Meta Platforms Inc. is reportedly planning a drastic strategic pivot, with plans to slash spending on its metaverse division, Reality Labs, by up to 30% as part of its 2026 budgeting cycle. This marks one of the company's most significant strategic shifts since its 2021 rebrand from Facebook. Mizuho analysts described Reality Labs as an "$80 billion black hole" of cumulative operating losses and argued that such cuts would immediately strengthen Meta's earnings profile.
Analysts estimate the reductions could add roughly $2 per share to Meta's 2026 earnings, reiterating an Outperform rating with an $815 price target—a more than 21% jump from the current stock price of $672. A bull case tied to faster AI-led growth sets a target of $1,245. The move follows increasing investor pessimism and internal warnings; a leaked memo from Meta Chief Technology Officer Andrew Bosworth earlier in 2025 stated that mixed-reality efforts were entering a make-or-break phase.
The broader crypto metaverse ecosystem has collapsed in tandem with Meta's struggles. According to CoinGecko data, the entire metaverse-token category is now valued at under $3.2 billion, down from more than $500 billion at the start of 2025. Tokens tied to virtual-world platforms have shed nearly all their value from their early-2025 peaks. Render has fallen out of the top 100 digital assets, while The Sandbox and Decentraland are trading near record lows.
Decentraland's native MANA token is currently trading at $0.15, down 97.4% from four years ago. DappRadar figures show the platform had just 46 unique active wallets in a 24-hour period with trading volumes of only $10.21. The Sandbox's native token has fallen from 36th in market cap rankings in November 2021 (above $6 billion) to 113th, down 98.2%. This downturn reflects a broader failure of the play-to-earn model and NFT-based virtual land economies that many crypto metaverse projects were built upon.
