Hello readers, and welcome back to Week in Review!
Last week I talked about Apple and crypto. This week we’re talking about Apple clashing with Meta over their metaverse taxes.
Sadly, having sent out hundreds of these newsletters, next week will be my last time sending Week in Review – but more excitingly, it’s also my first time sending out my new crypto newsletter Chain Reaction, so if you’re following my wanderings like, please follow me on twitter and subscribe to Chain Reaction!!!
the big thing
If any of my wanderings in this newsletter have taught you one thing about the metaverse, it’s that there isn’t really a cohesive picture of it. Its purest form is probably best seen in the undying jealousy Facebook harbors for Roblox and Meta’s desire to recreate that tweenage empire and bring billions of users to it.
This week, we got a taste of exactly how Facebook hopes to monetize its looming metaverse dreams.
We learned that Meta will start allowing goods to be sold in Horizon Worlds, the latest social VR app it hopes to grow into a multi-trillion dollar empire. The controversial note will be that Facebook will be getting a 25% discount on the goods sold on the platform, which doesn’t sound too problematic until you find out that those goods will also be taxed separately with a 30% discount from the Oculus Store. All told, this means that virtual goods sold on the Horizon platform in VR will carry a whopping 47.5% tax.
If you were hoping the virtual economy meant an escape from the pesky aspects of your day-to-day life, like taxes, then you’ll be disappointed that Uncle Zuck will take a bigger cut than Uncle Sam ever did (although of course he’ll take his in addition) .
Nevertheless, as expected, there was quite a bit of backlash on Facebook for this outsized figure, the most biting of which actually came from Apple:
“Meta has repeatedly attacked Apple for charging developers a 30% commission for in-app purchases on the App Store — and has used small businesses and makers as scapegoats at every turn,” Apple spokesman Fred Sainz said in a statement. email to MarketWatch. “Now – Meta is trying to charge those same creators significantly more than any other platform. [Meta’s] announcement exposes Meta’s hypocrisy. It shows that while they want to use Apple’s platform for free, they are happy to take something from the makers and small businesses that use their own platform.”
These are harsh – and clearly selfish – words from the Apple team, but there is clearly some truth in them. Meta’s CTO responded to the quote with a rather lukewarm commentary about how Apple makes significant margins on hardware and software, while Meta subsidizes its VR hardware and thus should charge more for software. It’s not really a bulletproof defense, especially since Facebook tried to sell VR hardware at a higher premium, but no one wanted to buy it – so selling discounted headsets isn’t a kindness on their part, but a means of surviving VR.
However, this all plays a pretty consistent problem for Facebook. For the past six or seven years, every year has always been a terrible time for them to start monetizing their virtual reality game. Their audiences seemed to resist shifts in monetization every step of the way, and bona fide consumer traction has been so hard to come by over the years that the goal has always been to move headsets and worry about paying the bill later. Fast forward a few billion dollars and the company starts moving more headsets by selling them at a loss, but that doesn’t mean Horizons or VR are in a safer position than they were years ago.
A 47.5% discount isn’t much different from what content creators on Roblox are used to paying, although that money is generally paid to take into account multiple stakeholders of the platform rather than one company. I can’t see it being a terribly compelling recipe for bringing much-needed creators to an emerging platform, but Meta/Facebook’s balance sheet subsidization of the metaverse is going to have to find revenue somewhere, especially when Meta is after all – allegedly – a metaverse company.
Here are a few stories from this week that I think you should take a closer look at:
Elon offers to buy Twitter for $43 billion
There’s no if, and or but about it — the biggest news of the week was that Tesla CEO and richest man-on-the-planet Elon Musk this week offered $43 billion to buy social networking site Twitter in an unsolicited deal with Twitter’s scramble on the board and everyone in Silicon Valley is chatting. It seems to be a tough road for Musk, but knowing him, even if this offer is rejected, he probably won’t give up on shaking things up on Twitter.
Record crypto hack was perpetrated by a North Korea-affiliated group
A few weeks ago, we talked about the $625 million hack of the crypto game title Axie Infinity. Well, things got a little more serious this week when US officials revealed that they linked the hack to the North Korean state-sponsored hacking group Lazarus. The NFT game saw billions of dollars invested, and analysts fear the nine-figure heist could go into financing some scary things like…uhh…nuclear weapons.
Disney Cracks Whip On Fan-Driven ‘Club Penguin’ Copycat, Leading To Arrest Of Founders
Few sagas have betrayed The Mouse’s ruthlessness more than Disney’s relentless efforts to wipe out fan remakes of their popular kids’ social network Club Penguin. This week, one of its most popular clones – Club Penguin Rewritten – was brought down in a saga that feels a bit dramatic as London police arrested three individuals linked to the project and took the site down.
Some of my favorite articles from our TechCrunch+ subscription service this week:
Does Elon Undervalue Twitter?
“…What I want to know, and somewhat quickly, is whether the price being offered makes any damn sense. So let’s find out. We need to know how fast Twitter is growing, how strong its user base is expanding, and how it’s been trading recently We will also consider Twitter’s current efforts to increase shareholder value. Musk is offering $54.20 per share for 100% of Twitter, a $43.4 billion deal. Too low? We’ll figure that out …”
The tech scene in Africa shows no signs of slowing down
“…African startups had a very solid Q1 2022 in terms of VC investment, both in dollars and deal volume. This in itself is news, but all the more so as venture capital financing declined simultaneously in the US, Asia and Latin America….”
Is Stripe Cheap at $95 Billion?
“…With some creative math and, I hope, fair extrapolation, we can derive valuation calculations for Stripe that should help us better understand how well the payment juggernaut masquerading as a private company has priced the price of its latest stock round.. .”
Thanks for reading and have a nice weekend!
This post Metaverses grapple with Meta vs Apple – TechCrunch was original published at “https://techcrunch.com/2022/04/16/metaverses-grapple-with-meta-versus-apple/”