Meta Removing NFTs is Fatal ❌
A year of research and experimentation has led Meta to discontinue its NFT project.
Meta Cuts NFTs
Meta has decided to discontinue its NFT project on Facebook and Instagram after a year of research and experimentation. The announcement, made by Stephane Kasriel, head of commerce and financial technologies at Meta, indicated that the company plans to focus on alternative ways to support creators, users, and businesses. Meta's NFT experiment began with Instagram's support for NFTs in May 2022, which then expanded to Facebook. Despite the end of NFT support, Meta intends to prioritize helping users connect with fans and monetize content. The decision has been criticized by some in the NFT community, who considers Meta's approach "shortsighted." This news also comes amid a period of turmoil for Meta, which plans to cut an additional 10,000 employees following an initial layoff of 11,000 in November.
Massive Layoffs
Meta announced plans to lay off 10,000 more employees and incur restructuring costs of $3-5 billion, as CEO Mark Zuckerberg aims to make 2023 the company's "year of efficiency." This comes after the November layoffs that affected over 11,000 workers. As part of the restructuring, Meta intends to flatten organizational structures, cancel low-priority projects, reduce hiring rates, and close 5,000 unfilled open roles. By cutting underperforming projects and removing middle management layers, Zuckerberg hopes to speed up decision-making and better prepare the company for potential long-term economic instability. Despite these cuts, Meta continues to invest heavily in the development of virtual and augmented reality technologies for the metaverse.
Is Meta Doomed To Fail?
Meta's recent decisions have been criticized as clumsy and short-sighted, as many creators are flocking to other platforms such as Sandbox and Spatial instead of Horizon Worlds. By abandoning NFTs, Meta is left to compete with Fortnite, Roblox, and The Sims for virtual downloadable content, which may not be an easy feat. Furthermore, Meta didn't explore the potential of NFTs beyond profile picture integration and had previously attempted to win over creators with little success compared to YouTube. This decision is disappointing for partners like Polygon and Arweave, but they are expected to survive.
In contrast, true web3 companies now have a significant advantage in capturing creators' attention. HTC Vive and Pearly Chen stand to benefit greatly, while Ready Player Me's avatars are likely to become more prominent. Amazon's NFT marketplace, supported by Avalanche and Shopify, could dominate the sector. VeVe's VeVeverse may become the preferred social hub over Horizon Worlds if they leverage their Disney partnership effectively. Additionally, Meta's lack of focus on music will continue to benefit competitors like TikTok, Spotify, Gala Music, Audius Project, and Anotherblock. Finally, the fashion industry has seemingly been handed to NFT-friendly platforms like Snapchat, RTFKT, and DressX.
In Conclusion
The recent developments and decisions made by Meta may prove to be a significant boon for web3 companies and platforms. As Meta steps back from NFTs and related technologies, it leaves a gap in the market that web3-focused organizations can capitalize on. This provides an opportunity for these companies to attract creators, establish dominance in their respective niches, and accelerate the growth and adoption of decentralized technologies. Ultimately, this turn of events could serve as a catalyst for the expansion of the web3 ecosystem, driving innovation and fostering a more diverse digital landscape.
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