Meta Platforms, the parent company of Facebook, saw the largest single-day slide in market value for a United States company ever with a 26% fall in share prices on Thursday after the tech giant ha revealed disappointing earnings and a decline in daily active users.
Meta famously changed its name from Facebook in late 2021 to signal its plans to focus on the metaverse, and its struggles have coincided with double-digit percentage gains for its decentralized competitors The Sandbox and Decentraland.
Meta reported $33.67 billion worth of total revenue for Q4 2021, compared to $28 billion the year prior. However, its net income decreased to $10.28 billion, down from $11.2 billion 12 months ago.
For the first time, Meta broke out a segment in its earnings report for its virtual and augmented reality research and development business, Reality Labs. It saw losses that topped over $10 billion, up from $6.6 billion in 2020. However, it’s only in the early stages of laying the groundwork for metaverse technology, including developing a haptic glove, which allows users to “touch” objects in the metaverse.
Speaking with Cointelegraph, Animoca Brands chairman and co-founder Yat Siu, suggested that the sharp drop of Meta’s share price may represent a broader trend in which users are beginning to question the centralized Web2 model:
“It’s a system that does not share any meaningful part of the ownership or value of the network, which will eventually lead to a decline as users look for better options.”
“As people are still likely to spend even more time online, the question is where and how? This is an early indicator that they are moving away from Web 2.0 and the logical conclusion on where to go for a growing number is Web3,” he added.
Siu argued that Web2 companies like Meta and Apple are also “losing their best people” to Web3 companies and projects:
“Web 3 and the open metaverse is more than just another product cycle — it’s a movement — and it’s hard to fight something like that as a single corporation.”
Crypto-backed metaverses
Decentraland, a metaverse platform built on Ethereum, has seen the price of its token, MANA, increase by over 20% in the past seven days, surging from a low of $2.19 to recent support levels around the $2.60 mark.
Likewise, SAND tokens for The Sandbox, one of Decentraland’s main metaverse competitors, has seen a seven-day gain of 17.5%, entering the weekend at a low of $3.31 before surging to a high of over $4, now seeing support levels around $3.60.
Related: Bitcoin bounces at $36.6K as Meta adds 20% losses to US tech stock rout
Apart from Meta, other factors are affecting prices for MANA and SAND this week. Decentraland released its 2022 Manifesto, announcing a prototype mobile app, improvements to its play experience, greater utility of nonfungible tokens (NFT) and protocol enhancements.
The Sandbox team announced a partnership with UniX Gaming, a decentralized autonomous organization, and a release of more “land” in its metaverse slated for Thursday.
Animoca Brands owns The Sandbox, and there were unconfirmed rumors earlier this week that Meta would be acquiring the metaverse platform. However, Siu promptly shut those rumors down on Thursday.
There is an unconfirmed rumor that Facebook is about to acquire @TheSandboxGame. It looks like regulation is coming sooner than later to this space... https://t.co/XiAelDoBac
— NFT Ethics (@NFTethics) February 2, 2022
Outside of Meta, other big tech companies, including Apple and Microsoft, are entering the space. Entertainment giant Disney also seems to be gearing up for a move into the metaverse, with a recent job advertisement for a business development manager looking for someone to “help lead Disney’s efforts in the NFT space.”
It’s not immediately clear if Disney’s efforts could relate to its planned headset-free augmented reality metaverse project uncovered by patent filings.