Meta, the company formerly known as Facebook (Facebook shares - Ticker FB), has laid out his plans for how he intends to generate revenue from his virtual world, and that's not good news for content creators.
The company plans to take a 47,5% cut on the sale of NFTs and digital assets on its “Horizon Worlds” virtual reality platform. The digital world is integral to larger plans to develop a Metaverse.
Meta announced its monetization plans in a blog post on April 11, stating that it is launching a test with a "handful of creators" that will allow virtual items and effects to be sold on the platform.
What it hasn't revealed is the massive cut in their profits it will take.
Profit before people
According to CNBC, a spokesperson for Meta said the company will take a "hardware platform fee" of 30% in addition to its 17,5% fee for digital items sold through its Quest Store. The NFT community was outraged, as expected.
By comparison, the leading NFT OpenSea market takes a 2,5% cut for each transaction, and LooksRare only charges 2%. The significant difference is that these platforms are Web3, and Meta is still following the Web2 model, where profit comes before people.
Meta previously cited Apple's hefty 30% cut (AAPL) for app developers, saying it wants to allow creators to do more, but this fee structure will simply push them away. Meta's vice president Horizon told The Verge: "We think it's a fairly competitive rate in the market."
Warnings for whistleblowers
Concern and scrutiny about Meta's grand Metaverse plans are mounting. Earlier this week, the whistleblower who leaked documents accusing Facebook of failing to protect its users last year lashed out at its virtual world ambitions.
Former Facebook product manager Frances Haugen told Politico that the company would need to install lots of advanced hardware to collect data on its Metaverse users, adding:
"I can imagine seeing only a repeat of all the damage currently seen on Facebook."
It's clear from their pricing structure that the company values profit above all else, making its Metaverse a dangerous place to spend time for those who care about their privacy and personal data.
