Meta Unveils $50M ‘Horizon Worlds’ Content Fund Amid Challenges for VR Studios

Meta unveiled a new $50 million fund today, aimed at sparking innovations and enhancing content creation on Horizon Worlds, their flagship social gaming platform. This initiative arrives at a crucial time, as many established studios developing standalone VR apps for the Quest platform are finding it harder to sustain business due to changes in user demographics that Meta has identified.

Since the Oculus Rift CV1 debuted in 2016, standalone VR apps have been at the heart of Meta’s VR ecosystem, driving a steadily increasing user base. Traditionally, these apps have defined Meta’s extended reality (XR) platform, but the company now believes that success lies in fostering a vast, interconnected metaverse. Horizon Worlds stands as Meta’s ambitious endeavor to create this metaverse—a unified space for playing and building. Here, creators can design and share content within the Horizon Worlds community. The platform’s inherently social nature plays into Meta’s strengths as a leader in social media.

Despite being part of the VR landscape for years, Horizon Worlds hasn’t hit the critical mass of users Meta hoped for to achieve scale. In response, the platform has broadened its reach by including non-VR devices like phones and computers, aiming to welcome a larger audience. This strategy, while expanding potential user base, introduces challenges for creators who must navigate the distinct characteristics of VR versus traditional flat-screen experiences.

The perennial challenge for Horizon Worlds lies in its content. Without engaging experiences that entice users to return, there’s little incentive for newcomers to explore the platform. While Meta has made progress by attracting creators and even developing first-party games within Horizon Worlds, the push for more innovative content continues.

To propel content creation forward, Meta has launched a $50 million “Creator Fund,” designed to reward creators of worlds that see high user engagement and retention. The company’s announcement details that “monthly bonuses from the Creator Fund will be distributed to makers of mobile and MR worlds that attract time spent, retention, and in-world purchases.”

Accompanying this funding initiative is the introduction of the Horizon Worlds desktop editor. This tool provides creators with the capability to develop projects using the computer’s power, resembling the workflow of VR developers who typically use engines like Unity.

Meta’s efforts underscore its commitment to making Horizon Worlds a linchpin of its strategy in this domain. Regardless of the device, Meta’s vision is to craft a platform akin to Fortnite, a gaming social network with immense reach and staying power. Meta’s CTO has impressed upon XR and Horizon teams that the mobile adaptation of Horizon Worlds is critical for future successes.

Even as Meta rolls out the $50 million fund, the timing proves challenging for developers of traditional standalone VR and MR apps, which have maintained Meta’s hardware relevance. Over the past two years, Meta has visibly shifted its VR platform’s focus towards Horizon Worlds, reorganizing interface designs and renaming products to highlight Horizon’s content over standalone apps. This adjustment often pushed standalone apps to the backdrop, sometimes favoring less polished or derivative content mimicking successful standalone titles within Horizon Worlds.

This strategy has left a significant impact on third-party developers, whose business models rely on app sales to fund ongoing and future projects. Many feel that Meta is shifting consumers away from their apps towards Horizon Worlds, where Meta claims a larger share of creator revenues.

Some studios known for acclaimed standalone VR apps have had to downsize or cut back due to sluggish performance metrics on the Quest platform, not to mention challenges facing the wider gaming industry. Meta, too, has shuttered one of its own high-production VR game studios.

It’s important to acknowledge that Meta has invested heavily in standalone VR games and apps over the years. The company has allocated hundreds of millions to foster compelling VR content and encouraged indie developers through initiatives like Oculus Start. They’ve also established funds to promote new studios to explore MR content for Quest, and another for developers building lifestyle apps for Quest headsets.

Nevertheless, developers face a volatile landscape, with concerns over Meta’s constantly evolving focus—from VR to MR and now to Horizon Worlds—making Quest a precarious platform for business investments.

Meta, however, defends itself, attributing some developers’ downslides not to its frequent pivots but to changing user preferences, with a rising demand for free-to-play apps over paid versions. Indeed, the success story of “Gorilla Tag” supports this, having generated over $100 million in revenue through in-app purchases, thanks to its accessible free-to-play model.

Other apps adopting the free-to-play approach, like Digigods, are also witnessing a positive trend, evidenced by recent investment boosts following substantial user engagement driven by social, free-to-play, and user-generated content.

Meta continues to affirm the value of paid VR apps on its platform, insisting that it maintains its standard support for standalone VR content development, despite recent reports suggesting otherwise.