The virtual plots of land that Warner or Gucci invested in are now worth 97% less.
It was 2021, the world was struggling to emerge from the pandemic and technology. blockchain It was sold as the future of the internet. At the height of cryptocurrency and the creation of digital art in the form of NFTs, some thought the idea could be given a new twist: Why not use the same technology to register and sell plots of virtual land? When Mark Zuckerberg salvaged a compelling concept from sci-fi novels to name this virtual world and completely rebrand Facebook, the circle was complete. The metaverse had arrived.
For many brands, this was a game-changer. Cryptocurrency is chasing the scent of tulips, and NFT art seems to have no use beyond screensavers, but creating virtual spaces where anyone could collect whatever they wanted was something else. No laws, no building permits, no noise regulations. Music to the ears of some multinationals, it couldn’t be said better: “Here, we will develop sustainable and immersive social music experiences that challenge the constraints of the real world and allow our artists and their fans to interact like never before,” Warner said in January 2022.
The company has just acquired 5.3 million square meters of land in the Sandbox, one of the most famous independent metaverses (not operated by any tech company). Launched in 2012 as a Minecraft-like mobile video game where each player could create their own worlds and experiences using blocks, it was nothing more than that until 2018, when its course changed. It decided to bet on blockchain technology to generate official documents for each of your plots.
It was a trend that some video game developers tried to push (and still do). When Bitcoin went off the rails in 2020 and 2021, Sandbox was in the perfect place. It just needed to open its pockets and let in the mountains of capital that investors were willing to throw at any crypto artifact. The old block video game, transformed into a metaverse, was valued at $4 billion.
According to the production company, Warner’s plot resembled “a beachfront property in the metaverse.” There was nothing bigger, and it was at the center of The Sandbox. It was never revealed how much Warner paid for it, but it turns out that The Sandbox plan didn’t just revolve around the music company and the virtual events they could host. The company used Warner’s announcement to put the entire “neighborhood” surrounding the new site up for sale.
Your metaverse is divided into virtual terrain cells measuring 96 by 96 meters. Warner’s property is 24 by 24 cells, but in those months it managed to convince companies like Adidas, Gucci or Carrefour to buy smaller ones. At the time of Warner’s announcement, each cell cost around 12,000 euros. But the bubble was about to burst.
First it was Bitcoin, and then the entire crypto universe was built around it. Metaverses weren’t left out. Sandbox plots are now worth around €300 each. That’s a drop of more than 97%. It’s not total, thanks to the fact that your base currency is blockchainEther (the second most important cryptocurrency after Bitcoin) has regained its maximum value thanks to the institutionalization of the sector.
Someone thought it was a good idea
How a mobile video game became what Samsung calls a “virtual real estate leader” is hard to understand after the first crypto bubble burst. But it serves as a prescient reminder of the dangers of crypto speculation now that Bitcoin is once again hovering at all-time highs.
“Experiences in The Sandbox include opportunities to participate in limited edition releases, buy and sell land, customize your avatar, interact with other community members, attend virtual concerts, and of course, play user-created games,” Samsung continued in a statement explaining why it invested in the video game.
Today, the situation is very different. There are only about 25,000 lot owners, but walking around the edges of this metaverse, you come across a place full of bizarre and abandoned projects, like Paris Hilton’s Paris World.
“This virtual fairytale landscape of the Queen of the Metaverse invites fans to explore and interact with her in a unique way. Whether you’re a Parisian fan, a fashionista, a dog lover, or a Metaverse enthusiast, Paris World is filled with never-before-seen immersive experiences for everyone!” reads the description of your space in The Sandbox, which hasn’t been updated since its inception.
It’s not the only space in this style. Very close to the one Hilton is promoting is the Playboy Mansion. “Are you looking for the most playful and sophisticated lifestyle in the metaverse? Welcome to the Playboy MetaMansion, home of the future!” reads a sign at the entrance to its six-by-six-cell (300-hectare) property, which suggests it has never been used since the company acquired it.
Next to Paris World is the Gucci site, also six by six cells. The luxury brand recreated an exhibition it held at the London gallery in 2023 during a virtual visit. The real show closed in December, but the one in the metaverse remains anchored until the brand can come up with something better with its story.
Something similar is happening with Warner. After acquiring the mega-solar, it promised concerts by Ed Sheeran or the Red Hot Chili Peppers. Their business plans included selling tickets or virtual merchandising in the form of NFTs without having to take the musicians on tour. None of that happened.
Warner occasionally used its space to program a simple video game. This is the main activity that exists today at The Sandbox, which has returned to its roots. The most popular stories are by video game developers. Outside the house, you can often see “For Sale” or “For Rent” signs on its cells, as well as the company’s own logo, indicating that the property has never had an owner.
However, its creator continues to defend the project’s future. He attributes it to the need for global video games to reward players for their work as “creators” of the experience, just as YouTube pays YouTubers and Twitch pays streamers.
“This new generation of users doesn’t just want to passively consume content, they want to actively participate, create their own character, create their own level, like create their own game mods and change the rules,” he said in a YouTube interview a couple of weeks ago. “Minecraft was sold to Microsoft for $2 billion. It’s a success that the players themselves have achieved, but what have they gotten out of it? “I don’t think it’s brought them any income.”
But even the players themselves don’t seem to buy into the idea. The Sandbox currently has around 100,000 active players and around 5 million accounts connected to cryptocurrency wallets. Roblox or Fortnite, two video games that aim to create their own metaverses with experiences parallel to the game itself, have around 300 and 220 million active users, respectively.
Despite everything, the situation in The Sandbox’s metaverse is somewhat better than that of its main competitor of 2021 and 2022, Decentraland.
Decentraland is a decentralized virtual reality platform created in 2020 on the platform blockchain Ethereum, such as The Sandbox. However, it is even more focused on using the technology and creating its own virtual economy based on events and NFT trading.
When Mark Zuckerberg introduced his metaverse, many users saw it as a modern-day Second Life. In the case of Decentraland, it’s even harder to pinpoint what distinguishes it from that video game, except that its creators aim to ensure that economic transactions are present in every interaction. Its creators have managed to convince Samsung (again), UPS, or Sotheby’s to open stores or “visitor centers” there.
According to Dapp, which measures these types of metaverse metrics, there are currently less than 1,000 transactions per month.
The fall of independent metaverses The Sandbox and Decentraland seems final. What was sold as the future of virtual entertainment and interaction has become a landscape of abandoned projects and broken promises. Thanks to the almost irrevocable investments of both brands and individual investors, the metaverse has become a museum of broken dreams of crypto speculation.