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Facebook Is Working on a New Golden Opportunity

The social media giant has started testing the sale of virtual goods with creators and influencers.
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Okay, let's talk money.

The metaverse has been generating mountains of buzz about a brave new world where people can do all sorts of funky stuff from the their computers.

'New Tools for Creators'

Meta Platforms  (FB) - Get Free Report, formerly Facebook, is looking to add some money to the all that chatter.

The social media giant said it is testing several tools that will enable creators to experiment with different ways to make money off of what they're building in Horizon Worlds, Meta's social metaverse platform for Quest VR headsets.

CEO Mark Zuckerberg said that a mobile phone version of the Horizon Worlds would launch later this year.

Meta said it is expanding on its $10 million Horizon Creators Fund, which it announced last October. 

The company said it was rolling out a test with a handful of creators that will let them sell virtual items and effects within their worlds. 

Someone, for example, could make and sell attachable accessories for a fashion world or offer paid access to a new part of a world.

David Reid, professor of AI and spatial computing at Liverpool Hope University, said that much like the development of the Web he fully expects the metaverse market to evolve.

However, Reid said there are two limiting factors. Currently, he said, there are about 14 million people with VR headsets compared wit 15 billion people with mobile phones.

In addition, there is the issue of interoperability.

Goods or services bought in one location must be able to be transferred, Reid said, similarly a wallet working in one location must work in other locations. 

“I think Mark Zuckerberg is aware that for the metaverse to work, interoperability is key,” Reid said. “If borders exist between different companies between different companies, then you are not creating a metaverse but a multiverse."

For the moment, he added, "we have multiverses that do not talk nicely to each other. For the metaverse economy to really take off these separate Multiverses need to either reduce the borders between them or become one, unified, metaverse."

'The First Step'

The social media response include a person who tweeted footage of a crowd giving a standing ovation.

"This is the first step to join the real world with the VR environment," another person tweeted

"Maybe let the world actually play the game before you invest billions of dollars into the game," another commenter said.

Of course, everything has a price tag, even in the metaverse.

A Meta spokesperson said that creators will earn revenue from purchases people make in their worlds, subject to any relevant hardware platform fee, and a Horizon Worlds fee, which is 25% of the remainder.

If this were happening today, there would be a Meta Quest Store fee of 30%, and then a Horizon Platform fee-25% of the remaining 70%- of 17.5% applied.

"Over time, as we expand Horizon Worlds to more platforms - other companies will charge their own platform fees and so that portion may not go to Meta," the spokesperson told TheStreet "The Horizon Worlds fee will remain as 25% of the remainder after any platform fee is taken."

Rec Room and online gaming platform Roblox  (RBLX) - Get Free Report both allow creators to sell items that they make.

The move to the metaverse has had its challenges. 

Meta posted weaker-than-expected fourth-quarter earnings in February and Zuckerberg lost nearly $30 billion of his own wealth. 

Earlier this year, Meta added a mandatory "personal boundary" to Horizon Worlds and Venuses following complaints from female users about being groped.

Meta said people participating in any monetization programs must follow polices regarding conduct and prohibited content, which includes anything adult or sexual in nature, as well as intense or violent content, "including blood and gore." 

'A Host of Concerns'

The Security and Exchange Commission recently ruled that Meta must give investors an opportunity to consider and vote on a shareholder proposal that questions the ”social license to operate an emerging technology like the metaverse” without fully understanding the potential risks and negative impacts.

Meta came out against the proposal in its proxy statement, saying "we believe that we have the right approach in place for our metaverse efforts."

Rabindra Ratan, associate professor of media and information at Michigan State University, said he believes the SEC made a prudent decision and that despite Meta's request to dismiss the evaluation, "they will actually benefit in the long run by the increased scrutiny of this issue at this early phase of metaverse-technology development."

"They are poised to benefit greatly from the adoption of metaverse technologies so they know the stakes are high," Ratan said. "I would also expect that they have a better understanding of the need to pay attention to unexpected harms caused to their users by their products."

Ratan, who has received funding for his research lab at MSU from Meta in the form of an unrestricted gift, said the metaverse will usher in a host of concerns, from managing health-related private data collection tracked through user-body movements to mitigating embodied toxic or anti-social behavior to many more.

"Further, and perhaps more importantly, I believe that while there is the potential for harm caused by metaverse technologies, there is also great potential for social benefit," he said. "I would hope that this type of scrutiny will increase the likely net benefit of the tech in the long run."