The billionaire CEO of Meta Platforms’ faith in the crypto industry remains intact. But does he really have a choice?
Mark Zuckerberg, CEO of the social media empire Meta Platforms (META) – Get Meta Platforms Inc. Report, strongly believes in the metaverse, an immersive virtual world in which people will interact using digital avatars.
In this virtual world, which is Meta’s next big thing, non-fungible tokens (NFTs) will undoubtedly play an important role. NFTs are a way of asserting ownership over a piece of online content, like a photo or recording. While NFTs were the hot buzzword from the beginning of the year (because of Fear of Missing Out, or “FOMO”), they seem to have lost their luster.
The NFT market is cold. Trading volume on OpenSea, the Amazon of NFTs, is down 99% in just under four months, according to DappRadar. Where the platform was processing a record $2.7 billion in NFT transactions as of May 1, the marketplace only recorded $9.34 million on August 28. Prices have also collapsed.
Currently, luxury companies like Chanel and Gucci have taken over NFTs, which are also an effective way to retain customers and create unique loyalty programs. Indeed, NFTs allow the world of luxury to recreate an impression of belonging to a select circle, which is in line with the image conveyed by luxury.
The very discreet and elegant French brand Hermes has also just filed a trademark application to the United States Patent and Trademark Office (USPTO) to protect downloadable software to view, store, and manage virtual goods, digital collectibles, cryptocurrencies, and NFTs “for use in online worlds.”
It makes sense to see the French luxury house want to give buyers of its very popular Birkin bag the feeling that they belong to a very distinguished and rare club by offering them to create an NFT of this bag or its famous silk pluggers.
Zuckerberg Reclaims NFTs
Hoping to encourage the very same air of exclusivity, Zuckerberg wants to reclaim NFTs and encourage the masses to adopt this important piece of this metaverse that he is trying to sell us at all costs. Meta has just announced that after Instagram, Facebook will welcome NFTs.
Users will be able to share their certified images on their profiles. As on Instagram, the images will look like any publication with the addition of a small badge stamped ‘Digital collectible’ at the bottom left to differentiate them. You will also need to connect your virtual wallet to one of the two social networks so that you can then use it on the other platform.
With its 3.65 billion users as of June 30, Meta hopes to revive interest in NFTs and make money. It is not sure that the company and its billionaire CEO will succeed. To begin with, they would have to prove that the value of these digital collectibles is not based on pure speculation.
The big problem with Zuckerberg and his metaverse is that sometimes it feels like he has no choice but to cling to this bet which for the moment is far from paying off. Reality Labs, the division that houses Meta’s metaverse projects, recorded a second-quarter operating loss of $2.81 billion. In the first half, losses amounted to $5.8 billion. In all of 2021, Reality Labs had a loss of $10.2 billion.
The Big Test Is Ahead
Some projects related to the metaverse, including virtual reality headsets, have already had some success. The Meta Quest headset sold 8.7 million units in 2021, indicating that virtual reality (VR) has an audience beyond the videogame-centric base for which it was originally created.
In October, Meta will launch its new virtual reality headset that will replace Quest 2. Named Project Cambria, it was announced in October 2021 and promises to mirror users’ facial expressions in VR for a more realistic metaverse experience. It is specifically designed for work use.
Speculation is rife about this headset as rumors say it will be marketed as the Meta Quest Pro. It would have eye and facial tracking which would sync it to people’s avatars in real time. The new headset could also transform the environments around you into virtual ones. If these features are confirmed, perhaps it will really be the beginning of the virtual social interactions that Zuckerberg has been trying to sell for months. There is no doubt that such originalities would arouse curiosity.
“I think people are going to be pretty blown away by this,” Zuckerberg told analysts during Meta’s second-quarter earnings’ call in July.
Let’s even say that he keeps his promise of innovations, what will be the price of this headset? Rumor has it $1,500. If this price is confirmed, it is very likely that the masses, faced with an inflation that currently affects every product of daily life, will shun the headset… at least at the beginning.
There lies the first real test if he wants to save NFTs and, in passing, his bet on the metaverse.