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The Sandbox has sold more than $1.66 million worth of virtual land across the map of its metaverse in the past few weeks.
That’s not a bad accomplishment, considering we’re in the middle of a crypto winter. The company just finished sales of its LAND, where would-be developers purchase plots of virtual space in its metaverse where they can develop games and other attractions.
These plots of LAND exist alongside branded experiences, which suggests that consumers believe in the concept of beachfront virtual property, or the notion that the LAND is worth more if it’s next to something cool. LAND in The Sandbox is transparently represented on public blockchains by Non-fungible Tokens (NFTs), which can uniquely identify digital ownership.
The Sandbox operates on the model of selling valuable real estate where developers can be located near high-value developments, like in the real world. Only the developers (or players) in this case buy The Sandbox’s currency, $SAND, with real money. Then they get NFTs that verify their ownership, and then they go and develop it on the expectation they can make the land more valuable.
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This kind of LAND sale has made $SAND reach a market capitalization of $641 million. That’s lower than during the crypto boom, and yet it’s so valuable that critics have said it’s a crazy price for a company that, like its rival Decentraland, doesn’t have many users and has been dubbed an “empty metaverse.” DappRadar says The Sandbox has about 530 daily active wallets — meaning there aren’t many transactions yet.
But The Sandbox continues to be successful selling LAND. Starting on November 22, The Sandbox put 1,900 virtual parcels up for sale and now it has completed the sales in two chunks of the virtual lands. The Sandbox sells the parcels for a fixed price, and it has artificially limited the number of plots of LAND it will sell to protect user investments. It has also completed two more collections of LAND and sold them out.
This kind of LAND sale has helped The Sandbox expand. It is owned by Animoca Brands and has more than 400 people. It expects to hire 50 or 60 more. This is happening in an environment where FTX has gone bankrupt, with criminal investigations of its founder Sam Bankman-Fried that have cast guilt by association on the entire crypto industry, in the view of some people.
“We are still very excited about being able to feel like the metaverse and making The Sandbox into a Web3 platform,” said CEO Arthur Madrid, in an interview with GamesBeat. “I think people trust The Sandbox as a safe place to create and get into NFTs.”
Madrid and COO Sebastien Borget have been together for 15 years and they have been running The Sandbox for 10 years.
“The Sandbox has an approach where we make the metaverse more concrete and more tangible than anywhere in the world. We link it to LAND sales and have this concept of a map,” Borget said in an interview with GamesBeat. “You can feel the excitement in Turkey, Dubai, South Korea, Hong Kong and more about participating in the metaverse together.”
He added, “Virtual LAND is the simplest way to understand Web3. We are building a neighborhood and a community of brands and users.”
While the world of The Sandbox is still in its alpha stage, the company has made millions from sales of virtual land so far, with brands like Snoop Dogg and FaZe Clan owning land. Paris Hilton has a plot, as do brands like Playboy and The Walking Dead.
Just yesterday, the Council of Fashion Designers of America opened an exhibit in The Sandbox that celebrated 60 years of fashion in America. Dubbed Fashioning the Shades of American Design, the exhibit was curated by fashion historian and assistant curator of fashion of the Cleveland Museum of Art, Darnell-Jamal Lisby. The exhibition features designs from Anna Sui, Zac Posen, Norma Kamali, Off-White and Willi Smith.
Such brands are setting up in The Sandbox as main attractions. They’re are aimed at getting people to buy LAND near such brands on the notion that virtual real estate is valuable. Virtual LAND owners can build on it, use it, sell it or rent it out.
Does it pay off?
Blockchain Research Lab recently did an analysis of the LAND market. It attempted to figure out if high-profile LAND parcels made the surrounding virtual geographic parcels worth more. It looked at the location of the Bored Ape Yacht Club location in The Sandbox and analyzed how much it was worth.
The research, which focused on all LAND sales prior to November 9, showed that the price of LAND has consolidated. During the peak of metaverse hype after Facebook changed its name to Meta in October 2021, the price of LAND skyrocketed.
It peaked at around $12,000 per parcel of LAND in January 2022, then it slid during the crypto crash to around $2,000 to $2,200 per LAND in November. But that price is higher than it was at the start of the market rally, which is a good sign that people understand LAND is an asset class, or an investment that might pay off sometime in the future. Trading continues at a healthy pace.
In 2022, nearly 10,000 digital parcels of LAND were resold in 2022, and resellers made an average return of 109%. Less than half of resales generated a loss, and the median return was 15%. Those who hold LAND for the long term have seen a payoff, the research showed.
