A vibe check inside Reddit

This week, I have a temperature check from inside Reddit, a scoop about Meta lowering the age limit for its Quest headsets, and an interview with one of the few developers Apple has invited to build for the Vision Pro.

Given the fierce revolt among Reddit’s users to the way CEO Steve Huffman has rolled out the company’s new API pricing, it’s natural to wonder how the people who work for him feel. He has, after all, thrust the company into an uncomfortable spotlight. It’s never a good sign when you have to caution your employees about wearing company-branded swag in public.

After chatting privately with Reddit employees this week, I was surprised to hear that there isn’t as much internal opposition as I would have thought. My takeaway is that Huffman seems to, at least for now, have the backing of his troops. The vibe I’ve gotten is that, like Huffman, most believe this backlash will blow over. Internally, there has been a tone shift recently from leadership and a push to rein in costs, slow hiring, and get the business out of the red. These API changes are part of that.

“The company is largely behind Steve,” one senior employee told me Thursday. “I think the internal narrative feels pretty clear to everyone and there isn’t much controversy,” said another. “Makes me wonder if we just didn’t handle the comms / rollout as well as we could.”

That last part is hard to argue with. Huffman is clearly emotional about the reaction to Reddit’s sudden pay up or shut down stance on data access, as his interview with my colleague Jay Peters yesterday lays bare. What he clearly didn’t anticipate is that people have strong feelings about Reddit, and that these moves would upset a vocal, albeit small, percentage of his user base.

His goal is to get Reddit’s business to break even as quickly as possible, and when you look at the numbers, cutting the millions of dollars a year it takes to support third-party apps is an obvious move. Doing so also represents an opportunity to funnel more users into Reddit’s own apps, where it can show them ads. (I’ve seen it suggested that the company could show ads in third-party apps through the API and do a revenue split with developers, but that’s technically impractical.) Sales leaders from Reddit are doing a full-court press at the Cannes Lions advertising festival in the south of France next week to try and convince marketers to spend on the platform, just like they did at CES at the beginning of this year. That’s some awkward timing.

Reddit filed to go public at the end of 2021, just a few months before the Federal Reserve started raising interest rates and the stock market decided that money-losing, topline-focused businesses were no longer in vogue. If Reddit still hopes to be publicly traded at any point in the foreseeable future, it’s going to have to become profitable. Huffman knows this and clearly feels tremendous pressure to make it happen.

Could he have handled these API changes better? Absolutely. He could have been less combative in his communication. He could have given existing apps like Apollo more time to pay or even grandfathered in their existing users to soften the blow. But he chose to tear the Band-Aid off at once. It turns out, that stings.

Government scrutiny of how tech companies handle their underage users is continuing to heat up. A flood of bills in Congress on this topic seeks to strengthen the power of regulators and even ban kids under 13 from social media entirely.

Enter Meta, which is lowering the minimum age for its Quest headsets from 13 to 10. After I heard about the plan and contacted Meta for comment this week, spokesperson Joe Osborne confirmed it and shared a blog post about the news that the company is planning to publish soon. It says that parents will have to approve the creation of a kid’s account and that Meta will only recommend apps that are rated safe for that age group. Ads also won’t be shown to kids.

Perhaps most importantly, a 10 to 12-year-old’s Meta profile and avatar, which the Quest uses for all kinds of apps, will be set to private by default, “meaning people won’t be able to follow preteens without their or their parent’s approval.” Meta’s blog post says that only parents can turn this safety feature off. And Horizon Worlds, the open-world, legless social platform for the Quest, will remain a 13-and-up experience, at least for now.

It’s easy to see why Meta is doing this. The company knows that kids want to use VR headsets, and it’s better to give them a more restricted experience than just let them lie about their age. If I had to guess, Meta also wants to get ahead of any potential lawsuits or fines, like the $520 million one recently levied by the FTC against Epic Games. In that case, the agency found that “Epic was aware that many children were playing Fortnite,” which, duh. Now Meta can at least say that it offers an underage option with strict parental controls.

Even if this is a good decision, Meta knows it’s a sensitive subject that will likely result in more angry Senate letters. The company tried its best to keep the plan, codenamed “Project Salsa” internally (spicy, I guess?), from leaking. It required involved employees to sign a separate legal disclosure and mark docs as “A/C privilege,” should the FTC still come knocking.

Apple talked surprisingly little last week about games for the Vision Pro. The only third-party gaming app it has shown off for the headset is Rec Room, a Roblox-like platform with a young user base that also happens to be one of the biggest titles on the Quest.

I recently caught up with Rec Room CEO Nick Fajt to see what he thought about developing for the Vision Pro and what its introduction means for the headset market overall:

What was it like working on bringing Rec Room to the Vision Pro? I’m curious about the tradeoffs of developing for a platform like this and what you all experienced building on it early.

We were very excited to get the opportunity to build Rec Room for the Vision Pro. I wouldn’t categorize any of our work as tradeoffs as much as adaptations. The Rec Room experience is certainly different on the Vision Pro, but it doesn’t feel like you’ve lost anything. In fact, it’s quite the opposite. We think Vision Pro brings a new level of joy to the co-presence and social behaviors that Rec Room enables.

Any advice for other developers who are thinking about dipping their toes in now?

If you’re new to any space, our advice would be to ignore the hype, endure the inevitable winters, and know that anything worth building takes time.

Apple’s decision to barely touch on gaming for the Vision Pro surprised a lot of people. What’s your reaction to that positioning and being one of the only gaming/3D-world titles with early access to the device?

We’re thrilled to be the first immersive game that Apple chose to showcase for the Vision Pro. I think our expertise in VR and also being a radically cross-platform game has given us a unique advantage when it comes to taking on spatial computing.

Ultimately, we think spatial computing can change the way people socialize, play, and work. Games will always be a part of the way people use technology, but we think the future of these devices looks more like a general-purpose computer.

Does this change Rec Room’s commitment to the Quest platform in any way?

Not at all. We remain as committed to VR as ever. It’s the place where over 15 million people discovered Rec Room. As VR hardware sales continue to grow with the introduction of Quest 3 and others, we think that number will grow significantly.

Mark Zuckerberg thinks that Apple entering the headset space will ultimately be good for the industry and catalyze more interest. How would you characterize what this moment means for the industry?

It feels validating in many ways to have Apple entering the space. However, I think it’s clear that the Vision Pro is a device with a vision that is distinct from what has gone before. It’s clearly very ambitious, and as we’ve said, anything worth building takes time.

We believe in that long-term vision, and so we’re very comfortable being one of the first folks on the dancefloor and watching the party grow.

“It was a little bit like birthing a porcupine.” - Apple’s Mike Rockwell explaining the introduction of the Vision Pro on John Gruber’s WWDC Talk Show.

​​That’s it for this week. I’ll be back next Friday with another issue. In the meantime, if you have any story ideas or feedback, please let me know. I’d also love to feature your thoughts in my next issue — you can stay anonymous.

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