Virtual land rush is driving up the cost of space in the metaverse

Spurred by fear of missing out on the next big thing, large corporations and institutional investors are gobbling up choice digital real estate, with virtual parcels being bought up almost faster than the environments can be created.

Prices for space in the connected virtual- and augmented-reality environments known as the metaverse shot up last year, with sales of digital property hitting $500 million. The trend could make the virtual real estate industry a $5 billion market by 2026.

Many businesses see digital real estate as an opportunity to market their brands and engage with customers. But some observers say the flood of capital, along with bullish forecasts about financial opportunities in the metaverse, indicate a bubble.