Decentraland, once valued at $1 billion, is reportedly seeing only 20 to 30 transactions per week involving the buying and selling of properties.
The trend of purchasing virtual land in the Metaverse, which gained momentum in 2021, is currently witnessing its most significant downturn. Architect Hunter Swihart, who specializes in designing virtual objects for Metaverse platforms, commented, “The frenzy began when large corporations started purchasing land for millions of dollars. In hindsight, it was a grave error.”
Social media, gaming, and metaverse platforms like Decentraland and The Sandbox were at the forefront of the virtual land sales boom, with virtual lands fetching high prices as NFTs. These platforms hosted fashion shows by well-known brands and virtual concerts by musicians.
However, according to a report by Independent Turkish, the popularity of these applications started to wane significantly from 2022 onwards.
90 percent melted
As major corporations like Disney and Microsoft have either shut down or scaled back divisions dedicated to developing metaverse strategies, The Wall Street Journal reported a significant decline in the real estate market within the virtual world. Specifically, the selling price of land in Decentraland has plummeted by nearly 90 percent compared to the previous year.
In Decentraland, once estimated to be worth $1 billion, reports suggest that only 20 to 30 individuals engage in property transactions on a weekly basis, translating to roughly $50,000 in transactions.
Low attendance this year
Facing a decline in active users, metaverse platforms are turning to traditional strategies to draw in participants. Decentraland, for instance, recently hosted a virtual fashion week with sponsorship from major brands such as Tommy Hilfiger and Adidas. While the event attracted over 100,000 attendees last year, this year saw a turnout of 26,000 people.
“It was a terrible mistake”
Architect Hunter Swihart, known for designing virtual objects on Metaverse platforms, observed, “Prices soared as major corporations purchased land for millions of dollars.”
Reflecting on the developments, Swihart expressed regret, saying, “Looking back, it was a grave mistake,” and voiced concerns over Decentraland’s potential downfall in the near future.
Commentators point to the high cost of necessary hardware, such as virtual reality glasses, as a significant barrier to user interest in metaverse platforms. This slow adoption rate is adversely impacting the value of virtual land and other NFTs.
A recent survey disclosed that less than 1 percent of U.S. teenagers engage with virtual reality glasses, signaling a lack of enthusiasm for the technology among younger demographics.
Such trends pose concerning implications for Meta CEO Mark Zuckerberg, who has invested billions into virtual reality technology and the broader concept of the metaverse.
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