Meta wants in on prediction markets – has it learned anything from the metaverse?

A notable development has hit the crypto markets. The New York Times reported on June 23 that Mark Zuckerberg directed a small team to build a prediction market app, internally called Arena, where users would forecast outcomes in politics, sports, and world affairs using points. The company that renamed itself for a virtual world that has produced nearly $90 billion in cumulative Reality Labs operating losses is now chasing prediction markets, a category with real demand, a proven user base, and enough regulatory complexity to make this either the smartest pivot Meta has attempted or the most familiar kind of expensive mistake. The metaverse bill When Meta changed its name from Facebook in October 2021, Zuckerberg wrote that the company's focus would be to bring “the metaverse to life,” predicting it would reach a billion people within a decade.

Reality Labs, the division tasked with delivering that vision, reported operating losses of $17. 7 billion in 2024 and $19. 2 billion in 2025, bringing cumulative losses to nearly $90 billion.

Market Dynamics

Meta told investors it expects 2026 losses to land near 2025 levels. Horizon Worlds, the flagship social VR platform, was reported in 2022 to have fallen below 200,000 monthly active users after Meta had targeted 500,000 and later revised that goal lower. Meta later moved to phase out the VR version in 2026.

Meta's Reality Labs posted operating losses of $17. 7 billion in 2024 and $19. 2 billion in 2025, bringing cumulative metaverse losses to nearly $90 billion.

Why prediction markets are a different category Kalshi and Polymarket have already pushed combined monthly trading volume to roughly $24 billion in 2026, with current projections putting annual prediction-market volume above $130 billion. Robinhood launched a prediction markets hub in 2025, Interactive Brokers integrated event contracts into its platform, and prediction markets appeared in the Golden Globes telecast. In this landscape, Bernstein estimated in April that the sector could reach $1 trillion in annual volume by 2030.

Market Impact

Meta also has a documented record of copying hot formats and winning through distribution, with examples such as Stories arriving on Instagram once Snapchat had built the format, Threads launching into a market Twitter had owned for a decade, and Reels arriving well into TikTok's dominance. All of these products found audiences because Meta had 3. 56 billion daily active users across its apps as of April, a scale that dwarfs that of any prediction market platform.

Arena's points-first design follows the same playbook of absorbing a behavior users already want, embedding it in the attention machine, and letting reach do the work originality once did. A prediction market app requires software, feeds, identity, moderation, compliance infrastructure, and possibly a regulated partner. The metaverse required custom hardware, immersive content, avatar systems, operating environments, and years of behavioral adaptation.

The losses at Reality Labs show how expensive the manufactured future model becomes. User demand Meta tried to create a new social behavior Users already trade, forecast, and argue over outcomes Product requirement VR headsets, avatars, immersive worlds, operating systems App, feed, identity, points, moderation, compliance Distribution model Requires users to enter a new virtual environment Can plug into Facebook, Instagram, WhatsApp, and Meta AI Market proof Horizon Worlds struggled with retention and scale Kalshi, Polymarket, Robinhood, and Interactive Brokers already show demand Cost structure Hardware-heavy and capital intensive Mostly software and compliance infrastructure Core risk Users never fully migrated Users arrive, but regulators and journalists do too Arena is Meta's second attempt In 2020, Meta launched Forecast, a points-based crowdsourced prediction app focused on current events during the early COVID period. Meta shut it down in 2022, before Polymarket's breakout during the 2024 presidential election, Kalshi's legal victory over the CFTC on election contracts, and the sector crossing $50 billion in annual volume.

Crypto markets are watching this development closely as investors weigh its potential impact on prices.