Why Meta decided against an open VR app store

Hello, and welcome to Protocol Entertainment, your guide to the business of the gaming and media industries. This Thursday, we’re taking a closer look at the performance of apps on Meta’s Quest app store. Also: Jason Kilar is leaving WarnerMedia, and Edward Norton is a Nielsen competitor now.

Meta’s Quest app store by the numbers

Meta has frequently been criticized over its decision to ship its Quest VR headset with a closed app store, with Meta employees routinely rejecting titles that they don’t deem worthy of being distributed on the platform. At GDC last month, the company’s content ecosystem director, Chris Pruett, defended the practice, arguing that curation was critical for the success of VR as a medium.

To bolster his argument, Pruett shared a bunch of data and other insights that are worth your while if you’re part of the VR industry or just want to get a better understanding of the potential of modern-day VR hardware. Meta published the entire talk on YouTube a couple of days ago, but here are some key highlights:

  • Facebook’s Oculus Go headset shipped in 2018 with an open app store, which was used by developers to distribute anything from obscure demos to full-fledged games.
  • The response from Go owners was decidedly mixed, according to Pruett. People who downloaded more-polished games as their first titles kept coming back for more; others who happened to try something obscure, experimental or unfinished often gave up on the headset, assuming that this was just what VR looked like.
  • This showed that quality was key to make VR a mainstream success story. “What we needed was console-quality video games,” Pruett said.
  • The team also looked at mobile app stores and quickly realized that they didn’t work for many developers. “You have a very small number of winners and a very large number of losers in the ecosystem,” Pruett said.

Meta’s curation of the Quest app store seems to be working, at least for the apps that do make the cut. Developers have generated more than $1 billion in revenue via the Quest app store, the company announced earlier this year.

  • That number isn’t just driven by a handful of super-successful titles: By January, 35 titles had generated more than $1 million in revenue, 24 titles had over $2 million, 26 titles over $3 million, 17 titles over $5 million, 14 titles over $10 million and eight titles over $20 million.
  • Those categories are exclusive, as Pruett pointed out. “There’s a lot of developers making actual, substantial revenue in VR today,” he said.
  • Altogether, Meta has shipped over 400 titles through the Quest app store to date, with 120 of those surpassing $1 million in revenue.
  • 60% of the titles shipped to date are games, and Pruett said that the “vast majority” of the $1 billion in sales is coming from games.
  • The average price for paid games is $19.

There have been ways for developers to get around the app store. The Quest is an Android device, which means that people can sideload apps not distributed by Meta. This includes full-fledged alternative app stores like SideQuest, which Pruett gave a nod to during his talk.

  • Meta also unveiled its own “alternative” app store in early 2021. App Lab allows developers to distribute their apps on the Quest without official app store approval, which makes it better suited for experimental fare that wouldn’t otherwise get the thumbs-up.
  • Pruett said that there are now 1,400 titles available through App Lab; the total number of titles that have applied stands at 2,400.
  • A few apps have made the jump from App Lab to the official Quest app store, but Pruett stressed that App Lab wasn’t some sort of onramp, and that apps can do just fine without getting onto the app store.
  • “There are apps on App Lab today that have generated over a million dollars in revenue,” he said.

Audience members asked Pruett why Meta was still taking a 30% cut from App Lab titles even if they didn’t receive the kind of promotion reserved for app store titles. He said that the company wanted to keep policies consistent across its stores in case titles do move from the Lab to the official store — a justification that may not completely appeal critics.

Aside from sharing these numbers, Pruett used his talk to underscore how important a more hands-on approach is for a new medium like VR. “90% of the people who activate a Quest have never owned an Oculus device before,” he said. Those VR newcomers would be better suited with a highly curated experience, he said. “We are courting a user base that is not just the VR enthusiast user base.”

—Janko Roettgers

Jason Kilar is out of here

Surprisingly no one at all, WarnerMedia CEO Jason Kilar announced this week that he is leaving the company. Kilar and his former employer both had been open about the fact that he wouldn’t stick around after Discovery’s acquisition of WarnerMedia closed, which is supposed to happen any day now.

In to memo sent to employees this week, Kilar called the job he is now leaving “the honor of my lifetime,” paying tribute to the company’s storied history — a history that Kilar tried to shake up throughout his two-year tenure.

  • HBO Max launched weeks after Kilar took the job. The service had been under development for a while, but Kilar doubled down on a direct-to-consumer future.
  • That included the controversial decision to release all of WarnerMedia’s 2021 movies on HBO Max and a hybrid release schedule in 2022.
  • Kilar reportedly also played a key role in the resignation of former CNN President Jeff Zucker.

The big question now is: What’s next for Kilar? After Kilar left his job as Hulu CEO in 2013, he went on to found Vessel, a subscription service for short-form video that never took off. Maybe he’ll try his luck in startupland one more time?

—Janko Roettgers

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In other news

Plex adds universal search and discovery features. The media center app wants to become the go-to destination for all your streaming needs.

ByteDance scraped Instagram for a TikTok predecessor. TikTok’s parent company is said to have lifted videos and user profiles from Instagram and Snapchat to populate its Flipagram mobile social network, BuzzFeed reported this week.

Why Netflix should sell ads. Ben Thompson doesn’t think there’s a future in gaming for Netflix and argues that the video service should bet on advertising instead to keep the printer money going amid stalled user growth. Counterpoint: No thanks?

Redbox just laid off 10% of its staff. The company also postponed the reporting of its Q4 results.

TCL could become the second-largest TV maker in the world this year. TCL is poised to surpass LG in panel shipments, which could be good news for its two smart TV OS platform partners Roku and Google.

“Turning Red” filmmakers tapped for leadership roles at Pixar. Director Domee Shi and producer Lindsey Collins are now vice president of creative and senior vice president of development, respectively.

Apple may launch a classical music app soon. Following its acquisition of the classical music streamer Primephonic last year, Apple could be getting ready to launch a standalone app soon, if code snippets in the latest iOS beta are any indication.

Niantic acquires AR studio NZXR. The studio was founded by former Magic Leap employees, and, among other things, it built an AR skateboarding game.

Music industry singles out Discord, Reddit and Telegram over piracy. Industry group IFPI wants the companies included in a piracy watchlist published by the European Union.

Amazon Music is getting more expensive for Prime members. The streaming service is raising prices by $1 a month, bringing the price of a Spotify-like plan to $8.99 per month.

Edward Norton point zero

Earlier this week, a company called EDO announced that it had raised $80 million to grow its TV and streaming data measurement business. EDO is essentially competing with Nielsen, which is an interesting story in itself, but I can’t get over one aspect of it: EDO was co-founded by actor Edward Norton. Famous co-founders are nothing new, but Norton apparently also inspired EDO’s brand name, which made me wonder: What if other celebrities also inspired the names of streaming tech companies? How about Downey jr., a video download service for kids? But how about Packino, a streaming service for cinefiles? Personally, I’m looking most forward to Mur-Ray, a Blu-ray subscription service that only sends out Wes Anderson movies.

—Janko Roettgers

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Thoughts, questions, tips? Send them to entertainment@protocol.com. Enjoy your day, see you tomorrow.

Update: This story was updated at 6:30 am PT April 7 to include a news item about the “Turning Red” filmmakers.

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