Buying Land in the Metaverse

We're supposed to be super excited about the opportunities in the metaverse, or maybe you've heard that it was gen Z who's supposed to be super excited about opportunities in the metaverse. Yeah, about that not quite turning out that way.

Despite the hype and the fact that entities is different as Snoop Dogg himself, and for reasons not entirely cleared me, the Beijun government boils into said hype, Owning a property in the metaverse hasn't turned out to be a winning investment strategy for everyone, and yet despite falling prices and declining user activity, some people are still betting on virtual property. For more on Who's building what in the Metaverse, I'm

joined by Bloomberg reporter call I wanna. There's a fixed plot of land, so there's certain levels of values that are attributed to that, and it's your individual plot. It's your n f T. Carly, Welcome to the podcast. Tell us what you do? I cover crypto at Bloomberg News. How's that been? It has been fascinating, to say the least. It's odder than I would have expected coming in. It's diplomatic,

yes when you say odd. One of the stories that you published recently is about Virtue to all Land, which to me seems like a contradiction in terms, but to some people seems like a worthwhile investment opportunity. What did you find in the course of reporting that story. Yes, I found out a lot. I think the most surprising

thing I found out was that it's very expensive. You know, people will spend thousands and thousands of dollars to buy these virtual plots of land in the metaverse, and a lot of them are looking at it as an investment opportunity. They think that these plots of land are actually going to increase in value significantly, and so they're willing to shell out for it, despite the fact that over the past year, values have really dropped off. When you say

values have really dropped off, like what kind? And you say expensive, like what are we talking about here? We talked about five five million dollars, Like what's the range? Right? Yeah, so it varies. I talked to one guy, for example. He told me that he had bought a plot of land in one of these virtual worlds. It's called the Central Land, and he purchased it for about three thousand dollars in August. Um. I talked to a guy last year, though, who kind of in the fall, purchased something that was

sixty dollars. And granted that was a bigger plot of land, but you know, the prices on these really do vary. And part of the reason they were so much more expensive last year was because, you know, these virtual plots of land I should mention too, are often denominated and sold in cryptocurrencies, so their values are inherently tied to that. Last year crypto prices were a lot higher than they are right now, especially you know, in the October time frame.

So the guy who bought the plot of land, you know, the value of that sixty thousand dollar estate as it is called, is a lot less. Now today, what do you do with the sixty dollar virtual plot of land? Exactly? That is a golden question. You know, a lot of the people who I spoke with and even just kind of walking around these worlds, you know, there's not that much going on. So going back to the guy who purchased the plot of land in August for three thousand dollars,

he is years old. That was his first quote unquote real estate purchase, if you will. And he actually has done nothing with that plot of land. He doesn't really have any specific plans in the future to do anything with it. Right now, he rents it out. He rents it for fifty to seventy dollars a month to a company. And on the plot of land there is a billboard that is touting a a metaverse marketing startup, which is

very meta in my opinion. So and when I reported, you know, I would go into these lands that you can access from a web browser and you walk around, and you know, give or take, there's not that much going on. There's kind of you know, some areas are more populated than others, but a lot of these people are betting that these virtual realities really will take off

and they will become cool and popular and fun. Okay, I don't know if I would describe any of this as either cool or fun, and it would seem from the user numbers, because you know, you mentioned to Central and another big one of these is the Sandbox. They're not necessarily popular either. Our colleague of Miller, who's regularly on the podcast, in a story that she published closer to the end of October, said that the Sandbox has about five hundred daily active uses. That's not a lot

of people in these particular environments. So, you know, various of these places were sold as this is going to be a place to hang out. This is like Mark Zuckerberg's whole thing. You'll do anything that you want to do in the metaverse. But what they're turning into is almost like desolate strip malls where there isn't a ton of activity. There's weird inception e billboards, but not a

lot of happening. When you ask the folks in the story who were continuing to buy land why they're optimistic about the future of these platforms, what did they say? A lot of them really bet that at some point these lands are going to become more popular there's a lot of risk associated with that because there are so many of these digital worlds. You know, we kind of focused on two of the biggest ones being Sandbox and

decentral Land. Part of the reason that those are kind of getting a lot of attention and are more popular is because they're the ones that have gotten a fair bit of traction off of one of the things that causes them to have higher property values, which is celebrities and companies and brands that are taking interest in the metaphors. So granted this is not a universal thing. There's still lot of room to go, but there have been some companies and brands that have purchased land in the metaverse

or otherwise made investments or marketing campaigns there. So, for example, Gucci has purchased an estate in the metaverse, and they're going to be able to have some sort of events that they're going to put on on the celebrity front, you have Snoop Dogg has purchased land in the metaverse.

