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Meta (FB) to Charge 50% Cut From Virtual Sales in Horizon
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Meta Platforms intends to charge nearly 50% cut from the sale of digital assets in its emerging metaverse. Currently, the company is testing tools to sell digital assets and services in the virtual reality platform — Horizon world — an early iteration of the metaverse. This is a massive step for CEO Mark Zuckerberg's bold ambitions for the metaverse, as it will allow the development of commercial activity in the alternate reality, which will be independent of the real world.
Meta confirmed in a recent blog post that tools to sell digital assets and services will be available initially to a handful of creators who are creating virtual classes, games and fashion accessories within the Horizon platform, accessible via VR headsets.
The company stated that it will be charging up to 47.5% for each transaction, which will include a hardware platform fee of 30% via its Meta Quest store and a 17.5% cut on Horizon Worlds.
This has generated huge backlash from developers as many pointed out that NFT marketplace, OpenSea, only charges a 2.5% cut on each transaction while LookRare charges 2%.
Such a massive charge in the name of transaction fees is completely unprecedented as Zuckerberg himself had previously criticized AR rival Apple (AAPL - Free Report) for charging developers as much as 30% for in-app purchases.
Zuckerberg commented that as the world is building up for the metaverse, Meta is focused on creating opportunities to make money from their work. However, with Meta’s announced charges on each transaction being much higher than the competition, creators would find it very difficult to profit from the Meta platforms.
Per MarketWatch, Apple spokesperson Fred Sainz recently commented via email that Meta has been criticizing the company for charging developers 30%, citing that this hampers their opportunities to earn money from metaverse for their own work.
However, Meta has been consistently using small businesses as a scapegoat and would charge the same developers a whopping 50% now while they intend to use the Apple platform for free.
Meta is competing with other big tech giants and new virtual world players committed to building the metaverse where land, buildings, avatars and even names can be bought and sold as non-fungible tokens or blockchain-based virtual assets. The NFT market grew exponentially last year, fetching hundreds of thousands of dollars for NFT creators. Thus, Meta, along with other big tech giants, are competing against each other for market share in the NFT space.
Other Big Players in Metaverse
Meta is facing stiff competition from social media peer Twitter in the metaverse. Twitter has launched a tool that allows users to showcase NFTs as their profile pictures. The new tool designed by Twitter connects users’ Twitter accounts with their crypto wallets holding the NFTs.
Twitter is exploring the crypto universe and supporting NFT trading. Artists can use the platform to connect their crypto wallets and take payments directly through Twitter. They can also take tips in cryptocurrencies like Bitcoin and Ethereum, or through crypto wallet apps. How Twitter charges creators for their NFT transactions will greatly affect Meta’s performance in the NFT trading space.
Meta’s other social media peer, Snap (SNAP - Free Report) , is also trying to win market share in the virtual world. Snapchat is the most preferred social media platform among millennials and Gen-Z.
The real value of the company is not in its social media profile, but the AR features that attract users and content creators to its platform. Snap has recently acquired the neurotech company, NextMind, a Paris-based startup that develops non-invasive brain-computer interface technology using electronic devices. The acquisition is expected to help Snap realize its long-term AR goals and enter the metaverse.
Zacks Rank and Stock Performance
Meta, which currently has a Zacks Rank #4 (Sell), witnessed its shares slump 36.1% in the year-to-date period compared with the Zacks Internet – Software industry's and the Zacks Computer and Technology sector's declines of 33.6% and 17.5%, respectively.
Image: Bigstock
Meta (FB) to Charge 50% Cut From Virtual Sales in Horizon
Meta Platforms intends to charge nearly 50% cut from the sale of digital assets in its emerging metaverse. Currently, the company is testing tools to sell digital assets and services in the virtual reality platform — Horizon world — an early iteration of the metaverse. This is a massive step for CEO Mark Zuckerberg's bold ambitions for the metaverse, as it will allow the development of commercial activity in the alternate reality, which will be independent of the real world.
Meta confirmed in a recent blog post that tools to sell digital assets and services will be available initially to a handful of creators who are creating virtual classes, games and fashion accessories within the Horizon platform, accessible via VR headsets.
The company stated that it will be charging up to 47.5% for each transaction, which will include a hardware platform fee of 30% via its Meta Quest store and a 17.5% cut on Horizon Worlds.
This has generated huge backlash from developers as many pointed out that NFT marketplace, OpenSea, only charges a 2.5% cut on each transaction while LookRare charges 2%.
Such a massive charge in the name of transaction fees is completely unprecedented as Zuckerberg himself had previously criticized AR rival Apple (AAPL - Free Report) for charging developers as much as 30% for in-app purchases.
Zuckerberg commented that as the world is building up for the metaverse, Meta is focused on creating opportunities to make money from their work. However, with Meta’s announced charges on each transaction being much higher than the competition, creators would find it very difficult to profit from the Meta platforms.
Meta Platforms, Inc. Price and Consensus
Meta Platforms, Inc. price-consensus-chart | Meta Platforms, Inc. Quote
Per MarketWatch, Apple spokesperson Fred Sainz recently commented via email that Meta has been criticizing the company for charging developers 30%, citing that this hampers their opportunities to earn money from metaverse for their own work.
However, Meta has been consistently using small businesses as a scapegoat and would charge the same developers a whopping 50% now while they intend to use the Apple platform for free.
Meta is competing with other big tech giants and new virtual world players committed to building the metaverse where land, buildings, avatars and even names can be bought and sold as non-fungible tokens or blockchain-based virtual assets. The NFT market grew exponentially last year, fetching hundreds of thousands of dollars for NFT creators. Thus, Meta, along with other big tech giants, are competing against each other for market share in the NFT space.
Other Big Players in Metaverse
Meta is facing stiff competition from social media peer Twitter in the metaverse. Twitter has launched a tool that allows users to showcase NFTs as their profile pictures. The new tool designed by Twitter connects users’ Twitter accounts with their crypto wallets holding the NFTs.
Twitter is exploring the crypto universe and supporting NFT trading. Artists can use the platform to connect their crypto wallets and take payments directly through Twitter. They can also take tips in cryptocurrencies like Bitcoin and Ethereum, or through crypto wallet apps. How Twitter charges creators for their NFT transactions will greatly affect Meta’s performance in the NFT trading space.
Meta’s other social media peer, Snap (SNAP - Free Report) , is also trying to win market share in the virtual world. Snapchat is the most preferred social media platform among millennials and Gen-Z.
The real value of the company is not in its social media profile, but the AR features that attract users and content creators to its platform. Snap has recently acquired the neurotech company, NextMind, a Paris-based startup that develops non-invasive brain-computer interface technology using electronic devices. The acquisition is expected to help Snap realize its long-term AR goals and enter the metaverse.
Zacks Rank and Stock Performance
Meta, which currently has a Zacks Rank #4 (Sell), witnessed its shares slump 36.1% in the year-to-date period compared with the Zacks Internet – Software industry's and the Zacks Computer and Technology sector's declines of 33.6% and 17.5%, respectively.
You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.