Meta shares climb on report of possible 30% metaverse budget cut
Analysis
Price Impact
HighMeta's reported decision to cut 30% of its metaverse budget for reality labs and redirect funds towards ar glasses and ai signals a significant shift in strategy from a major proponent of the metaverse concept. this move, positively received by wall street for meta's stock, could dampen overall investor sentiment for crypto projects solely focused on the metaverse as initially envisioned, suggesting a potential lack of immediate profitability or mainstream adoption for that specific vision.
Trustworthiness
HighThe reports come from highly reputable financial news sources (bloomberg, the new york times) and are corroborated by the immediate positive reaction of meta's stock, indicating market belief in the veracity and significance of the news.
Price Direction
BearishA major player like meta scaling back its metaverse vr investment suggests a cooling of the 'metaverse gold rush' and a re-evaluation of its immediate viability. this negative sentiment from institutional tech could lead to decreased speculative interest and investment in crypto projects heavily branded as 'metaverse tokens,' putting downward pressure on their prices.
Time Effect
ShortThe initial price reaction for metaverse-related tokens is likely to be swift as investors digest the implications of meta's strategic shift. while the long-term impact on the metaverse narrative could be substantial, the immediate price movement will be a short-term market adjustment.
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Stephen Katte 1 minute ago Meta shares climb on report of possible 30% metaverse budget cut Meta is reportedly cooling on the metaverse with planned 30% cuts in its virtual reality research department, Reality Labs, which shareholders seemingly support. Listen 0:00 News COINTELEGRAPH IN YOUR SOCIAL FEED Social media giant Meta is reportedly planning to scale back its metaverse spending by up to 30% and redirect the funds into virtual reality glasses and artificial intelligence. No final decision has been made yet, but budget cuts and possible layoffs are on the table for Meta’s Reality Labs division , mainly aimed at its virtual reality unit, which eats up the bulk of metaverse-related spending, Bloomberg and The New York Times reported on Thursday. The budget cuts could come as early as January, but Meta is planning to redirect the resources to a Reality Labs unit developing augmented reality glasses. Wall Street reacted positively to the news, with shares in Meta (META) initially spiking over 5% when the market opened on Thursday, before settling around the $661 mark to gain 3.4% on the day. S hares in Meta initially spiked over 5% when the market opened on Thursday. Source: Google Finance Meta rebranded from Facebook in 2021 with the ambition of building a metaverse . It has poured billions of dollars into research and development of virtual reality tech, interest in which has slowed down as tech firms look to cash in on the hype around AI. Competition around metaverse cools Meta is taking the axe to its virtual reality unit as part of its annual budget planning for 2026, partly because the anticipated gold rush around the technology hasn’t been as competitive as anticipated. Sources told Bloomberg and The New York Times that in 2021, Apple and Google were furiously working on competing virtual reality devices, but the companies have since slowed efforts, which has left Meta executives feeling less pressure to forge ahead. However, other companies are still working on launching metaverses, with the artificial intelligence startup Infinite Reality acquiring the music-pirating-turned-streaming service Napster in March with plans to add a music-focused metaverse. Related: Metaverse ‘still has a heartbeat’ as NFT sales jump 27% in August Meanwhile, the Donald Trump-owned company, DTTM Operations, filed for trademarks in February , connected with a metaverse and NFT marketplace built around the US President’s brand. Meta all in on virtual reality glasses Meta might be cooling on the metaverse, but CEO Mark Zuckerberg said in a post to his X-like Threads platform on Wednesday that his company is opening a new creative studio within Reality Labs, focused on “design, fashion, and technology.” “We’re entering a new era where AI glasses and other devices will change how we connect with technology and each other,” he said. Source: Mark Zuckerberg “The potential is enormous, but what matters most is making these experiences feel natural and truly centered around people,” Zuckerberg said. “With this new studio, we’re focused on making every interaction thoughtful, intuitive, and built to serve people.” Magazine: When privacy and AML laws conflict: Crypto projects’ impossible choice # Blockchain # Business # Technology # Virtual Reality # Metaverse # Meta Add reaction