Bigscreen CEO: Facebook's 30% 'VR Tax' Hurts The Industry

Bigscreen CEO: Facebook's 30% 'VR Tax' Hurts The Industry

Oculus Store apps must use Facebook’s payments system for any and all transactions. Bigscreen CEO Darshan Shankar points out how this makes it impossible for some developers to succeed.

That’s because the fee for that mandatory in-app payment system is 30%. For that, users get the convenience of using their existing saved payment methods, and the peace of mind that no card details need to be shared.

But how do companies sell products or services with a lower than 30% margin? Bigscreen offers 3D movie rentals. Shankar claims movie studios take 60-80%, so that leaves between a 10% profit and 10% loss for Bigscreen- not a sustainable business.

Facebook presumably makes special deals with big companies like Fandango and Netflix, exempting them from the rules it holds most developers to. These companies can be profitable in VR, while small companies simply can’t compete. Worse yet, Facebook offers its own movie rental service.

Taking a 30% cut of a 10GB game can be argued to be a fair exchange for hosting, serving, and promoting it. But these justifications fall apart when applied to in-app-purchases.

Shankar spoke about this a few weeks ago on Twitter, and on our from-VR podcast The VR Download. We’ve clipped out the segment here:

https://youtube.com/watch?v=r1EfXyZvQJU%3Ffeature%3Doembed%26%23038%3Bshowinfo%3D0%26%23038%3Brel%3D0%26%23038%3Bmodestbranding%3D1%26%23038%3Biv_load_policy%3D3%26%23038%3Bplaysinline%3D1%26%23038%3Benablejsapi%3D1

He called attention to the fact that not only does this make digital services unprofitable, but physical retail too. What if a furniture company made a VR app letting you see their offerings in true scale? To actually let you buy, they’d need to fork over 30% to Facebook each time.

Apple has been facing similar criticism on requiring the use of its payments system. Companies like Epic Games, Spotify, and Netflix want to let customers make purchases & subscriptions directly to avoid the same 30% “tax”.

Like Apple, Shankar says Facebook isn’t budging on its position. Developers can distribute apps over SideQuest with any payments system, but that requires a PC and forgoes automatic updates- for now. WebXR apps also have this freedom naturally, but entering details in VR isn’t a great experience. The open standard Payment Request API (which Facebook is contributing to) seeks to solve this kind of problem on the web, so in the future we might see convenient open payments via Oculus Browser.

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