Investors shun Meta even as Wall Street predicts massive metaverse growth

The news: Wall Street remains bullish on metaverse-related technology, with some analysts even predicting it could grow into a $13 trillion industry by 2030, per Bloomberg.

Meta’s misses: The initial buzz around the metaverse—heralded as the future of gaming, live events, business and productivity, real-estate, and social networking—has waned considerably as investors take a more sober wait-and-see approach.

• Meta’s stock price has declined by 40% since the start of 2022, and employees say that Facebook’s business is plateauing and that it could be the next Yahoo.
• Meta is also cutting back on investments, specifically for its metaverse VR ecosystem. In context, Meta invested $10 billion in the metaverse last year.
• Former and current Facebook employees told Insider in April that CEO Mark Zuckerberg is interested in little except the metaverse but lacks a coherent strategy for the project he regards as the future of the internet.

Virtual reality check: Despite the red flags, Wall Street analysts see metaverse opportunities as an area for growth. Investors are far less enthusiastic, though, and are holding off on buying into metaverse proponent Meta.

Their cautious outlook is a result of the current era of uncertainty, but it has been exacerbated by Meta’s precipitous drop in value.

• While Meta anointed itself as the company to lead the transition to immersive VR ecosystems, it is quickly becoming clear that no one company can build the metaverse.
• “Competitors that are able to establish practical utility and real-world applications of these emerging technologies will be successful. However, that does not mean that only one company will prevail—there will likely be room for Meta and several others,” said Jordan Yallen, CEO at blockchain company Metatope. 
• “Meta has formidable competition in developing the metaverse as an army of independent, nimble and agile players enter the space,” said Quynh Mai, CEO and founder of Moving Image & Content, a digital creative agency. “Though none can deliver the scale of Meta, they can deliver the experience, community, and creativity.”

What’s next? Mai predicts that, “rather than develop the metaverse in-house, Meta will go on an acquisition spree and buy up companies that are innovating way ahead of them in the space.” 

What’s the catch? The company has historically opted to acquire rather than compete, as evidenced by buying WhatsApp, Instagram, and Oculus. New acquisitions may be unlikely in the short term as Meta struggles to break even. This could lead investors to seek less nebulous metaverse platforms players to invest in.

Go deeper: For more in-depth analysis of the metaverse in tech, retail, marketing, crypto, healthcare, and China read our Metaverse Report.