Meta Launches $50M ‘Horizon Worlds’ Fund to Support Struggling VR Studios

Meta has just introduced a $50 million initiative aimed at stimulating the development of new and enriched content within Horizon Worlds, the company’s premier social gaming platform. The announcement comes at a time when many established studios producing standalone VR experiences for the Quest platform are facing sustainability challenges, partly due to what Meta identifies as a shift in the demographics of headset users.

Since the debut of Oculus Rift CV1 in 2016, standalone VR applications have been integral to Meta’s VR platforms, significantly contributing to the expanding user base over the years. Although these standalone games and applications remain a significant aspect of Meta’s XR platform, the company is now focusing on creating a comprehensive ‘metaverse’ of interconnected experiences, which they believe is crucial for their success.

Horizon Worlds represents Meta’s experimental leap into crafting this ‘metaverse’, functioning both as a playground for users and a creation platform. Within Horizon Worlds, creators can design and share their content with the broader community. Given Meta’s foundation as a leading social media giant, the inherently social aspect of Horizon Worlds is key.

Despite being available on VR for several years, Horizon Worlds hasn’t yet achieved the widespread user engagement Meta aims for. Consequently, they have expanded Horizon Worlds to non-VR devices such as phones and computers to attract more users. While this move is likely to increase the audience, it also poses new challenges for creators, who now must cater to both the immersive capabilities of VR and the more conventional flat-screen platforms.

One significant hurdle for ensuring that users are drawn to Horizon Worlds and keep coming back is the availability of compelling content. If there aren’t engaging activities with high replay value, the incentive to explore or revisit Horizon Worlds diminishes.

Meta has been proactive, drawing numerous creators to the platform and developing several first-party games within Horizon Worlds. Now, with the establishment of a $50 million ‘Creator Fund’, they are offering substantial financial incentives to creators whose worlds attract frequent visits and user retention.

The company elaborates, “Every month, we will distribute bonuses from the Creator Fund to those who craft engaging mobile and MR worlds. These bonuses will be based on the worlds’ contributions via time spent, retention rates, and in-world purchases, providing multiple pathways for creators to enhance their earnings.”

In conjunction with this fund, Meta has also launched a new development tool—the Horizon Worlds desktop editor, which empowers creators to undertake more ambitious projects using their computers, reminiscent of the typical workflow for standalone VR app developers who usually employ engines like Unity.

This strategic move underscores Meta’s increasing belief in Horizon Worlds as pivotal to its future in the social gaming landscape. Whether in VR or not, Meta’s goal is to establish its version of Fortnite—a platform that combines social interaction with enduring player engagement.

As emphasized by Meta’s CTO recently, the success of the mobile version of Horizon Worlds is deemed crucial for realizing their extensive aspirations for the platform.

Although this new $50 million creator fund offers exciting opportunities for creators who share in Meta’s vision for Horizon Worlds, it coincides with challenging times for developers of standalone VR and MR apps that have long maintained Meta’s headset relevance. Over the last couple of years, Meta has shifted its VR platform strategy towards prioritizing Horizon Worlds, even going as far as overhauling the headset interface and mobile companion app to highlight Horizon Worlds content, at times sidelining high-quality standalone apps.

Developers of such standalone apps express concerns about these changes, fearing that Meta is diverting customers away from their applications to Meta’s sub-platform, where an even larger chunk of the revenue is claimed by Meta.

Many well-established studios that have produced acclaimed standalone VR apps are being forced to significantly downsize their operations, attributing these actions to sluggish performance on Meta’s Quest platform and greater upheaval within the gaming industry. Notably, Meta has shuttered one of its own studios that focused on high-production standalone VR games.

Despite these challenges, it’s notable that Meta has historically invested considerable resources into developers of standalone VR games and apps. They’ve allocated substantial funds to inspire engaging VR content and have supported indie developers through initiatives like Oculus Start.

Further investment was seen last year when Meta launched a “multi-million dollar” fund to attract newcomers into creating MR content for Quest and another aimed at developing ‘lifestyle’ applications for Quest headsets.

Nevertheless, developers often feel that despite gaining an audience, Meta’s persistent shifts—whether VR to MR or towards Horizon Worlds—render the Quest platform unpredictable and hazardous for business.

Meta argues that the declining prospects for some standalone VR app developers result more from changes in Quest user demographics, who now show a growing preference for free-to-play apps rather than paid ones.

There is evidence to support this. Gorilla Tag, although a free-to-play title, has generated over $100 million in revenue through in-app purchases, attributing its success to its low entry barrier which helped to build a large player base.

Similarly, Digigods, which raised $2.6 million in funding, is riding the positive wave of the free-to-play and social dynamics model.

While Meta insists on the continued significance of paid VR apps within its Horizon ecosystem, reports suggest a departure from their historical funding strategies supporting standalone VR content, which developers find unsettling.