ByteDance encouraged Meta game developers to "jump ship" and paid $25,000 per game

Focus

• 1ByteDance is paying software developers who develop Meta games to encourage them to bring their apps to Pico headsets, and is willing to pay $15,000 to $25,000 per game.
• 2As of last October, Meta's Quest headset had 6.37 million monthly active players and more than 500 apps in its app store. In comparison, there are more than 300 applications on the ByteDance Pico platform.
• The way 3Meta reviews apps has sparked dissatisfaction among many developers, saying that the approval process lacks clear guidelines and that they are eager for Meta's competitors to join soon.
• 4Meta also launched a strategy to attract developers, announcing the creation of the Oculus Publishing program to fund virtual reality games developed by independent developers.

Tencent Technology News on April 14, according to people familiar with the matter, TikTok's parent company ByteDance is paying developers who develop virtual reality software for Meta, encouraging them to migrate their own applications to Pico headsets. The move shows that the two companies are increasingly competing in the field of virtual reality. Meta CEO Mark Zuckerberg has previously predicted that the virtual reality space will be the next major computing platform.

People familiar with the matter said that ByteDance is paying developers willing to migrate virtual reality applications with $15,000 to $25,000 per game. Both the company and Meta are looking to attract software developers who can develop apps and experiences that are critical to attracting new users to virtual reality. Analysts say Apple also plans to launch an augmented reality headset later this year.

Figure 1: As of last October, Meta's Quest headset had 6.37 million monthly active players

The Meta approval app was spit on

Many developers are unhappy with the way Meta reviews new software for the Quest headset in the app store, after the company often delayed the approval process. Meta spent nearly $16 billion in 2022 to put the so-called metaverse at the heart of its strategy, choosing to carefully manage the apps available in the Quest Store. Some developers say that Meta's process for reviewing apps lacks clear guidelines, and they are keen to see Meta's new competitors joining soon.

Ben Otram, founder of Squingle Studios, said: "It's absolutely exciting to see major players enter the market and challenge Meta. Squingle Studios makes a virtual reality puzzle game called Squingle. Since its launch in July 2021, the app has been waiting to be accepted by the Quest Store.

Chris Pruitt, director of Meta's content ecosystem, said at last month's Game Developers Conference: "It's good for Meta that ByteDance entered the virtual reality market and provided funding to developers. I want all the boats to set sail. Pruitt has previously defended Meta's decision to carefully review apps to ensure users have a good experience.

A Meta spokesperson said the app submission system in the Quest Store is designed to ensure that the company's devices provide a consistent, comfortable experience for customers. She added that the evaluation of the application is based on many factors, including performance, input, and security, to create a high-quality, high-value experience for virtual Xi'an consumers.

Of the games available on Quest, only one became a real hit more than two years after Meta's latest consumer headset launched. Internal documents show that as of last October, the game, called "Beat Saber," had generated $255 million in sales revenue. The game was acquired by Meta in 2019 and has 1.47 million monthly active players, according to the documents. As of October, Beat Saber was one of 14 games on the store that earned more than $20 million among the 500 games.

Figure 2: Since its launch in July 2021, the virtual reality puzzle app Skingle has been waiting to be accepted by the Quest Store

A Meta spokesperson revealed that as of February 2023, the number of apps with revenue of more than $1 million on Meta's virtual reality devices has exceeded 200, a year-on-year increase of 44%.

As of last October, Meta's Quest headset had 6.37 million monthly active players, according to the documents. Market research firm IDC estimates that Quest helmet shipments fell by more than 90% in the fourth quarter of 2022 compared to the same period last year. At the same time, ByteDance's Pico helmet shipments increased by 110%. ByteDance shipped 290,000 helmets in the last quarter of last year, slightly less than Meta's 310,000. In March, Meta lowered the price of the Quest 2 by $70 "so that more people have access to virtual reality," Zuckerberg said.

The price is comparable, but there is still a gap

ByteDance acquired Pico, a maker of virtual reality headsets focused on the commercial market, in 2021 and moved to the consumer segment. According to Lazius Kaye, a former Pico employee who participated in the launch of the latest Pico 4 consumer helmet, ByteDance realized that in order to compete with Meta, it needed a lot of resources and needed to subsidize manufacturing costs. The helmet is available in Europe and Asia, but not in the United States, where it retailed for about $470 when it went on sale last fall. The Quest 2 helmet with the same storage space costs $400.

Figure 3: ByteDance's Pico headset has more than 300 apps in its store

Kaye himself runs a virtual reality-related YouTube channel with 13,000 followers. Even at a similar price, he said, ByteDance knows that the Pico 4 may still fall short of Meta's products: it has fewer games, less manual technology, and the overall ecosystem is less developed. ByteDance's Pico has more than 300 apps, while Meta's Quest Store has more than 500. ByteDance also released a social gathering and world-building app called Pico Worlds, similar to Meta's Horizon Worlds.

A ByteDance spokesman said it was industry practice to pay developers to bring existing apps to new platforms. Leland Hedges, Head of Consumer Markets for Europe, Middle East and Africa, Pico, said: "We are excited to partner with some of the most creative VR developers in the industry and develop projects that leverage the features of our unique platform to advance the entire ecosystem. ”

In March, Meta also launched a strategy to attract more developers, announcing the creation of Oculus Publishing to fund virtual reality games developed by independent developers. The company has funded more than 300 games, with another 150 currently in development.

Chris Pruitt, Director of Meta's Content Ecosystem, said at GDC: "This strategy is feasible for us because it's always quality that drives user stickiness, revenue and adoption growth on our platform. ”

Boutiques VS regular stores

Many virtual reality developers were frustrated after being allowed to list their apps in Meta's App Lab instead of the Quest Store, which has a much larger distribution. App Lab allows developers to create links for consumers to download their apps, but developers complain that App Lab is hard for consumers to find, which makes their apps hard to find. When consumers manage to find App Lab's game, they receive a warning that Meta hasn't fully reviewed the app yet.

Applications in App Lab "may contain unknown issues related to comfort, performance, or other factors," the warning reads. The user must tap the message to download the app.

Sarah Hill, CEO of Healium, which develops virtual reality mental health apps, said selling products in the Quest Store and App Lab is the same as selling products in boutiques and regular stores. Healium is also available in other virtual reality app stores, including the Pico 4 and HTC Vive Flow, Hill said, but Meta didn't provide feedback on why its app wasn't accepted.

A Meta spokesperson said App Lab allows developers to do business around Meta's headset, even if their product doesn't align with the way the company manages it. Meta charges virtual reality developers on the Quest Store and App Lab a 30 percent commission, the same rate Apple and Google App Store charge phone software developers.

Kevin Priel, director of Sandford Tech, the developer of the virtual reality puzzle game Color Connection, said the company's games have been available on App Lab since August 2021. Last December, Sandford Tech launched Color Connect for ByteDance's Pico headset, and in just over 1 month, it had more paid downloads on Pico than Meta App Lab combined.

"This shows you the power of mainstream app stores, which allow people wearing virtual reality headsets to see your games and be able to download them," Prier said. (Golden Deer)