Meta Platforms, Inc (NASDAQ:META) faced the heat over its metaverse activity fees, the Financial Times reports.
The developers complained against the fees set around apps created for its virtual reality headsets despite chief Mark Zuckerberg's criticism against charging policies on existing mobile app stores like Apple Inc (NASDAQ:AAPL).
Apple retaliated when the Oculus headset maker charged a 17.5% "platform fee" for Horizon Worlds, its "social VR experience," and its 30% tax on digital purchases, similar to that of Apple and Android.
Meta argued that, unlike iPhone owners, Quest users could install apps outside its official store through a third-party app store, SideQuest, or use its less restricted, more experimental app store AppLap.
Meta acknowledged fostering choice and competition in the VR ecosystem, producing a material financial return for developers. Developers have seen a limited impact from the changes.
Users downloaded SideQuest 396,000 times, versus 19 million for the Oculus app.
Meta pinned its hopes on the metaverse to develop a multibillion-dollar consumer market. Meta pledged to spend $10 billion annually on the immersive virtual world filled with avatars for the next ten years.
Apple looks to foray into the metaverse by releasing a set of augmented reality glasses. At the same time, Microsoft Corp (NASDAQ: MSFT) developed services using its HoloLens virtual reality headset.
Developers saw Meta rule the market by fast-tracking some and delaying others till the entry of more prominent players like Apple, and others. Developers are also concerned with Meta's transparency over the openness of its VR app store.
Various immersive experience groups have found it cumbersome getting something on the Quest store versus Apple or Android stores.
Analysts suggested a lack of traction on metaverse front Meta's name and ticker change. Needham saw Meta's falling brand value as a lead indicator for rising customer acquisition costs, churn levels, and declining pricing power.
It considered Meta's efforts as futile to catch up with TikTok and Alphabet Inc (NASDAQ: GOOG) (NASDAQ:GOOGL) YouTube in the video, and Amazon.com Inc (NASDAQ:AMZN) and Google in eCommerce.
Price Action: META shares traded higher by 0.06% at $160.77 in the premarket on the last check Wednesday.
