Ex-Oculus CTO Slams Meta’s 30% VR Fee as “Wasteful Churn”
▼ Summary
– John Carmack criticizes Meta’s Horizon Store model, calling its practice of subsidizing developers and then taking a 30% platform fee “wasteful churn.”
– He suggests a model like Epic Games’, which charges no fee on a developer’s first $1 million in annual revenue, to better reward economic activity.
– Epic CEO Tim Sweeney notes their low 12% fee and the $1M threshold have not been abused, but warns a 30% rate might incentivize different developer behavior.
– Unlike PC gaming, the Quest ecosystem lacks real store competition, as Meta is unlikely to allow a rival storefront like Epic’s on its platform.
– This lack of competition removes the incentive for Meta to change its fee structure, similar to how Apple’s closed ecosystem maintains its own rules.
John Carmack, the renowned programmer and former Chief Technology Officer of Oculus, has publicly criticized Meta’s current fee model for its Horizon Store, labeling the company’s approach as creating “wasteful churn.” Despite leaving Meta in 2022, Carmack remains a vocal figure in virtual reality discussions. His recent commentary centers on what he sees as a fundamental flaw: Meta provides subsidies to attract developers to its Quest platform, only to reclaim a significant portion of that investment through a substantial transaction fee.
In a detailed social media post, Carmack outlined the apparent contradiction. “Companies like Meta subsidize third party developers in various ways to help grow their platforms, then take 30% of the developer revenue right back with the platform tax, which is a wasteful churn,” he stated. He argues this system inefficiently moves money back and forth instead of fostering sustainable growth. As a preferable alternative, he highlighted the model used by Epic Games, which charges no fee on a developer’s first one million dollars in annual revenue. This structure, Carmack suggests, directly rewards genuine economic success rather than relying on a “biased pre-selection process” for subsidies.
Engaging directly with Epic CEO Tim Sweeney in the conversation, Carmack pondered an even more radical idea. He questioned whether a platform like Meta’s Quest could implement a negative initial fee, effectively paying developers a bonus for early revenue, instead of the standard cut. He acknowledged the potential for exploitation but framed it as a powerful incentive for a nascent ecosystem. Sweeney responded, confirming that Epic’s million-dollar threshold has functioned without significant abuse, partly because their standard fee is a lower 12%. He cautioned, however, that at a 30% rate, developer behavior and exploitation risks might change considerably.
The situation on Meta’s Quest platform differs notably from the open environment of PC gaming. PC users enjoy a competitive marketplace with stores like Steam, Epic Games Store, and GOG vying for their business. On Quest, the Horizon Store operates with far less direct competition. While users can sideload applications via platforms like SideQuest, these are not full-fledged alternative stores. SideQuest often acts more as a discovery tool, frequently linking users back to the official Horizon Store for purchases. This landscape means Meta faces little market pressure to alter its fee structure, akin to the walled-garden approach seen in mobile ecosystems like Apple’s.
Meta’s business strategy mirrors traditional console economics: sell hardware at a subsidized cost with the expectation of profiting from software sales. This model relies on controlling the primary storefront. Allowing a competing store with a dramatically better revenue share, similar to how Epic Games Store challenges Steam with free games and lower fees, could undermine that strategy. Steam itself employs a tiered fee, starting at 30% and decreasing after revenue milestones of $10 million and $50 million. For now, without a viable competitor on the horizon, the incentive for Meta to voluntarily reduce its 30% platform fee remains minimal, leaving developers and critics like Carmack to call for a more efficient system.
(Source: NewsAPI VR/AR Entertainment)
