Metaverse Real Estate Values Drop as Interest Wanes
Brands Exit Metaverse as High Costs and Low Ad Revenue Dampen Enthusiasm
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The metaverse, a virtual world that allows users to participate through augmented reality (AR) and virtual reality (VR) technologies, has seen a sharp decline in interest and investment. Land prices on platforms such as the Sandbox game have fallen by 90%, from $15,000 to $1,500, as average plot prices plummeted.
The decline in interest is attributed to the lack of adequate technological infrastructure required for its functional use. The need for higher bandwidth connections, powerful computers, and advanced AR and VR devices has affected the user experience, leading to a decline in interest.
Ad revenues in the metaverse have also fallen short of expectations, causing brands to reduce their investments. The metaverse had seen a surge in popularity after Facebook's acquisition of Oculus VR in 2014 and the launch of Pokemon GO in 2016. However, the novelty wore off over time, and the interest died down.
Despite the decline in interest, the metaverse still holds potential. Tech giants such as Google and Apple continue to invest in the technology, signaling that there is still room for growth. The metaverse may need to revamp its technological infrastructure and user experience to regain its appeal.
In the past, virtual land sales on platforms such as Sandbox and Decentraland had reached millions of dollars, with a plot of virtual land selling for $2.4 million on the latter platform. Some of the world's leading brands had opened virtual stores in the metaverse, while billboards, product replacements, and brand events were organized in these pixel worlds.
However, the decline in interest has led to investment losses in the metaverse. The metaverse's future remains uncertain, but it is clear that it needs to revamp its technological infrastructure and user experience to regain its appeal.
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