Last updated on November 27th, 2023 at 10:04 pm
Have you ever dreamed of owning a piece of land in a beautiful location, where you can build your own house, run your own business, or host your own events? What if you could do all that without leaving your home, using only your computer or smartphone? Welcome to the world of virtual real estate, where digital land is becoming a valuable and profitable asset in the online gaming industry.
In this article, we will explore how virtual land works, what are the benefits and challenges of owning it, and how you can get started with your own digital property in best free online slots, a new and innovative platform for virtual real estate.
Table of Contents
Real-world real estate vs. virtual real estate
Real estate is one of the oldest and most established forms of investment in the world. People buy, sell, rent, or develop properties in different locations, hoping to generate income or capital gains from their transactions. However, real estate also comes with many challenges and risks, such as high costs, taxes, regulations, maintenance, competition, market fluctuations, natural disasters, and more.
Virtual real estate, on the other hand, is a relatively new and emerging phenomenon that is gaining popularity and traction in the online gaming space. Virtual real estate refers to the ownership of digital land within online platforms or metaverses, where users can create, explore, socialize, and interact with other users in a virtual environment. Unlike real-world real estate, virtual real estate does not require physical presence, infrastructure, or resources. It only requires a digital device and an internet connection.
Popularity surge of virtual worlds and metaverses
The concept of virtual worlds and metaverses is not new. It has been explored and depicted in various forms of media and entertainment, such as books, movies, games, and more. Some examples include Ready Player One, The Matrix, Second Life, World of Warcraft, Minecraft, and Fortnite. However, with the advancement of technology and the rise of social media, virtual worlds and metaverses have become more accessible and appealing to a wider audience.
According to a report by Strategy Analytics, the global revenue from consumer spending on virtual worlds and metaverses will reach $8 billion by 2024, up from $4 billion in 2020. The report also predicts that the number of monthly active users of virtual worlds and metaverses will grow from 150 million in 2020 to 400 million by 2025. Some of the factors that are driving this growth include:
- The COVID-19 pandemic and its impact on social distancing and lockdown measures
- The increasing demand for immersive and interactive experiences
- The growing popularity of gaming and esports
- The emergence of blockchain technology and cryptocurrencies
- The innovation and experimentation of developers and creators
What is Virtual Real Estate?
Virtual real estate is one of the most prominent and lucrative aspects of virtual worlds and metaverses. It is essentially the ownership of digital land within these online platforms or games, where users can buy, sell, or trade their plots using real-world money or virtual currencies. Some of the platforms or games where virtual real estate is a commodity include:
- Decentraland: A decentralized metaverse powered by Ethereum, where users can create and explore 3D content on parcels of land that are represented by non-fungible tokens (NFTs). Users can also monetize their land by hosting events, games, art galleries, casinos, or other attractions.
- The Sandbox: A user-generated gaming platform powered by Ethereum, where users can create voxel-based games or experiences on land parcels that are also represented by NFTs. Users can also earn income from their creations by selling them on the marketplace or attracting visitors.
- Axie Infinity: A blockchain-based game powered by Ethereum, where users can collect, breed, battle, or trade cute creatures called Axies. Users can also own land plots that are part of a virtual world called Lunacia, where they can build structures or resources that can enhance their gameplay or generate revenue.
- Somnium Space: A social VR platform powered by Ethereum, where users can create and explore immersive 3D worlds on land parcels that are also represented by NFTs. Users can also monetize their land by hosting VR events, concerts, art shows, or other activities.
The Business of Digital Land
Virtual real estate is not just a hobby or a game. It is also a serious business opportunity for entrepreneurs who are willing to invest in this emerging market. There are several ways that virtual land owners can make money from their digital properties:
- Buying virtual plots as an investment: Similar to real-world real estate, virtual land can appreciate in value over time due to supply and demand, location, popularity, or scarcity. Virtual land owners can buy low and sell high, or hold their plots for long-term gains.
- Monetizing through advertisements, virtual events, or leasing: Virtual land owners can also generate income from their plots by displaying ads, hosting events, or renting out their space to other users or businesses. For example, a virtual land owner can host a concert, a conference, or a party on their land and charge an entrance fee or sell tickets. Alternatively, they can lease their land to a brand, a game developer, or an artist who wants to showcase their products or services to a targeted audience.
- Real-world monetary transactions from virtual deals: Virtual land owners can also convert their virtual earnings into real-world money by using platforms or services that allow them to exchange their virtual currencies or assets for fiat currencies or cryptocurrencies. For example, a virtual land owner can sell their plot on a marketplace or an auction and receive real money in their bank account or digital wallet.
