Watch: In-Person Look at VRChat's Creator Economy

Had a busy day working on a cool new virtual world project (more on that later), so here's a good long video we can watch together (hat tip, Julian of the Virtual Worlds Museum): A close-up, first-hand look at VRChat's creator economy, and the relatively recent addition of direct monetization options for creators.

I haven't watched the whole thing yet, but one thing jumped out at me: One of the VRChat creators speculates that the company over-hastily added monetization, but I doubt that's the case. As the founders explained to me for the book last year:

In early 2021, VRChat the company announced the ability to sell user-generated content in-world as coming soon. As of early 2023, however, VRChat had yet to fully follow through on that promise —-- despite the growth of VRChat’s creator economy.

“VRChat has not rolled out its long-promised user-to-user economy,” I pointed out to the founders recently, “even as many VRChat creators monetize their work via Patreon, Gumroad, etc.,

“So why the delay?”

“In short: getting it right,” Graham Gaylor and Jesse Joudrey tell me. “We really want to have a creator economy —– it’s absolutely one of our biggest priorities. Helping find a way for users to show creators how much they love what they’re building is absolutely crucial for us.”

Their caution is well-placed. In Second Life, the arrival of an economy where L$ could be exchanged for US$ drove enormous outside interest —-- but it also accelerated its shift into hyper-consumerism. Where once stood collaborative art projects were pervasive across the virtual world, shopping centers and weekend-long sales events quickly came to dominate.

VRChat’s founders seem fully aware of that dynamic: 

“[We’re] very cognizant of the impact an economy could have on the community. Creators would obviously be impacted pretty heavily, but so would regular users. In many ways, introducing an economy can be incredibly destabilizing. Suddenly, creators have obligations and considerations they didn’t previously have. Socially, users might feel compelled to behave entirely differently due to where they’ve spent their money.”

When I last talked with them on this topic, VRChat’s founders seemed to still be thinking through the implications of unleashing an official economy on its community.

“[There’s] not just one way to introduce an economy into a social platform,” as they put it to me. “Almost every platform does it differently, and there’s a reason for that. What can you buy? How do transactions work? There are almost endless variables we have to consider.

“When we roll out a creator economy, we want to make sure that it’s done right, and that our community is happy with it. The last thing that we’d want to do is implement a system that they feel lukewarm about —– or worse, ruins what makes VRChat so special.”

As for whether VRChat still retains its specialness after monetization, watch the whole thing... and expect a deeper dive from me.

Comments

[Martin K.]

Very interesting video; thanks for sharing!

It might be useful to warn readers who are new to VRChat that the way the word "worldbuilding" is used throughout this video is quite special to VRChat, i.e., it doesn't agree with the common meaning of the word as described on Wikipedia: https://en.wikipedia.org/wiki/Worldbuilding . Building a "world" in VRChat includes more than environment art (as described here: https://en.wikipedia.org/wiki/Environment_artist ), but the focus is much more on environment art than on designing things like the history, economies, technologies, cultures, societies, etc. of a fictional world.

With that out of the way, one interesting thought that jumped at me in the context of monetization was this: ( https://youtu.be/Nmv1iMIPv-4?t=2624 ):

> When your world is Quest-compatible, more kids get in; it's just a fact - an uncomfortable fact, because it's also people who don't have as much money - who can't afford a PC - who get a Quest.

All this is probably true, but one might jump to the conclusion that Quest-users spend less money on microtransactions (on average) because they are younger (on average), and that's probably not true for microtransactions targeting children: as Roblox and many other free-to-play games have shown, children might be quite willing to spend a few dollars regularly on (exploitive) microtransactions. (And that inclination is in addition to the larger number of Quest-users compared to PC-VR users.)

Of course, the offerings have to target children; your typical, oversexualised Second Life skins probably won't sell well to children. Which reminds me of the idea that "The Big Sort" (see http://www.thebigsort.com/ ) is not only happening in real life but also in virtual worlds with creator economies: specific metaverse-apps with creator economies attract specific audiences. (The way this usually works is that a majority of paying consumers determines what the majority of creators offer commercially - other consumers and creators are pushed out of the market.) Roblox and Second Life have had a creator economy long enough to find their specific audiences; VRChat might still be in the process of gravitating towards its future (paying) audience.

And that might be a painful process for the consumers and creators who will be pushed out of the monetized future of VRChat. (As far as I can tell, Rec Room is further ahead in that process and has already lost many engaged creators since they introduced their creator economy.)