The Metaverse Developer Pay Problem — Virtualization Overview

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The Metaverse Developer Pay Problem

The emerging metaverse hasn’t quite coalesced into a “thing” yet, but everyone pretty much agrees that it’s going to shake things up across the board, including a lot of jobs.

This includes software developers, who are now deciding whether to venture into the world of virtual 3D worlds, augmented reality, cryptocurrency, NFTs, blockchains, a distributed internet, decentralized autonomous organizations and so on. When making that decision, they must weigh many factors and ask many questions. Can software developers make a lot of money in the metaverse? How much? How and with what will they be paid?

It’s a brand new ballgame, and these considerations are still shaking themselves out.

With the metaverse not yet well formed, good places to explore these issues are early adopter areas such as gaming and NFT trading, precursors to the expected massive corporate presence initiatives that enable technology operations and business to be conducted primarily online .

For example, Microsoft, in announcing its acquisition of game development company Activision Blizzard early this year, said: “This acquisition will accelerate growth in Microsoft’s gaming business across mobile, desktop, console and cloud and will provide building blocks for the metaverse.” In fact, none other than CEO/Chairman Satya Nadella weighed in on the buyout and indicated its importance to more mainstream metaverse futures.

“Game is the most dynamic and exciting category in entertainment across all platforms today and will play a key role in the development of metaverse platforms,” ​​said Nadella. “We are investing deeply in world-class content, community and the cloud to usher in a new era of gaming that puts players and creators first and makes gaming safe, inclusive and accessible for all.”

Metaverse Gaming Pioneers: ‘Game Developers Can Be Key’“Game developers could be the key,” says a recent article on the Finance Magnates website. “To get and retain users, there has to be a hook, and no one is more adept at building environments that connect with the imagination and activate mental reward circuits than game developers who fully understand the mechanics of an addictive digital experience. understand.

“For this reason, perhaps we should look to the gaming industry as a place from which compelling metaverse-type environments can emerge, attracting not only a subset of NFT and crypto enthusiasts, but also the mainstream. What’s more, the gaming industry has deep pockets, and can build through every market cycle, including so-called crypto winters.”

With their early entry into the metaverse ecosystem, game developers are now experiencing new things that may translate to future mainstream enterprise-oriented software development.

And one of the things they experience is a payment problem.

A new trend report from Newzoo sheds light on the issue, which is actually widespread and not endemic to the metaverse. Newzoo uses gaming platforms, specifically Roblox, as an example in its report titled “The Metaverse, Blockchain Gaming, and NFTs: Navigating the Internet’s Uncharted Waters.”

Roblox is both an online gaming platform and game creation system, in which developers can build games for others on the platform to use. Newzoo describes it as one of the most popular games on the planet and says it offers a glimpse into the future of virtual worlds. However, there is a catch for Roblox developers.

“Developers who build on Roblox only keep a small percentage of the revenue they generate,” the report said. “Unlike traditional distribution platforms like Steam and Google Play, which have a standard 30 percent cut on all game or in-app purchases for most developers, Roblox takes a much higher fee — nearly 75 percent — from game developers who build on its platform This is significant, even compared to Meta announcing a 47.5 percent take rate for Horizon Worlds, a move that caused a major backlash in the community.

Indeed, Meta (formerly Facebook) caused quite a stir with that April announcement reported by CNBC, which said the company “plans to take a cut of up to 47.5 percent on the sale of digital assets on its virtual reality platform Horizon Worlds, which is an integral part of the company’s plan to create a so-called ‘metaverse’.”

Meta has also sparked controversy with a virtual reality headset charging scheme, as reported by Financial Times. “Meta is facing a growing backlash over the charges levied on apps created for its virtual reality headsets, as developers complain about the commercial terms set around futuristic devices the company hopes will help a creating a multibillion-dollar consumer market,” reports the Financial Times.

Furthermore, “several developers told the Financial Times of their frustration that Meta, seen as an early frontrunner in an emerging market, was pushing for a charging model for its VR app store similar to what exists on smartphones today. It is despite Meta chief Mark Zuckerberg has been very critical of imposing policies on existing mobile app stores in the past.

While some developers have criticized the Roblox revenue/payment scheme, Newzoo points out that the nearly 75 percent developer churn—reportedly higher than that found in many traditional digital storefronts—can be explained by inherent benefits developers enjoy when using the platform, such as a large user base and the already existing game engine called Roblex Studio that developers can use for their creations.

Payment MethodsBesides payment schemes, another issue being worked out is about payment methods. Discussing its Horizon Worlds monetization, Meta said: “We’re starting to roll out a test with a handful of creators that will allow them to sell virtual items and effects within their worlds. For example, someone can make and sell attachable accessories for a fashion world or offers paid access to a new part of a world.”

Not surprisingly, cryptocurrency and NFTs have been identified as potential payment options in the metaverse, but these may not be popular with developers who want to be paid for their metaverse gaming efforts.

“Two of the hottest and most polarizing topics debated in the game industry are cryptocurrency and non-fungible tokens (NFTs),” says a recent post from the Game Developers Conference, discussing a developer survey. “While the majority of developers said that they and their studio are not interested in cryptocurrency (72 percent) as a payment instrument or in NFTs (70 percent), 27 percent percent of developers are at least somewhat interested in such an emerging space in cryptocurrency at their studio and 28 percent are at least somewhat interested in NFTs.”

Developers may not have a payment choice, if the metaverse disrupts what we traditionally think of as “money”.

“The definition of what counts as money in the Open Metaverse is likely to be very different from what counts as money in the real world today,” says financial powerhouse Citi in a paper titled “Metaverse and Money: Decrypting the Future.” It says: “We expect different forms of cryptocurrency to dominate, given the inherent multi-chain trend in the crypto ecosystem, but to co-exist with fiat currencies, CBDCs and stablecoins.”

Furthermore, Citi said: “For creators and builders, it is important that the Metaverse form of money is easily accessible, has predictable fees and is convertible to real-world currencies of choice. We can envision a future where stream packets of money flow into the opposite direction of streaming content from decentralized Netflix-like applications, depending on how we define embedded finance, almost all payments in the Metaverse could be embedded finance payments.