How Does VRChat Make Money? The VRChat Business Model In A Nutshell

  • VRChat is an online virtual world platform established by Graham Gaylor and Jesse Joudrey in 2014. With virtual reality gathering momentum, Gaylor quit his job at Zynga and brought in Joudrey to help him develop the new project.
  • VRChat generates revenue by selling premium subscriptions that give users access to enhanced features. The price for this subscription, VRChat Plus, is $9.99 per month or $99.99 per year if purchased in the Steam store.
  • VRChat also sells branded merchandise in its online store. Items include tops, sweaters, tote bags, mugs, pillows, and smartphone cases.

VRChat origin story

VRChat is an online virtual world platform established by Graham Gaylor and Jesse Joudrey in 2014.

Before the two came together, Gaylor worked as a software engineer at Zynga while Joudrey had only just started his own virtual reality development firm.

At some point, Gaylor quit his job at Zynga to devote more time to a project called VRChat.

With the popularity of virtual reality gathering momentum, Gaylor brought in Joudrey to help him develop the game. Donations were a primary source of funding during the early days of the company.

VRChat launched on Steam in February 2017 as part of the platform’s early access platform, giving the game exposure to millions of Steam players.

The project was initially defined by its social capabilities and catalog of mini-games.

But Gaylor and Joudrey also wanted VRChat to become the first virtual reality hangout, where players could customize their worlds, host dance parties, and even date other players. 

Seven months later, VRChat Inc. secured $4 million in investment funding with the game available on Viveport and Oculus Rift. In a short space of time, the VRChat community transformed the game universe into a vibrant, inhabited world.

Pubs hosted weekly karaoke nights or performances from brands, and a newsletter and podcast kept the community abreast of the latest developments.

Thousands of new gamers were also attracted to VRChat after increasing numbers of Twitch and YouTube streamers began creating content for it.

VRChat more than doubled its active user base during the coronavirus pandemic, with the company taking advantage of the trend by continuing to hold parties and events on the platform. 

Today, VRChat features over 25,000 community-created worlds.

On New Year’s Eve 2020, the platform set a new record of 40,000 concurrent users, causing the platform to temporarily shut down after the increased usage was interpreted as a denial-of-service attack. 

VRChat revenue generation

VRChat makes money by selling premium subscriptions and merchandise through its online store.

Premium subscriptions

VRChat Plus is a premium subscription giving users access to enhanced features, such as customizable nameplate icons, photo invites, and one hundred favorite avatar slots.

The price for VRChat Plus in Steam and the Oculus Quest Store is $9.99 per month. Steam users can also choose to pay $99.99 per year.

Merchandise sales

Here, users can purchase a range of VRChat-branded merchandise. Items for sale include smartphone cases, mugs, pillows, tote bags, sweaters, tops, and shirts.

Connected Case Studies

Gaming Business Models

The gaming industry, part of the entertainment industry, is comprised of three main types of players. From game engines, which help developers build their games. To publishing gaming houses. And gaming consoles. While the prevailing business model for decades has been that of selling the console at cost and making money on games. Digital games changed the way games are distributed and sold, and they opened up the way to free-to-play models.

Free-to-play Business Model

A free-to-play is a model that became particularly popular in gaming. Free-to-play is also commonly referred to as free-to-start. For instance, companies like Epic Games have launched popular games like Fortnite’s Battle Royale, which had ingrained a free-to-play model. This is a model that become extremely popular in the digital age of gaming.

Epic Games Business Model

Epic Games is a gaming company, that develops, publishes, and distributes games. It comprises the Unreal Engine, making money through licensing agreements with developers and creators. Its games (like Fortnite) mostly follow a free-to-play model on PC and an in-app purchase model on the digital marketplace. And its storefront Epic Games Store, taking a 12% cut on games’ sales.

Play-to Earn Business Model

The play-to-earn model is a business model allowing gamers to farm or collect cryptocurrency and NFTs that can be sold on the market. This model has become a standard already in the “crypto gaming industry,” where the blockchain-based games enable token economics to kick in as an incentives mechanism at scale for users to play and be engaged.

Axie Infinity Business Model

Axie Infinity is an NFT-based online video game developed by Sky Mavis, a Vietnamese game studio founded by Trung Nguyen in 2018. Nguyen combined his interest in blockchain accountability and the CryptoKitties craze to launch the game in August 2018. Sky Mavis generates the bulk of its revenue via the 4.25% fee it charges on all in-game purchases. This includes land purchases, monster NFT trading, and monster breeding. Axie Infinity requires that all new players purchase three monsters to get started. Since the cost can run into hundreds of dollars, Sky Mavis will lend players the monsters and collect a 30% interest fee once the player starts earning currency.

Read Also: How Much Money Has Fortnite Made, Epic Games Business Model, Free-To-Play Business Model, Gaming Industry, EA Sports Business Model, Discord Business Model.

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