Virtual Land Sales
The concept of virtual real estate sounds dumb to many people. Their argument goes that physical real estate has value due to scarcity. They are not going to be expanding Manhattan Island. The coastline of Miami Beach is limited. We have seen real estate in the virtual world emerge over the last two years, and I don’t think this trend is going to crash out. For sure, some of the Metaverse entities won’t make it, but the basic concept of virtual real estate follows the same scarcity properties of physical real estate and also more broadly NFTs.
Virtual real estate is worth something, potentially a lot of money, if people want it. This can be for status, just like with profile picture NFTs. This can be for speculation, in the same way people buy physical real estate hoping the price will go up. This can also be for utility. People acquire land in the real world to build on it with houses to live in or for commercial properties. The same will happen in the digital world, as people will buy virtual properties to hang out and flex, and businesses will also buy land to build experiences for their customers.
Let’s review a few of the early success stories in virtual land. We’ll start with two companies that are mapping the real world to a virtual one. Super World has taken the entire planet Earth and mapped it to 68.4 billion NFT plots of land. You can go on their website now and buy any one of these plots that has not already been minted as an NFT. You can also go on OpenSea and purchase famous spots like the Taj Mahal for 50 ETH ($150K) or the Eiffel Tower for 100 ETH ($300K). They tell users that by purchasing land you become a “stakeholder on our platform and share in revenue created on your virtual land from user activity, including: In-game purchases, transactions, advertising, eCommerce, digital commerce, and gaming.” Most of this is not live yet, but you can see where the upside is from this. I bought a few pieces of prime virtual land in Super World in cities I have lived — Atlanta, Miami, and Chicago. I was able to mint these as unowned properties directly on the Super World website for 0.1 ETH ($300). Felt like a fun bet on whether Super World could build this into a real-world AR game.
Another really cool game mapping the earth into virtual plots of lands is Atlas Earth. (Quick note, our group is an investor in their parent company Atlas Reality.) Atlas Earth has split the entire United States into 30ft x 30ft parcels that you can buy for as low as $5. The fun part is that you can only buy land in the Atlas Earth game by standing on the plot with their AR app open. Want to buy the Empire State Building? Then you need to get to NYC and do it before someone else does. The game pays you rent based on activities in the game on your plot of land. You can also accumulate land and get elected Mayor or Governor of your city or state. I went over to the popular Lenox Mall in Atlanta and bought myself a chunk of that prime virtual real estate. Atlas Reality is a game developer who knows how to create engaging AR experiences, so I love the bet here.
Not all virtual worlds will map the real world. Many of these will just be newly created virtual Metaverse lands. In a prior post, I reviewed the land concepts in Sandbox and Decentraland. These companies have built Metaverse games with arbitrary land caps. Individuals or companies can buy land in their worlds, starting at around 3 ETH ($9K) currently and then use their builder tools to create experiences. Land near hot brands like Adidas or Snoop Dogg can sell for even higher prices. This works much the same way as in the real world. Once someone makes an area “cool”, the surrounding land values spike. Sandbox is currently capped at 166,464 plots of Land. Could they open up new territories outside the existing map and expand the supply? I’m sure they can, but the OG locations will likely be more valuable for a long time.
While Sandbox and Decentraland are the two biggest players in the virtual world Metaverse space, there are many more competitors coming on strong. I covered SportsIcon and their upcoming Sports Metaverse in that prior post. They will be selling 5K plots of land in their Sports City, where fans can interact with star athletes, teams, and leagues. This video explains it well. (Another note, our group is also an investor in SportsIcon.) Wilder World is another one you can check out. They are launching an immersive 5D Metaverse world with a Blade Runner vibe. Their first land sale will be in Wiami with futuristic cribs “with sprawling views of Wiami”. Leading blockchain game Axie Ininity also has a virtual land component. Their world sports 90,601 plots of land, where you can train your Axie characters and interact with others. I haven’t bought anything in Wilder World yet, but I snagged some of their $WILD token to have some skin in that game.
Much like in the real world, groups are popping up to acquire and speculate on virtual real estate. The biggest is probably EveryRealm, a digital real estate vehicle that invests in virtual worlds through NFTs. They have raised over $60MM in capital from leading VCs including A16Z, Lightspeed, Coinbase, and Dapper Labs. The company has acquired 3,500+ properties in 26 different virtual worlds. Additionally, virtual real estate brokers are launching to advise buyers on virtual land. They will work with speculators and corporations that want to participate in these virtual gold rush opportunities.
I understand that you might be reading this and thinking virtual land is just plain silly. It’s a fair reaction. Like NFTs, many of these virtual worlds will never build a large, engaged audience, and ultimately their land will be worthless. However, I think it’s highly likely a few will break out and be huge successes, with their land prices soaring. Keep an eye on this fast moving, exciting space.
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