When Meta Platforms’ (NASDAQ:META) CEO Mark Zuckerberg changed Facebook’s name in Oct. 2021, it was supposed to breathe new life into one of the biggest tech stocks on the planet. Unfortunately, that’s not what happened at all.  Since late last year, the stock plummeted from about $320 to a recent low of $88.09. Even now, the stock continues to fall on poor earnings results, with its once-dominant advertising business slumping. Even revenue from Reality Labs fell 51% to $285 million in the latest quarter, with the company warning that losses may only widen over the next year. So far, the company’s investments in the metaverse have been an absolute disaster. One that could have a severe impact on tech stocks, most notably gaming stocks moving forward.

Tech Stocks: Electronic Arts (EA)

Electronic Arts (NASDAQ:EA) is a videogame developer. Waning consumer interest in the metaverse could hurt video game demand. Already, in the third quarter, The NPD Group reported that video game spending fell by 5% to $12.34 billion. Consumers might also find the high price tag for EA game titles another reason to play less often.

EA has key game titles like FIFA, The Sims, and Apex Legends. Gamers spent more money and time playing them during the Covid lockdown. When the business opened up and the pandemic shifted to the endemic, gamers were less inclined to buy EA titles. The company is not immune to the economic slowdown. Customers will have less disposable income as the cost of living expense rises. For now, EA is launching, marketing, and communicating its game title to customers aggressively. Still, if customers do not increase their spending, EA would have to cut its marketing efforts. That would result in lower revenue in the next quarter.

Tech Stocks: Himax Technologies (HIMX)

Himax Technologies (NASDAQ:HIMX) said revenue fell by 49.2% Y/Y to $213.6 million. It has a good outlook ahead, as it expects revenue to grow by 4% to 8% quarter-over-quarter. Himax pivoted its business away from augmented reality and virtual reality. In the third quarter, it developed new AR glasses with front-lit LCoS microdisplays. In addition, it began to ship LCoS microdisplays for a customer that is supplying a hands-free head-mounted experience.

However, the slow uptake of Meta Platforms’ metaverse might indirectly slow the demand for Himax’s AR and VR applications. Still, if the company can convince customers of the value of 3D gesture control on Himax’s WLO technology, it could buck the trend. The company has a collaboration with a leading VR player in the industry. It sees promising progress for volume productions of 3D gesture control in the VR sector.

Tech Stocks: Roblox (RBLX)

Roblox (NYSE:RBLX) is considered a mini metaverse playground for young gamers. In the third quarter, the gaming firm posted revenue growing by just 2% Y/Y to $517.7 million. Roblox still has strong hours engaged and average daily users. Unfortunately, its reliance on the younger age group is a risk factor. Roblox is making improvements to its game engine to keep its 17 to 24-year-old customer base engaged with the platform. It will take more time and more money for the company to attract older players. Roblox needs a transformation in 2023. It depends on customers spending more money and time in its metaverse. If users buy less digital clothing, avatar items, and avatars, that would hurt its revenue growth.

Sea (SE)

Sea (NYSE:SE) runs an e-commerce site called Shopee. It also owns Garena, whose game community growth depends on Free Fire. Weakening engagement for the game in Southeast Asia and Latin America could hurt SE stock. In the second quarter, Free Fire retained its top-ranking position in the above-mentioned regions. Another gaming developer could knock Sea’s app from the top listing in the quarter ahead. For example, Free Fire is showing signs of peak quarterly active users. It reached 619 million in the last quarter. An economic slowdown in the emerging markets would hurt Free Fire’s gross revenue. Players may opt to enjoy the free aspect of gaming. The battle royale mode would sustain active user levels while revenue growth stalls.

Garena, like other gaming firms, could face a decline in gamers after the economic reopening. People would much rather spend money in the real economy than play mobile games. This benefits Sea’s Shopee but hurts its gaming division.

Take-Two Interactive (TTWO)

Take-Two Interactive (NASDAQ:TTWO) plunged to below $100 after posting a weak bookings forecast. Although it reported net bookings growing by 53% to $1.5 billion in the second quarter, the upcoming holiday quarter is a concern. Take-Two expects net bookings in the range of $1.41 billion to $1.46 billion. Analysts expected net bookings of $1.69 billion. Its mobile unit, Zynga, is the likely culprit. After the company paid a massive $12.7 billion for the mobile unit, it likely faces integration costs. Take-Two’s pivot to the mobile gaming industry might hurt its results from here.

Unity Software (U)

Unity Software (NYSE:U) has been in a sustained downtrend since peaking at $210 in late 2021. The stock’s downtrend correlates to Meta Platforms stock. Unity does not have a sustainable business model. Despite growing, its losses continue. It posted revenue growth stalling, up by 13% Y/Y to $322.9 million. Unity expects a non-GAAP loss of up to $89 million from operations. Unity acquired IronSource in an all-stock deal worth $4.4 billion. Management benefited from taking advantage of its higher stock price before the fall. As a combined firm, Unity expects only modest market share gains in the advertising network segment. The slow ad growth will disappoint Unity investors who expected more.

Vuzix (VUZI)

Vuzix (NASDAQ:VUZI) faces macroeconomic headwinds as the e-commerce growth rate stalls. This will weaken demand for its devices as customers slow their deployment. Vuzix is optimistic it could sell a minimum of thousands of devices. However, the double-digit revenue growth still led to a loss. It posted revenue of just $3.43 million. The Q3/2022 EPS was a 15-cent loss. The company depends on engineering services fees to increase its revenue. Corporate customers may indirectly look at the lack of popularity of the metaverse by slowing development.

Demand for Vuzix’s smart glasses could lose any momentum it started building last year. In addition, the Vuzix M400C costs as much as the Meta Platforms Oculus Meta Quest Pro. Customers that are interested in the meta segment might explore Meta’s headset first before considering a Vuzix one.

Vuzix said that military hardware firms could consider its technology. Yet defense spending may peak from here. That would decrease the requests for quotes (or RFQ), further hurting Vuzix’s prospects.

On the date of publication, Chris Lau did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.