I've got my Monuma money and my money only I built the whole metaverse called you know what I'm saying to STANDBOXXM and you know that then makes other parcels and plots of land that are around them go up significantly in value because the assumption and the bet here is that, Okay, if you own land that's really close to Snoop Dogg, you're going to be in a cool part of town where more people are going to be

walking around. You know, if you're near a really cool fashion brand store, people are going to be walking in and out of those districts and they're going to see your area, and you're going to have a highly valued property. You know, there's a taco Taco bell is having a wedding in the metaverse soon. There's all sorts of weird and kiki things going on, and they are they are disparate, But these people who have bought this land are betting

they're going to become more common. I spoke with one guy who he wants to set up a virtual furniture store in the metaverse, and he wants to hold onto his plot of land so that then he can eventually be able to do that. So it's kind of a bet overall. But other people have, you know, entrepreneurial aspects and kind of interest themselves. I'm just gonna say a couple of like nineties kid things as a as a

nineties kid one. Anytime I have people talk about Snoop was like this like cool childred, I am reminded that this was also a dude who became famous for seeing the song Murder was the case that they gave me. So so you know, just putting that out there, like you know, Martha Stewart, Snoop and Stoop of the nineties

are two very different people. But I also I'm a person who played the SIMS and Second Life, which was, for all intents and purposes, one of the very earliest of these kinds of metaverse like experiences where you have an avatar and you had brands that showed up in these spaces and you have like the Microsoft's of the world and the royces Is of the world. Royce's had a bureau in there, the you know, like various tech companies would sort of set up you could like buy clothes.

And there are still people I don't know if they're still brands who are in Second Life, but like every generation gets the metaverse it deserves. I suppose one of the things that strikes me about the biggest difference between these current meta verses and places like Second Life is what you identify, which is the prime refocused being like the potential for monetization. Right. Second Life absolutely had monetization.

It had enough to have a bank run, which is a pretty good indicator that there was a real financial ecosystem, but it wasn't pitched as come hand, make your fortune speculating. And a big criticism of Web three has been around the idea that profits come before fun. Did the people that you spoke to sound like they were having fun? I think the best way to answer that would be going back to the fact that not a lot of

them had done much on their land. That's not to say that they didn't have ideas to do stuff on the land, for example setting up a furniture store or other endeavors like that, but the bottom line is that they hadn't yet. I think one of the things that we've reported on a Bloomberg is that, you know, gambling and casinos have been popular for terms of entertainment that have taken off in these worlds, but yeah, they're not seeing this as a fun place where they're hosting parties

with their friends. I talked to a professor who said that, you know, in some ways. Buying land in the metaverse is a way to diversify your crypto holdings, because even though it's a little bit different than buying bitcoin, I mean, it does kind of come with this promise of an online experience that you would assume comes with some sort of promise or hope for fun. At the end of the day, they're denominated in crypto, their prices are at

least right now somewhat moving with cryptocurrency. Exact, a pot of land in the metaverse is a non fungible token, yeah, exactly. So that's a little bit of a distinction too, is that when you buy these, you know, it's recorded on the blockchain. It is its own separate thing, and these plots of lands are fixed. That's another thing that is going to appeal to a lot of the buy areas.

That's not like ubiquitous across virtual worlds, but that is a big selling point is that there's a fixed plot of land, so there's certain levels of values that are attributed to that, and it's your individual plot, it's your n f T. So these individuals who are buying these lands, yeah, they might not be doing much on them now, but they're thinking they will in the future, and I would assume that if more activity comes to the metaverse, that

would increase the chances that they actually do set up their virtual furniture store. With the reports of places like Sandbox only have active users, the investors in these platforms say very similar things to the folks that you're talking to who are buying land. So yeah, so of anamoca.

