Four years ago, Mark Zuckerberg’s Facebook unveiled an audacious rebrand and revealed a bold ambition: it was going to start focusing on the metaverse.
The tech giant would now be known as Meta — that’s Greek for beyond, you know — as it shifted its focus from social media to virtual reality.
Zuckerberg was adamant that the metaverse would be the future. The billionaire envisaged a world where we would spend our working days in a digital office, and experience human connection with people thousands of miles away.
But from the very beginning, Meta’s efforts were met with derision… for multiple reasons.
The company’s pivot coincided with major economies coming out of coronavirus lockdowns, with many of us desperate to get out into the real world. Consumers bristled at the prospect of paying top whack for VR headsets.
Worse still, tech journalists weren’t buying it, either.
As New York Times columnist Kevin Roose tweeted all the way back in 2022:
“It’s genuinely puzzling that Meta spent more than $10 billion on VR last year and the graphics in its flagship app still look worse than a 2008 Wii game.”
Undeterred, Zuckerberg continued to throw vast amounts of cash behind his pet project. His company’s metaverse development is based in a department called Reality Labs, which has lost more than $70 billion to date. And with every passing quarter, as the bill grew bigger and bigger, investors became more nervous.
That brings us to now. Bloomberg has reported that the tech giant is planning to slash its spending on the metaverse by up to 30% from next year — and turn its attention to other nascent technologies instead. Some analysts have even predicted that doomed projects such as Horizon Worlds could close altogether.
Wall Street was absolutely thrilled by the news, with Meta’s share price surging higher as the company confirmed that its investments were shifting. But you could argue that all of this was inevitable, with Zuckerberg diverting much of his attention to artificial intelligence instead.
Nonetheless, this is the latest incident where Zuckerberg has painfully retreated from one of his big ideas — and it isn’t the first time it’s been crypto-related.
Facebook (as it was known back then) had also plunged vast resources into Libra, which intended to be a digital currency that could be used by the social network’s billions of users. But the project attracted staunch criticism from the US and EU, who worried about a private company having vast influence over the payments landscape. Although its plans were hastily revised and watered down, they were dropped altogether after a seemingly endless number of rebrands.
In some ways, Libra was quite ahead of its time — especially considering the stablecoin surge we’re seeing right now as regulators catch up. You have to wonder if we might say the same about the metaverse in a few years.
Indeed, there are also close ties between the metaverse and the crypto sector, with many projects setting out a vision of creating decentralized, user-owned economies.
There were dreams of worlds dominated by plots of land transformed into NFTs, with decentralized autonomous organizations established so users could vote on what happens in the future. Play-to-earn was another huge element — with some gamers managing to cover their rent through the income they received — but the tokenomics proved unsustainable.
One of the best-known, crypto-focused platforms was Decentraland. In the heady days of 2021, when metaverse mania was at its peak, one patch of virtual real estate in this online world sold for a staggering $2.4 million.
Fast forward to now, and prices have plummeted — as well as user numbers. Figures from DappRadar suggest there were just 46 unique active wallets over the past 24 hours, with trading volumes of just $10.21. Ouch. Things get worse when you look at Decentraland’s native MANA token. It’s currently trading at $0.15 — down 97.4% compared with where it was four years ago.
Decentraland’s price since launch. Image: CoinMarketCapThe same is also true for other projects such as The Sandbox. Back in November 2021, its native token was 36th in the rankings with a market cap above $6 billion. Now, I hear you ask? It’s 113rd… and down 98.2%.
Zuckerberg’s retreat from the market almost certainly means it’s the end of the road for the metaverse — in Silicon Valley and crypto more widely.
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