Amid mass layoffs, Snap says Web3 is not a priority since it doesn't directly contribute to the company's AR efforts, in sharp contrast to moves by rival Meta
Snap Inc. is sunsetting efforts focused on building products for the much-vaunted next generation of the internet known as web3 …
Context & Ripple Effects
Snap's Web3 retreat is one move in a wider pruning season: days earlier it shut down Zenly, a ~35M-MAU app, to concentrate on Snap Map's 300M+ users, and weeks later it reported its slowest quarterly revenue growth ever while closing a lightly used San Francisco office. The stated logic — Web3 doesn't feed the 'continued investment in AR' — makes AR the sole surviving strategic bet.
The contrast with Meta is the story's tension: Meta kept funding metaverse-adjacent bets through the same downturn, while Snap's later closure of AR Enterprise Services in 2023 showed even the core AR bet was straining under cost pressure, per the FT's account of Spiegel's divisive headset push and senior staff turnover.
First-order effects
- Snap's Web3 team is dissolved and its members absorbed into the layoffs, and any merchant or developer work started on Snap's web3 products loses a supported roadmap.
- Meta's competing metaverse investments now face one fewer social-platform rival allocating engineering and capital to the same next-generation-internet thesis.
Second-order effects
- Snap's talent and partner attention in web3 migrates toward better-funded players like Meta, widening the resource gap the layoffs just widened further.
- With Web3 cut and AR Enterprise Services later shut for cost and complexity, Snap's revenue story narrows to advertising plus Snap Map engagement, raising the stakes on AR monetization actually arriving.
Third-order effects
- If the pattern holds, ad-dependent mid-cap platforms are forced into single-bet strategies — Snap on AR, Meta on metaverse and AI infrastructure — while diversified Big Tech can hold multiple long-horizon theses at once.
- The episode foreshadows a consolidation of 'next internet' ambitions among a handful of balance-sheet-heavy companies, with smaller platforms becoming feature-takers rather than thesis-setters.
The trend: Capital-constrained social platforms are abandoning speculative bets like web3 to concentrate scarce resources on one core bet, ceding multi-front optionality to deep-pocketed rivals such as Meta.