Meta Introduces $50M Horizon Worlds Fund to Support Struggling VR Studios

Today, Meta made quite the splash by unveiling a hefty $50 million fund dedicated to sparked innovation within Horizon Worlds, which is their own social gaming platform. The timing of this decision coincides with a struggle voiced by many well-established studios that craft stand-alone VR applications for Meta’s Quest platform. According to Meta, these challenges arise due to a shift in the customer base of headset users.

Since the release of the Oculus Rift CV1 back in 2016, stand-alone VR applications have been the backbone of Meta’s VR platforms, consistently attracting a growing number of users over the years. While these individual games and apps continue to shape Meta’s XR narrative, the company is gradually shifting its belief. They now argue that a holistic ‘metaverse’ filled with interconnected experiences is pivotal to their long-term success.

To this end, Horizon Worlds represents Meta’s vision of the ‘metaverse’, acting both as a playground and a content creation platform. Creators not only have the freedom to craft content within Horizon Worlds itself but can also distribute their creations to the sprawling Horizon Worlds community. Given that Meta stands as one of the largest social media entities globally, the social dimension of this platform is undeniably crucial.

However, a significant hiccup has been encountered along the journey. Despite Horizon Worlds being available in VR for several years, it has not quite managed to gather enough users to satiate Meta’s ambitious scale expectations. In response, the company expanded Horizon Worlds’ accessibility to flatscreen devices—phones and computers—with the hope of drawing in more participants. While this widened the viewer base, it also presented new challenges for creators, who now face the task of engaging both VR and flatscreen users effectively.

One cannot ignore that a major hurdle for Horizon Worlds is its content. Why would someone venture into Horizon Worlds if there’s nothing thrilling to engage with? Meta has recognized this and is actively working to lure more creators into their fold, even developing their own games within Horizon Worlds.

A fresh and bold move to further motivate creators was outlined today as Meta announced its $50 million ‘Creator Fund’. This fund is designed to support creators who generate worlds with high visitor rates and retention.

“We’ll be awarding monthly bonuses from the Creator Fund to developers who create captivating mobile and MR worlds. These bonuses are connected to the worlds’ contributions across factors such as time spent, consumer retention, and in-world purchases, providing multiple avenues for creators to optimize their earnings,” revealed Meta in their announcement.

Accompanying this fund is a newly introduced tool—the Horizon Worlds desktop editor. This tool allows creators to take advantage of their computer’s power, facilitating the creation of more sophisticated projects without the need to be tethered to a headset. This new approach is similar to what we typically see with VR app developers who use game engines like Unity for app creation.

Meta is firm on the belief that Horizon Worlds is a cornerstone of their formula for success. The goal is ambitious—to create a social gaming platform as expansive as Fortnite.

Meta’s CTO recently emphasized the crucial importance of the Horizon Worlds mobile version, stating it “absolutely has to break out for our long-term plans to have a chance.”

Despite this boost for creators who support Meta’s vision for Horizon Worlds, it comes during a rocky time for developers of stand-alone VR and MR apps that uphold the relevance of Meta’s headsets. The past couple of years have witnessed Meta’s VR platform shifting focus towards Horizon Worlds, altering the interface and mobile app significantly to highlight Horizon Worlds content, albeit occasionally at the expense of high-quality, stand-alone apps.

Many third-party developers feel that these shifts have undercut their business, which relies on app sales to support and create new content. There’s a sentiment that Meta’s changes are diverting customers away from their previously popular apps to Horizon Worlds, where Meta takes a larger share of the creators’ revenue.

Numerous long-standing studios specializing in stand-alone VR apps have had to make significant staff reductions, attributing their struggles to obstacles on Meta’s Quest platform and broader industry pressures. Meta even shut down one of its own studios focused on producing high-quality VR games.

That said, Meta hasn’t shied away from investing in stand-alone VR games and apps. Over the years, the company has dispensed hundreds of millions for enticing VR content, encouraging indie developers with initiatives like Oculus Start.

Last year saw the creation of a “multi-million dollar” fund to inspire new studios to produce MR content for Quest, mirroring its previous efforts for developers focused on lifestyle apps.

Yet, many developers are uneasy, feeling that despite finding a stable audience, Meta’s fluctuating focus between VR, MR, and Horizon Worlds turns the Quest platform into a volatile marketplace.

Meta counters these concerns by asserting that the misfortunes of some stand-alone VR app developers are less about their pivot strategies and more about a demographic shift in Quest users, who now favor free-to-play experiences over paid environments.

Indeed, the success of ‘Gorilla Tag’ indicates this trend. Despite being ‘free to play’, it’s generated over $100 million in revenue mainly through in-app transactions, illustrating the impact of a low entry barrier.

Similarly, other VR apps capitalizing on the free-to-play model, like Digigods, have witnessed encouraging momentum. The company recently secured $2.6 million in funding, thanks to robust growth through social interaction, free-to-play dynamics, and user-generated content.

Meta assures that paid VR apps remain a vital component of its Horizon platform’s strategy and claims ongoing support for self-contained VR content. However, recent reports cast doubt on these commitments.