In March 2023, Stefan Kasriel, head of commerce and fintech at Meta, announced plans to scale back its NFT efforts on his X (formerly Twitter) account.
Since first officially announcing its plans to enter the NFT field in May 2022, Meta has experimentally introduced features that allow some creators and NFT collectors to display and trade digital assets on Facebook and Instagram.
In July of the same year, it expanded support to 100 countries, including Japan, and defined NFTs as "digital collectibles," aiming to be a social media platform where NFT works can be posted easily, and was actively promoting its business in the field.
In fact, in November of the same year, Drifter Shoot, a top creator with 120,000 Instagram followers, published a project on Instagram and the work sold out in just 10 seconds, and it was thought that the platform's NFT trading function was working well.
In addition, NFT holders expected that the introduction of NFTs by a large social media platform such as Instagram would lead to a sudden spread of NFTs.
According to Kasriel's statement, the company is moving to focus on other key areas of the company, such as supporting creators and related business units, but experts and some analysts believe there are other reasons.
One of them is the decline in NFT trading volume. NFT trading volume peaked in early 2022, but some data shows that by September 2022, trading volume had plummeted by more than 98%.
This is seen as a sign of declining interest and market saturation, as the average selling price of NFTs also fell sharply, but these figures may have also led the company to question the sustainability and practicality of NFTs.
Some analysts also point out that this is the result of the company's financial difficulties and its drive to reduce loss-making divisions.
Meta's Reality Labs, a division that works on augmented reality (AR), virtual reality (VR), and metaverse software platforms, has been reporting growing profits and losses, totaling approximately $13.7 billion (approximately 1.8367 trillion yen) at the end of 2022. As a result, the company has already laid off 11,000 employees in November 2022 as a means of reducing operational costs.
It has also been pointed out that the resignation of David Marcus, the former head of the company's payments and cryptocurrency business, may have also had an impact, and that when trading NFTs on the Instagram app, a portion of the revenue must be paid to Apple, and the existence of such fees to Apple was a hindrance.
Mark Zuckerberg, the company's founder, clearly set the goal of "growing the company into a central company in the metaverse," and it is clear that he was aiming to popularize NFTs, which are expected to play a major role in the metaverse world, so the point that the profit and loss of the metaverse business affected the NFT business is convincing.
Regardless of the factors, the introduction of the NFT function that was initially expected of the company ultimately did not materialize.
Premium subscribers of X (formerly Twitter) could set NFTs as their profile pictures, displaying them in a distinctive hexagonal frame, differentiating them from standard circular images.
The feature, which launched on January 20, 2022, also included a verification mechanism to give authenticity and uniqueness to users' digital identities, but support for it has been discontinued just over a year after it was launched.
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