Potential and Current Market Size
The market size and potential of virtual real estate is hard to estimate, as there is no official data or statistics available. However, based on some reports and indicators, it is clear that the market is growing rapidly and attracting significant attention and investment from various stakeholders.
According to NonFungible.com, a website that tracks the sales and trends of NFTs, the total sales volume of NFTs in 2020 was $338 million, up from $62 million in 2019. The website also reports that the top three categories of NFTs in terms of sales volume in 2020 were art ($120 million), gaming ($94 million), and metaverses ($73 million).
Some of the notable examples of high-profile or record-breaking sales of virtual real estate include:
- In February 2021, a user bought a plot of land in Axie Infinity for 888.25 ETH, which was worth about $1.5 million at the time. This was the most expensive NFT sale ever recorded at the time.
- In March 2021, a user bought a plot of land in Decentraland for 2,772,000 MANA, which was worth about $704,000 at the time. This was the largest land sale ever recorded in Decentraland.
- In April 2021, a user bought a plot of land in The Sandbox for 210 ETH, which was worth about $650,000 at the time. This was the largest land sale ever recorded in The Sandbox.
- In May 2021, a user bought a plot of land in Somnium Space for 80 ETH, which was worth about $250,000 at the time. This was the largest land sale ever recorded in Somnium Space.
These examples show that there is a high demand and interest for virtual real estate among users and investors who are willing to pay large sums of money for digital land. However, these examples also represent only a fraction of the total market size and potential, as there are many other platforms or games that offer virtual real estate as well.
Challenges in the Virtual Property Business
Despite the promising prospects and opportunities of virtual real estate, there are also many challenges and risks that entrepreneurs need to be aware of and prepared for. Some of these challenges include:
- The volatile nature of virtual assets and currencies: Virtual real estate is often priced and traded using virtual currencies or assets that are subject to high volatility and fluctuations. For example, the price of Ethereum, which is used by many platforms or games that offer virtual real estate, has ranged from $90 to $4,000 in the past year. This means that the value of virtual real estate can change dramatically depending on the market conditions and sentiments.
- Technological changes and their impacts: Virtual real estate is also dependent on the technology and infrastructure that support it. For example, changes in network speed, bandwidth, security, scalability, interoperability, or compatibility can affect the performance and functionality of virtual worlds and metaverses. Moreover, new technologies or innovations can create new opportunities or threats for existing platforms or games that offer virtual real estate.
- Legal and security concerns: Virtual real estate is also subject to legal and security issues that can affect its validity and safety. For example, there may be disputes over ownership rights, intellectual property rights, taxation laws, regulatory frameworks, or jurisdictional boundaries between different countries or regions. Moreover, there may be cyberattacks, hacks, frauds, scams, or thefts that can compromise the integrity and security of virtual worlds and metaverses.
To demonstrate the reality and profitability of virtual property as a business project, here are some examples of successful virtual property investors or businesses that have made real money from virtual deals:
Republic Realm: This is an investment fund that specializes in buying and developing virtual real estate in various platforms and games such as Decentraland, The Sandbox, Somnium Space and others. The fund was founded in 2020 and has since acquired over 1,500 land parcels worth over $10 million. The foundation also builds and manages its own projects on its plots such as art galleries, museums, amusement parks and shopping centres.
Anshe Chung: This is the pseudonym of Eileen Graf, who is one of the most famous and richest virtual property tycoons in the world. She started her business in 2004 when she bought her first piece of land in Second Life for $9.95. Since then, she has expanded her empire to over 36,000 plots of land in Second Life and other platforms, and has also created her own company, Anshe Chung Studios, which provides design and development services for virtual worlds. She also became the first virtual millionaire according to BusinessWeek magazine in 2006.
Upland: It is a blockchain-based game that allows users to buy, sell and trade digital versions of real land parcels in San Francisco, New York and other cities. The game uses EOSIO technology to create an NFT for each plot of land that matches its real-world coordinates and dimensions. Players can also earn income from their plots of land by, for example, renting them out or placing adverts on them. The game was launched in 2019 and has since attracted over 100,000 users and generated over $3 million in turnover.
Virtual property is not a fantasy or a game. It is a real and future business front that offers unique opportunities and benefits for entrepreneurs who want to keep up with the latest trends and innovations in the online gaming industry. Virtual real estate allows you to create, explore, socialize and make money in digital worlds and meta universes that are becoming increasingly popular and accessible to a wide audience.
However, virtual property also requires entrepreneurs to learn, research and prepare for the various challenges and risks that can arise in this new and dynamic market. Virtual property is subject to changes and fluctuations in price, technology, legislation and security that can affect its validity and value.
Therefore, we encourage entrepreneurs to be alert and aware of this new and exciting area of business that can open up new horizons and opportunities for them. Virtual property is not only the future of online gaming, but also the future of online business.