Why Is the Metaverse So Expensive? 6 Important Facts

Why Is the Metaverse So Expensive?

It’s unbelievable that a single plot of land in the metaverse can go for $10,000 or more. How can people consistently cough up such large amounts for something intangible? 

The metaverse is so expensive because people expect to make money there. This revenue may be through advertising revenues earned from virtual places that attract multitudes or by buying virtual assets and reselling them for a profit. This commercial aspect makes the metaverse a costly platform.

There are multiple reasons behind the surge of prices in the metaverse, which we’ll discuss in detail in this article. Read on to see how a combination of speculation, the fear of missing out, and the potential utility of metaverse assets has sustained the upward trajectory of prices. 

Factors Contributing to Rising Costs in the Metaverse

A simplified definition of the metaverse would be “an immersive, virtual extension of the real world.” At least, that’s what aspiring industry leaders like Meta (formerly Facebook) are trying to build. 

One of the real-world qualities that metaverse companies are trying to transfer to this virtual universe is attributing things with a monetary value. In Decentraland, a metaverse game, differentiating your avatar with cool glasses will cost you real dollars. 

At the same time, owning virtual land in a metaverse game like the Sandbox takes real money. 

The price of things in the metaverse, be it land or a fabulous outfit for your avatar, is affected by the following factors: 

1. The Hype Around the Metaverse

The coronavirus pandemic disrupted the real world, pushing people to take more interest in the internet and anything virtual. Suddenly, activities like working from home, attending virtual concerts, and betting in online casinos were gaining tremendous traction. 

Why Is the Metaverse So Expensive?

The cryptocurrency was a significant beneficiary of shifting public attention. For example, Bitcoin became wildly popular. 

As crypto awareness grew, concepts like decentralized internet became more focused. And that’s partly where the metaverse hype started. 

Corporate Interest in the Metaverse

In October 2021, Facebook changed its name to Meta to signify its commitment to realizing the metaverse. 

Since then, other big companies in the corporate world have joined the metaverse bandwagon. Here are some examples: 

  • Samsung. This corporate giant announced the launch of a virtual store in the metaverse game Decentraland. 
  • The Australian Open. This iconic sporting event organized a virtual event in the metaverse to coincide with a physical event. 
  • PricewaterhouseCoopers. This company plans a metaverse-based consultancy service to advise users on the challenges of using the metaverse. 
  • Prager Metis. This company spent $35,000 to acquire metaverse land for a three-story property they’ll use for events and showcase non-fungible token (NFT) art. 
  • Microsoft. Microsoft acquired Activision Blizzard (the maker of Call of Duty) to strengthen its entry into the metaverse. 

These companies and more are positioning themselves to benefit from the metaverse in one way or the other. 

As they acquire assets in the metaverse, they drive up prices. 

For example, to get land in the Sandbox metaverse, you’d have had to compete with large global firms like Adidas and Prager Metis. 

As more companies set themselves up for success in the metaverse, prices may continue to rise. 

2. The Metaverse Offers Advertising Value

Wherever people go, adverts follow. This advert-laden business model is behind the success of modern giants like YouTube and Instagram. 

Experts predict that as the metaverse comes of age, more people will flock there. Experts predict that top-tier companies will conduct their business meetings in the metaverse, a concept  Microsoft Teams are pioneering. Beyond playing in the multiverse, experts predict people will enter the virtual platform to conduct their business.

If the metaverse plays out the way most people expect it to, it will draw a lot of traffic. 

Both individuals and corporations want to be in control of that traffic. And this is driving up the demand for property in the metaverse. 

Take the Sandbox game as an example. Sandbox is selling land in the game. When you buy a plot of land, you can develop a unique gaming experience using readily available tools. The better the user experience, the more players your property will attract and the more monetization avenues you have. 

If you own property at a popular location in Decentraland, companies will pay top dollar to put up a billboard on your property. 

Most metaverse investors want to acquire such property, which plays a massive role in the rising demand and cost of land in the metaverse. 

3. The Metaverse Encourages Speculation

When corporations think of the metaverse, they see an opportunity to market their products to new audiences—like websites on the internet. Others like Facebook and Microsoft are focused on creating software that provides unique value in a bid to serve a new customer base. 

When individuals think of the metaverse, they see an opportunity to make money. The methods will differ from those of firms, but the goal is the same. 

The crypto boom minted numerous millionaires. Those who bought cryptocurrencies like Bitcoin at early stages could sell them for unbelievably high profits. 

The golden age of cryptocurrency may be over. It is impossible to make the sort of profit that early entrants made. 

But another relatively new thing promises spectacular profit—the metaverse. 

People investing in the metaverse compare it to investing in the internet when Facebook was unknown—or investing in Bitcoin when it first launched. 

And a lot of people are buying into the idea that the metaverse is a significant investment. 

As more people join the gold rush, demand for assets in the metaverse increases, driving prices up. The rising costs only reinforce the belief that buying assets in the metaverse is a good move. Consequently, demand rises even higher. It’s a cycle that might not stop soon.

4. The Metaverse Encourages Fear of Missing Out (FOMO) 

There are people with plans to profit from the metaverse. Some want to own property in high-traffic places and sell adverts. Others want to buy land when the price is low, sell it when it is high, and so on. 

Then there’s the second group of people and companies. They don’t have a solid plan for making money on the metaverse. Yet they are buying because they don’t want to miss out on the next big thing. 

