© Reuters. Metaverse visions.. How did competing companies refute the myth of the Facebook company?
The past year has been a challenge for the CEO of Facebook. Meta, Mark Zuckerberg, as the company faced the first decline in its quarterly revenue during July 2022, and the arrival of its market value to 1.1 trillion in August 2021 did not affect its failure to reach this decline.
The drop was followed by another event that unsettled investors: Zuckerberg’s decision to invest $10 billion a year in the metaverse, as the company’s market capitalization plunged 60% by November, resulting in 11,000 layoffs or 13% of the workforce.
Low sales and high morale
And on the first of February, Meta indicated a decline of 4.5% annually in sales for the last three months of last year, but this did not prevent the company’s morale from rising towards the current quarter, and expected revenues to reach $ 28.5 billion,
It is the highest number from the first three months of 2021, that is, before Apple () issued iDevices privacy terms that limited advertisers from tracking customers online.
In the same context, Zuckerberg emphasized the wise management of expenses and ignoring non-profit projects, during which he announced plans to buy Meta shares at a value of $ 40 billion, and at the time when a California judge rejected the Federal Trade Commission’s lawsuits opposing Meta’s acquisition of Inside, which specializes in developing Virtual reality based fitness apps.
$META shares are soaring after revenues topped expectations. Is @Meta’s report the most important of the earnings season? @jonfortt weighs in…twice #OTOH pic.twitter.com/IgUc4pwCfD
— Squawk Box (@SquawkCNBC) February 2, 2023
Meta investors’ response to its upcoming plans
There is a positive reaction of investors to the recent news of the company, as Meta shares rose by 20% after increasing by 70% during the past months, and this resulted in raising the market value of the company to $ 484 billion, to return to the technology giant again.
Mita also found a way to circumvent Apple’s rules in light of its ability to explore more in artificial intelligence, especially the Reels feature that allows video clips to be submitted via Instagram and Facebook, which competes strongly with the Chinese application TikTok.
On the other hand, the TikTok application has gained more popularity, especially among the youth category, as short videos and entertainment content can be created, so Facebook (NASDAQ:) had to find new ways to keep younger users.
As a result, Facebook introduced the Reels feature, which mimics TikTok and integrates videos between Facebook and Instagram.
However, the TikTok application remains a separate platform that does not include what Facebook suffered from, which is the lack of privacy and security, so Facebook had to find a competitive and strong alternative to the Chinese application.
But the China-based company is under US scrutiny, with some lawmakers seeing the app as harming national security.
Difficulties that Meta may encounter
In a related context, there are other obstacles facing the Facebook Foundation, as it has become difficult to predict and analyze the digital advertising market, in light of advertisers’ caution against spending on social media.
TikTok may be subject to more ban calls, but the Washington state legislative action has not been accompanied by speed in implementation.
Another hurdle for the company may be the Federal Trade Commission lawsuit, tough European regulations for digital agencies, and a decrease in the number of people willing to explore the Metaverse world, as evidenced by the lack of users of the virtual reality app Horizon Worlds last year.
Other metaverse worlds are full of players
The Meta company faces the challenges of competition with the Metaverse platforms and worlds, which include billions of accounts for players and fans of the first ten games, as there are 2.5 billion players in these virtual worlds, in a number that exceeds all Facebook, Instagram and WhatsApp users.
$META’s commitment to continue to focus on the metaverse despite a $13.7 billion loss in 2022 shows that Wall Street understands the massive potential of the #metaverse!This is why $FLOKI is building and innovating with its metaverse #crypto game #Valhalla. pic.twitter.com/AmP9TYUWI1
— FLOKI (@RealFlokiInu) February 2, 2023
Tencent rules the digital world
In a separate context, there are 3 virtual worlds; Player’s Unknown Battlegrounds, Crossfire and Dungeon Fighter are the largest in the industry market, these worlds contain 3.5 billion player accounts, belonging to Tencent; The largest in the gaming industry in the world.
The company also owns WeChat, QQ and Spotify applications, which have a social payment system that Meta lacks, in addition to Tencent owning 40% of Epic, the largest online virtual music party manager by the fun Fortnite game for about 350 million players.
Minecraft and Roblox drive perseverance
On the other hand, Minecraft games are known to have 600 million players, which enabled Microsoft (NASDAQ:) to occupy the fifth position in the world in the gaming industry, through the Xbox console, Microsoft HoloLens and its vision of Metaverse, all of which made Microsoft overtake Meta.
Attention is also drawn to another Metaverse, which is Roblox, a strong competitor to Meta, which attracts children between 9 and 12 years old, and this competitor with Minecraft games is expected to pose a threat to Facebook in relying on Metaverse in the future.
While Roblox has grown to be trusted by 60 million daily players, the poor Meta has 5 million users of Oculus, Horizon Home, Horizon Worlds and Horizon Workroom apps, facing fierce competition in the fast-growing industry market, as millions join the Metaverse. Across Minecraft, Roblox, Tencent’s Crossfire, PUBG and Dungeon Fighter.
In addition to the above, Metaverse is built on Unity and Unreal Engines, multi-billion dollar companies that have developed thousands of projects, and Meta developed Meta’s Horizon Worlds using the Unity engine and not the efforts of its team.
Social networks are the key to generating revenue
Whoever looks carefully will find that Meta is facing strong competition with the Tik Tok and Pinterest application, so the first should develop and address users’ privacy concerns and focus on achieving a unique user experience.
Meta has many challenges that must be overcome to reserve a future place in the social media market in light of the dominance of Microsoft, Tencent, Roblox and Unity in the world of Metaverse and the resources and expertise of these companies that enable them to achieve development.
In light of this scene, it has become imaginary for Mita to obtain a market share that represents the lion’s share in the market, and it also needs to increase its revenues through its profitable platforms. Facebook and Instagram to succeed her metaverse vision.