You know, made the case to our colleague Hannah Miller that like looking at just daily active users is not really as he described it, like representative of the overall scale of activity, like he has amazing quotes, which is to look at this metric would be comparable to claiming that how many people trade on Wall Street is the

size of the American population. And you know, from his perspective, what you need to look at is things like revenues that are being generated and other opportunities that people have, which sounds very much like what you're also saying. I think the challenge for a lot of folks is if the speculative asset isn't currently delivering returns to them, if there doesn't seem like very much to do right now, holding onto their attention can be a little bit hard.

You know, so the folks who you spoke to, how many of them see like the this activity is going to pick up in the next six months, the next five years, Like what's the time horizon that's they're talking about. Oh gosh, it's so hard to say. I think the other distinction here is that there are dozens and dozens of these virtual worlds. So you know, the sandbox might be the thing today, but that's not to say that another one won't come in and completely take its place.

So when you buy these lands, not only are you taking a bet that the metaverse will become cool and popular, you're taking a bet that you were specific chosen digital world will be the one that is cool and popular. So this isn't like a, oh, in twenty years, this will be the thing. It's kind of more of a right now, you're assuming that this will be the thing.

Like I talked to one guy who I mean he's bought He's diversified his diversified crypto holdings in the metaverse by purchasing land in a variety of different virtual worlds. I mean, he has dozens of plots of land. So it's kind of a question of all right, you're choosing one digital world, but you're also choosing that digital world among several other options that you could possibly have. Right, It's like, you know, ten years ago nobody thought TikTok

was a thing, and now TikTok definitely a thing. Will it still continue to be one in ten years from now? Up next more from Bloomberg report to Collie Wanna on buying land in the mesa Verse. We'll be right back. I think one one of the things it's often helpful for us to remember is that at its hots, the dynamics and crypto are a tech story, and they're a lifestyle story and their culture story, and they're not just

always a monetization or financial one. When you were reporting this, did you how much time did you have to spend in these worlds? I spent a fair bit just walking around. There's a games reporter at Bloomberg who Cecilia. She is great, She is so cool. She showed me kind of the ends and the outs of these worlds. And I will say when I walked around, I would get forward a

little bit fast. I'm not that in to gambling in casinos, but it was fun to just kind of get in your little avatar and pull up the browser and just run around a little bit in the world. I also enjoyed in talking with my sources. I asked them for for photos of their avatars on their plots of land. I'm a reporter. I'm very used to people not being comfortable giving you photos, and I guess maybe it's a

little bit different if it's your digital avatar. But they were excited, like they love their avatars, they love their plots of land. They were happy to share them. One even said, like he sent me one during the daytime, and then he circled back later in the day after he emailed me and said, oh gosh, like I realized that that picture isn't like the best, I'll send you another one, And so he sent me a different picture to like cover the basis. It was just nice, like

they enjoyed and we're very proud of it. So, you know, I got bored in these lands, but it does seem like some people are very, very, very very excited about them. I will say that really reminds me of kind of playing SIMS, where, you know, since it's a game, as opposed to sim City, where you design an entire ecosystem and sims, you like control little folks that are called sims. And I was certainly a person who would spend so much more time just like designing the sim and then

never doing anything. I was like down to like the eye color and the outfits I once recreated, like the j Lo dress, and I was like, it took so long, and then I'd be like, okay, cool, like let me move on to creating another one and continue to do nothing else. So I I understand being proud of of one's digital personas. Yes, it is. It is a real thing. Thank you so much, Carly, appreciated having you on the show. Yeah, absolutely,

thank you so much, y'all. You can find more of Carly one as reporting on the Bloomberg Terminal on Bloomberg dot com, or follow her on Twitter. She's at Carly d Wanna. That's c A r L Y d w A n n E. This is Bloomberg Crypto, a daily podcast from Bloomberg and I Heart Radio. For more shows from iHeart Radio, visit the I Heart Radio app, Apple Podcasts, or wherever you get your podcasts. Send us your comments, questions, or suggestions for the show to Crypto at Bloomberg dot net.

The supervising producer of Bloomberg Crypto is Vicky Very Galina. Our senior producer is Janet Babin. Our producers are Mohammed Faruk and Sharon Barriro. Our associate producers are Ty Butler and Moses on Them. Desta wonder At is our engineer. Original music by Leo Sidrn. I'm Stacy Marie Schmal We'll be back tomorrow.