Meta acknowledges that the Quest platform is changing and tells developers to adapt
Meta confirms that the Quest ecosystem is undergoing profound change. There is little consolation for struggling VR studios.
The VR industry is experiencing a never-ending wave of layoffs. With many VR studios seeing a significant drop in revenue from game sales over the past year, and the launch of Quest 3S failing to provide a significant sales boost for many, game companies are being forced to lay off staff.
There are many reasons for the current crisis. Meta Quest's user base is getting younger, preferring free-to-play games over premium titles. The elimination of the App Lab, Meta's prioritization of Horizon Worlds and free-to-play content, and the ever-growing number of VR games make it increasingly difficult for developers to get their products seen on the Horizon Store.
Meta provides numbers: No downturn, just redistribution?
Meta has now responded and published a blog post commenting on the evolution of the Quest ecosystem.
"In 2024 the broader Horizon ecosystem, from Meta Quest devices to the Horizon Store and Horizon Worlds, evolved in ways that will be foundational to its future. A broader range of people are buying Quests, and this expansion has changed some of the tenets of our ecosystem that were previously taken for granted." Meta writes.
In the blog post, Meta gives an update on the ecosystem:
- "Compared to the prior year, device sales increased in 2024 and people spent more time on average in Quest 3S devices than any other headset at launch."
- "People also spent more money across Quest devices. Total payment volume on the platform rose 12% in 2024, driven by significant growth of in-app purchases."
- "In 2024, existing Meta Quest owners drove a wave of device sales as they upgraded from earlier models, accounting for 27% of Quest 3 and 20% of Quest 3S users for the year" and "…the majority of new devices in 2024 were people getting their first Quest headset."
- Another steadily growing group of users are those who consume traditional media with Meta Quest: "…in 2024 we saw a 10% increase in overall time spent per user per month in media apps, as well as a 21% rise in people using Browser. And Amazon’s new Prime Video app, launched in Fall ‘24, is already a top 10 2D app by time spent on the platform."
The trend is towards young users, social and free-to-play games
Meta's numbers should underscore the fact that the Quest platform has grown and diversified in 2024.
"As so many newcomers enter the market, the well-known attributes of VR enthusiasts no longer represent the full Quest userbase."
One of the fastest growing new user groups is young people. "We’re building a social-first platform, and these younger users are more likely to spend time with friends in multiplayer experiences and social hangout apps. They’re contributing to the rise of free-to-play titles," Meta writes, encouraging VR studios to try out new business models by developing free-to-play titles.
"We expect free-to-play (F2P) to become a broadly viable strategy for developers, who up until now have relied almost exclusively on premium apps. But we don’t think F2P will replace premium apps". Both models are likely to coexist, says Meta, but "are fighting for a share of consumer wallets."
Meta writes that it wants to foster an ecosystem where both business models can thrive, and has promised tools and measures to make it easier for VR studios to reach their customers.
Where have all the VR enthusiasts gone?
The audience that uses Meta Quest is changing, and the content that is in demand is changing with it. To remain successful, VR studios must adapt to the evolution of the ecosystem. This is essentially Meta's message to the VR developer community.
The diversification of user groups is in itself a good sign for Meta Quest. The platform is gradually growing out of the enthusiast niche.
But Meta has yet to provide an important answer: where have all the users gone who bought premium apps in previous years and made today's VR studios successful? And if they are still using their devices, why have they stopped buying premium apps?
The ecosystem may be on the verge of a generational shift, and if this trend continues, Quest may evolve into a smartphone-like gaming platform in the upcoming years, making it less appealing to long-time VR enthusiasts.
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