WILL GO UP – SO YOU CAN SELL FOR A PROFIT. IN 2019 THE AVERAGE PARCEL IN THE POPULAR PLATFORM DECENTRALAND WENT FOR 500 DOLLARS. NOW – IT SELLS FOR 29 TIMES THAT.

NUMBER 2.  DEVELOP IT.  BUILD A CASINO, HANG BILLBOARDS, PROMOTE A POP CONCERT, CURATE AN NFT GALLERY.  ALL OF THIS CAN THEORETICALLY GENERATE INCOME…IF PEOPLE SHOW UP.

AND NUMBER 3. RENT IT OUT. BLOCKCHAIN INVESTOR TOKENS DOT COM PLOPPED DOWN 2.4 MILLION FOR A 116-PARCEL ESTATE IN DECENTRALAND’S FASHION DISTRICT. AND NOW SKETCHERS IS ONE OF ITS TENANTS.

EDWARD CASTRONOVA: if somebody figures out a way to take a virtual real estate idea, and add to it some really compelling content that you can get 30, 40, 50, 100 million players in, right? You’re gonna wish you’d invested in that one. I just haven’t seen it. That’s all.

SIMONE DEL ROSARIO: BUT HE DOES SEE WHY MORE PEOPLE ARE STARTING TO TAKE NOTICE.

EDWARD CASTRONOVA: one of the things that drives that interest is the fact that the real world sucks. For so many people.

SIMONE DEL ROSARIO: AND WITH PROPERTY PRICES ON PLANET EARTH JUST OUT OF THIS WORLD, YOU MIGHT BE LOOKING FOR *OTHER-WORLDLY REAL ESTATE, RIGHT ALONGSIDE THE RICH AND FAMOUS.