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Metaverse-related tokens such as Axie Infinity (AXS/USD), The Sandbox (SAND/USD), and Gala (GALA/USD) lost as much as 12% on news of the former Facebook’s $10 billion loss, CoinDesk reported.
Meta reported in an earnings release that its augmented and virtual reality division had lost $10 billion. The gaming tokens affected have since recovered their losses despite the dramatic beginning.
Axie’s token dropped below $46
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AXS fell to under $46 in Asian hours. It had been trading over $53 before the gloomy earnings report was publicized, down from an all-time high of $162 in November. According to research from Delphi Digital, the drop in token prices was coupled with falling user activity on Axie Infinity. The game’s native Smooth Love Potion (SLP) tokens were connected to this. Today, SLP surged 20%.
Delphi analysts wrote:
As SLP prices dip, players suffer as they cannot earn as much when compared to a few months back. At its peak, a player could have earned $35 per day on July 21 vs $1 today at current prices (assuming 100 SLP/day). This has led many players to stop playing as the income has been reduced massively.
SAND and GALA lose 10%
After Meta’s report, SAND lost 10% of its value. GALA dipped to $0.18 from $0.20. A broader market recovery helped stabilize both tokens.
The metaverse concept gathered momentum in parallel to the rise of non-fungible tokens (NFTs) last year. Presently, metaverse games continue to cater to a niche in the crypto market, while Meta’s Facebook Reality Labs and other virtual reality divisions accumulate losses.
Do metaverse stocks and metaverse tokens correlate?
According to some developers, traditional metaverse-focused companies’ market performance can cause correlations in metaverse-based tokens. Spielworks CEO Adrian Krion told CoinDesk in an email:
There surely is a correlation between the success of Meta with its metaverse efforts and the perceived potential of metaverse/play-to-earn projects and tokens. There’s been a surge of interest in the space since Facebook’s rebranding, so any setback in Facebook’s metaverse strategy will directly impact the market perception of other metaverses.
Despite the losses, Meta isn’t giving up. According to CEO Mark Zuckerberg, the company will continue working on its AR glasses Nazara and release a high-end virtual reality headset by the end of 2022.