Investors are ultimately losing interest in metaverses — research

Amid the bear market and the global financial downturn, investors are less and less likely to turn their eyes to metaverses. The investors of Mark Zuckerberg’s company Meta (formerly Facebook) are no exception. The company’s stock price is down more than 70% in 2022. This figure is worse than that of other major tech companies. It seems investors have turned their attention to Meta’s excessive spending on its metaverse. Here are the highlights from a recent study by Kaiko Research.

Meta(verse) drop by 20%

Following Meta’s profit and loss report released this week, it was revealed that it posted a $3.7 billion loss from its Metaworld division in the third quarter of 2022, bringing the year-to-date loss from its investment in Metaworld to $9.4 billion. Following this information, Meta stock fell another 20%. 

“In addition, people are confused by what the metaverse even means. If the company was investing $1–2B per year into this project, then that confusion might not even be a problem,” wrote Altimeter Capital CEO and investor in Meta, Brad Gerstner, in his open letter to the Meta CEO Mark Zuckerberg. 

Zuckerberg’s Meta has invested 10–15 billion dollars in the metaverse and Horizon World (a virtual reality online game). However, according to the Wall Street Journal report, only 9% of the worlds in Meta’s virtual universe are visited by at least 50 people. Most are abandoned altogether. There are now less than 200,000 people in Horizon World. 

In addition, users need Meta’s Quest VR headsets to access the metaverse for $400 or more. Half of the expensive helmets are not used after half a year after purchase.

The bear strode

The other major blockchain projects in the meta-universe, Axie Infinity, Sandbox, Decentraland, and Enjin, are not performing well either. September saw the lowest trading volume on centralized exchanges for AXS, SAND, MANA, and ENJ metaverse tokens, collectively accounting for only about 1% of the daily BTC volume. AXS, the governance token for the Axie Infinity ecosystem, has crashed 91% year to date, 10% worse than fellow blockchain-based game Decentraland. 

“As Axie’s AXS and its in-game tokens crashed in price, users left in droves. As Meta built flimsy avatars without legs in Horizon World, users left. Now with AXS tokens vesting, even the most forward-looking early investors are taking their cash and running. Until we see a product in the metaverse that rivals the likes of Roblox or Grand Theft Auto, investors like Brad Gerstner are well within their rights to demand justification for such heavy investment in the space,” researchers stated.