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Whatever Happened to Meta’s Metaverse? Mark Zuckerberg Still Committed

Published July 27, 2023 12:24 PM
Teuta Franjkovic
Published July 27, 2023 12:24 PM
Key Takeaways
  • With regard to metaverse projects, Meta has already lost more than $40 billion and anticipates further losses
  • As far as Mark Zuckerberg is concerned, “This is the direction the world is going in”
  • The use of metaverse crypto tokens ERC-20 and ERC-721 is one of the driving forces behind the sector growth

Despite a very public shift to artificial intelligence, Meta (META) hasn’t given up on the metaverse.

“We keep making investments in AI. We are still totally dedicated to the Metaverse vision,” Mark Zuckerberg stated in an earnings call.

He added that the company has been working on both of these two major priorities in parallel for many years now, and in many ways, the two areas are overlapping and complementary.

The social media behemoth, however, continues to lose billions of dollars as a result of the endeavor, proving that the focus on the metaverse hasn’t been beneficial. In 2022, Meta’s Facebook Reality Labs (FRL) business, which is in charge of metaverse, lost $13.7 billion on $2.2 billion in revenue, an increase from a loss of $10.2 billion on $2.3 billion in revenue the previous year.

A Comprehensive Roadmap With a Broad Time Horizon

He stated that the company follows a  long-term time horizon for evaluating the return on its investments here, and the Reality Labs portfolio has a lot of different parts across VR, AR, Metaverse, social platforms, and neural interfaces.

“I cannot promise that I will be successful in this wager. I genuinely believe that this is where the world is headed,” he said.

Zuckerberg continued by outlining the many consumer tech trends he has seen, which have led him to predict that in the next years, a more immersive version of the internet will become the standard. He stated that currently there are around a billion or two billion people who wear glasses. In the future, they will all be smart glasses, and Zuckerberg predicts that the time we spend in front of computers and TVs will become more immersive and resemble virtual reality (VR).

“What we’re seeing is richer ways for people to communicate across even the mobile apps that we have going from text to photos to videos, just this continual trend towards being more immersive. All of these trends line up to make me think that this is the right thing. I think we’re going to be happy that we did this,” he said.

Meta Promotes New AI Items

Last month, the company that controls Facebook introduced a number of new AI-related technologies that it intends to introduce across its app ecosystem. These include an AI chatbot for Messenger  and WhatsApp that is comparable to ChatGPT.

Additionally, it has apparently been testing consumer-facing generative AI methods in collaboration with advertising.

It appears that Meta’s shift from metaverse to AI has been successful. Reality Labs, the section where the business’s metaverse plans are housed, would reportedly continue to experience “meaningful” operating losses in the upcoming year.

In addition, the company was questioned about its metaverse goals due to privacy issues and data collection from consumers. On its main social networking site, the company’s reputation for privacy is not excellent.

On a conference call, Zuckerberg remarked of AI and metaverse, “In many ways, the two are interrelated.”

With revenue increasing 11% to $32 billion, Meta’s most recent profits showed a net income for the fiscal second quarter of $7.79 billion, up from $6.7 billion the year before.

Instagram and the other members of the Meta family of applications witnessed an increase in daily active users of 5% and 7%, respectively. According to a research by Similarweb , Meta’s Threads app, which was created as a Twitter replacement, has seen a 60% decrease in active users during its first week.

On Wednesday, the stock ended the day more than 1% higher at $294.47, and it was trading close to $319 in after-hours trading.

State Of Metaverse At the Moment

Nowadays, the term “metaverse” has come to refer to a variety of emerging technologies, including but not limited to play-to-earn (P2E) games, blockchain protocols, and virtual asset ownership.

One of Web3’s defining features is the metaverse. The latter is how the read, write, and own internet that uses user-generated content and blockchain technology evolved from Web1 (read-only internet) and Web2 (read and write internet).

Metaverse Tokenomics In Short

The use of metaverse crypto tokens for participation in the metaverse economy is one of the driving forces behind the growth of the metaverse in the digital asset universe.

Users can use the tokens to provide or receive a particular service and contribute to the creation of decentralized applications for the metaverse.

Like other tokens, Metaverse tokens can conduct transactions almost instantly and are cryptographically safe. The Ethereum blockchain, which serves as the metaverse’s foundation, supports fungible and non-fungible tokens (NFTs) for various transactions.

Tokens ERC-20 and ERC-721

ERC-20 tokens are the most popular tokens in the metaverse. They are fungible tokens that adhere to the fundamental rules for creating any new token on the Ethereum blockchain network as well as the technical requirements for smart contracts. ERC-20 tokens are the ones used to represent the established metaverse ecosystems, including Ape (APE), Sandbox (SAND), Wilder World (WILD), and Decentraland (MANA).

On the other hand, ERC-721 tokens are non-fungible and represent a class of assets rather than a specific type (ERC-20). A standard for NFTs, ERC-721 tokens guarantee a person’s ownership of a resource with their unique value and characteristics, making them non-interchangeable with other tokens.

The Sandbox, a division of the Hong Kong-based game software and venture capital firm Anomica Brands, made the decision to move its smart contract to Polygon last summer in order to benefit from faster transaction times, lower gas costs, a better user experience, and increased scalability. Layer 2 solution adoption in the metaverse is anticipated to continue at a rapid rate, improving ecosystem efficiency through higher adoption rates and consequently higher transaction volumes. Established firms in conventional finance (TradFi) have already taken notice of this.

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