Meta Expected To Take Nearly 50% Cut of Horizon Worlds Sales — How Charges Stack Up

Mandatory Credit: Photo by Rafael Henrique/SOPA Images/Shutterstock (12852970i)In this photo illustration the Meta Platforms logo seen in the background of a silhouette woman holding a mobile phone.
Rafael Henrique/SOPA Images/Shutterstock / Rafael Henrique/SOPA Images/Shutterstock

Meta announced it will begin to test several new tools that will enable creators to experiment with different ways to monetize what they’re building in Horizon Worlds. “While we’re launching this today as a test with a handful of creators to get their feedback, these types of tools are steps toward our long-term vision for the metaverse where creators can earn a living and people can purchase digital goods, services, and experiences,” Meta said in a blog post earlier this week.

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Meta said that creators will be able to sell virtual items and effects, “for example, someone could make and sell attachable accessories for a fashion world or offer paid access to a new part of a world.”

However, CNBC reported that what Meta failed to say in the post is that it will take an overall cut of up to 47.5% on each transaction. That includes a “hardware platform fee” of 30% for sales made through the Meta Quest Store, where it sells apps and games for its virtual reality headsets. On top of that, Horizon Worlds will charge a 17.5% fee, according to CNBC.

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DappRadar explains that a further nuance to this is that the items being discussed through the Meta platform may not be NFT items and instead just virtual clothes and game skins, which is more akin to Roblox, where creators can sell on their marketplace. “Still, an almost 50% tax seems unfair, especially when we consider that fees on platforms such as Opensea and LooksRare are a fraction of the amount,” it said.

By comparison, the Apple App store charges creators a 30% tax on in-game item sales, which makes up the bulk of revenue for free-to-play app creators. However, established NFT marketplace fees are far lower, ranging from a high of 20% to a low of 2.5% for the marketplaces, according to DappRadar. The Decentraland marketplace fee for example, is just 2.5%, which is 45% lower than Meta’s expected charge.

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The crypto community was quick to react and took to Twitter to voice its discontent with the fees. “If Meta wants 47.5% of NFT sales they gotta talk to the IRS because I don’t even have that after taxes,” Twitter user @notthreadguy wrote.

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“The future of work is giving Meta 47.5% of your salary, apparently,” @6529 tweeted.

Interestingly, Meta’s CEO Mark Zuckerberg said in November, “As we build for the metaverse, we’re focused on unlocking opportunities for creators to make money from their work. The 30% fees that Apple takes on transactions make it harder to do that, so we’re updating our Subscriptions product so now creators can earn more.”

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About the Author

Yaël Bizouati-Kennedy is a full-time financial journalist and has written for several publications, including Dow Jones, The Financial Times Group, Bloomberg and Business Insider. She also worked as a vice president/senior content writer for major NYC-based financial companies, including New York Life and MSCI. Yaël is now freelancing and most recently, she co-authored  the book “Blockchain for Medical Research: Accelerating Trust in Healthcare,” with Dr. Sean Manion. (CRC Press, April 2020) She holds two master’s degrees, including one in Journalism from New York University and one in Russian Studies from Université Toulouse-Jean Jaurès, France.

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