About 64% of LAND owners hol only one parcel of LAND, where as 2% of owners hold more than 51 parcels. Over time, the number of active wallets has been increasing and the average holder now has about eight parcels of land. Land distribution has become more equitable over time. And while there is no travel distance in the metaverse, location seems to matter, the Blockchain Research Lab said.
The location of LAND has an impact on the price of parcels. The arrival of Warner Music Group in January 2021 triggered the price of parcels of nearby parcels to go up. It also pays to own LAND next to major brands and artists, the report said. Blockchain Research Lab said that LAND ownership may increase over time and LAND still has large growth potential.
Borget said the latest sale showed the interest in the metaverse is healthy. He said that The Sandbox just passed 4.3 million registered users with a cryptocurrency/NFT wallet.
“We’re actively contributing to the growing adoption of Web3 and provide a destination where users can express themselves and enjoy the benefit of owning their avatar and all their digital goods, thanks to key partnerships, great user-generated content and branded experiences and socialization mechanics in virtual worlds,” Borget said.
Borget said the company is building The Sandbox open metaverse as a global digital nation where each avatar is a citizen and there are regional hubs, places for curated brands and communities that can make the metaverse feel more local.
“The result is we are bridging pop culture, media, music, gaming, entertainment, fashion, lifestyle, sports and more into a new form of entertainment,” he said.
The hope is to create virtual neighborhoods that are adjacent to the brand experiences that shows the value of digital ownership. Of course, it is a good question about whether virtual land sales are slowing down with the crypto crash and the fall of NFT prices in 2022.
In 2021, virtual land transactions totaled $500 million and The Sandbox represented 60% of it, the company said. The Sandbox has sold more than 100,000 LAND plots so far. All told, it has 166,464 parcels.
“We are confident that in 2022, The Sandbox will represent a significant portion of it,” Borget said.
Sometime in 2023, The Sandbox plans to let its 23,000 unique LAND owners open up their lands and publish their own experiences. The hope is that community engagement and monetization will follow.
“Brands are entering every week, and that is very reassuring for the future,” Borget said.
More land sales are coming, with the neighborhoods surrounding brand-owned plots such as Tony Hawk, FaZe Clan, Playboy, The Marathon, Cipriani, TIME, Paris Hilton, L’Officiel, Cut the Rope, Voxies, Dogami, Playground Studio and Hermit Crab. All told there are more than 400 such partners. And there are 230 studios around the world building on The Sandbox, Borget said.
“We are getting closer to opening the LAND and making it available to anyone,” Madrid said.
Each wave will include standard and premium LANDs, and also exclusive larger estates that will be put up for auction directly on OpenSea. One exclusive estate next to Snoop Dogg’s LAND will also be put up for auction on OpenSea, giving users one more chance to be neighbors to the SnoopVerse.
“The Sandbox is building a unique Web3 platform where creators and brands can create a new format of entertainment – the pop culture metaverse – where we offer fun, creativity and safety for fans,” said Madrid. “Bundling these brands together empowers players to buy a LAND to be Paris’ or Snoop’s neighbor or to build an experience close to Cipriani is historic. It offers not only a completely new way to make and play games but also to rediscover our culture together.”
In the California Dreamin’ LAND sale, the company sold 345 LANDs on the map, with 175 first-time buyers. The sales generated $460,000 in sales. Sales of LAND in the Galleria area topped 313 sold at a total price of $419,590. The K-Verse LAND sale featuring South Korean music sold 623 regular LAND plots, 71 premium LANDs, and 25 large estates. All of that sold for $864,000.
Will it be worth anything? It depends on what anyone builds on the LANDs. If those who buy LAND develop games and other fun experiences on it, it will theoretically be worth more later on and they could turn a profit on the investment.
Critics have noted there aren’t many daily active users (DAUs) on any given day. But Borget said the company is still in alpha and the numbers reflect that. He said the company had 30,000 to 40,000 DAUs on the platform, 250,000 monthly active users (MAUs) and 360,000 unique players and 17 million unique visits across 98 experiences in total.
“This is not that low given The Sandbox is still in alpha, available on PC and Mac alone and the number of experiences,” Borget said.
The crowds are pretty good considering The Sandbox’s performance is still kind of slow in its alpha state. Madrid said that during Q1 the company will target faster loading times and better in-game performance. But he said that in-game experiences often run at 30 fps to 60 fps.
Madrid said that users have exchanged eight million chat messages and spent an average of 80 minutes per day on average, with 20 minutes per session.
“These are strong metrics if you compare to mobile gaming or social media browsing,” he said.
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