Game Theory: Meta/Facebook
I see a lot of misunderstanding about Meta. I’ve never owned it because analysis of their business in the last few years showed that not owning the physical devices could make your software platform susceptible.
(I don’t short companies either, I get scared too even though analysis says I should)
Apple – last year when Apple announced removing the ability for companies to track users, I knew Facebook would drop. Cross app advertising was their cash cow. All due to apple needing more revenue streams. So, advertising is another behemoth apple will try to gain at the expense of other companies (just like music and Spotify etc) (also, apple will definitely one day be broken up – but that’s another topic) this will damage facebooks money printer.
TikTok – user base is slowly being eaten up. Without the power of ads to attract apps to use you as a login, you lose customers and lose users as well.
Ok so what? Game theory time.
Meta verse. Why the rebrand? Meta can’t lose their own strategic moat USERs to other new apps while letting apple/google etc introduce a new device for meta verse applications. Because those meta apps require users and a social network. And with TikTok gaining in users and networks, Facebook’s edge in partnership with apple or Facebook is in decline.
So the only move Facebook has is build there own devices and brand as a meta verse company first.
From a game theory pov this is perfect chess move.
What to watch for? Oculus and other VR/AR adoption. If we see those adoptions double every quarter or year and they’re driven by Facebook user base, Meta is a huge buy. This is because it’s a huge signal in that direction.
They’ll own there own destiny. They’ll print not only in ad revenue but in applications.
Tbh, Facebook should have built a phone or bought blackberry or partnered with a phone maker back in 2010ish. Game theory at the time shows that that’s what they should have done. If they fail, they’ll probably fail as a company.
Disclosure: I own no meta but waiting to see oculus adoption over a few quarters
Submitted February 21, 2022 at 12:36AM by mlamping
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