This FOMO is the same for individuals and firms. When a firm hears that huge names like Adidas and Samsung are setting up shop in the metaverse, there is the urge to also do something in the metaverse, so they are not left behind. 

Companies that invest in the metaverse could strike gold. And most companies that can spare some money want to be there when someone discovers gold. For example, some view  Microsoft’s entry into the metaverse as a bid to curtail Meta’s potential monopoly. 

The fear of missing out has raised the demand for assets in the Metaverse, which has made them costly. 

Still, for demand to drive prices up, the resources in the Metaverse have to be scarce. How is that possible if the said resources are imaginary? Shouldn’t we be able to make more land in the same way that we can build more websites? 

5. The Metaverse Promotes Artificial Scarcity 

So far, I’ve discussed factors driving land demand in the Metaverse. 

But for demand to drive prices up, the product in question has to be scarce. Otherwise, prices remain low because there’s enough for everyone, no matter how high the demand goes. 

Pioneers of the metaverse, such as Sandbox, realized this and took steps to introduce artificial scarcity. 

The Sandbox metaverse has 166,464 pieces of land. Designers represent each piece of land using a unique Ethereum blockchain token. Sandbox states that the number of pieces of land will remain fixed forever. 

Several metaverse creators are following this model. Another example is Decentraland, which has 90,601 parcels of land

As more people flock to a metaverse that has limited land, the value of each piece of land goes up. 

Thanks to its scarcity, a plot of land in Sandbox was going for $11,000 at the beginning of 2022. 

But there’s another reason why land in metaverses like Decentaland has gone up: It’s useful. 

6. Land in the Metaverse Has Utility 

One of the ways to benefit from investing in metaverse land is by buying it at a low price and reselling it at a higher price. Also, you can sell ad space if you have property at a popular location. These are the most common ways of making money from metaverse land. 

However, there are additional ways to benefit from land in the metaverse. 

Below are some benefits of owning land in metaverse games like the Sandbox: 

  • You can host events and contests. This method earns you rewards and gives you monetization opportunities. 
  • You can create games or experiences on your land. You can then earn tokens by charging for access. 
  • You can vote and influence decisions that impact the Sandbox metaverse. This influence gives you the power to determine the future of the platform. 
  • You can rent out your land to make a passive income. 

Is It Worth Investing in the Metaverse?

Investors who bought land as soon as it was available on platforms like The Sandbox are now raking in huge profits. Back then, when the prices of metaverse assets were relatively low, it was undoubtedly a good idea to invest in the metaverse. But what about now, when prices have gone so high? 

The metaverse is worth investing in even with prices so high. As metaverse platforms like Decentraland continue to attract more daily users, the value of virtual assets like land will continue to rise. Though there is an element of risk, there is also a healthy chance of high reward. 

I’ll briefly review the potential rewards and risks of investing in the metaverse. 

The Potential Reward

Metaverse prices have been on a consistent upward trajectory. 

In February 2021, Sandbox held its first public land sale. A prime plot of land was going for $100, with buyers spending an average of $400. 

In November 2021, the cheapest plot of Sandbox land was going for $15,179 on Opeanseas, an NFT (non-fungible token) marketplace. Most of those selling land on Openseas had bought it directly from Sandbox during their sales and pre-sale auctions.  

In one year, the prices of Sandbox land shot up, allowing investors to make unbelievable profits. 

Experts project that the land price in the Sandbox will continue to increase as more people access the metaverse and landowners continue to develop their plots, adding to the appeal of specific locations. 

If you can get your hands on a Sandbox plot now, there’s a decent chance you will resell it for a lot more money than you bought it. 

However, there’s also considerable risk. 

The Potential Risk

When cryptocurrency was new, its proponents claimed that it would be stable in the event of a market crash. They viewed crypto as a currency that would endure economic downturns, unlike conventional money or other assets like publicly traded stock. 

However, history has proven that Bitcoin and other cryptocurrencies are not immune to the market. 

In November 2021, the price of Bitcoin was at a record high of $69,000. Roughly one year later, in June 2022, the price had plummeted to $18,000

Even now that the value of Ethereum has plummeted, the value of metaverse land tied to Ethereum has dropped. 

Just like Bitcoin and other cryptos, it is likely that the prices of metaverse land will rise to a record high and then crash at some point because of over-evaluation. However, this is not a certainty. And even if the price correction does happen, there’s no telling when it will happen. 

During its monumental climb, Bitcoin’s eventual crash didn’t stop numerous investors from making millions of dollars. The same goes for metaverse investments.

With this combination of risk and reward in mind, an investor’s best approach is to avoid putting all their eggs in the metaverse basket. At the same time, it’s prudent to ensure that you have at least a few eggs in case things go your way. 

Are you interested in learning more about the Metaverse? Read our articles below!
Best Metaverse stocks and projects 2023
Influencer Marketing In The Metaverse – A Handy Guide


Many factors, from the land utility to speculation around rising costs, have contributed to exorbitant prices in the metaverse. 

The metaverse has enjoyed immense public attention, especially since social media giant Facebook rebranded to Meta. This hype and interest expressed by major companies such as Microsoft and Adidas have compounded the fear of missing out, attracting more investors to the metaverse. 

People predict the price of land and assets in the metaverse to continue rising. It’s an excellent opportunity for investors. However, the inherently volatile nature of digital assets poses considerable risk.

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