#1666: VRChat CEO Graham Gaylor on Exploring Various UGC Monetization Strategies

I did an interview with VRChat co-founder and CEO Graham Gaylor at Meta Connect 2025 where we talk about the various different monetization strategies that VRChat has been exploring with their user-generated content platform. VRChat announced layoffs for 30% of their employees back on June 12, 2024, and so this is the first time I've had a chance to interview any of the VRChat executives since then. I used to have a pretty consistent streak of interviewing either VRChat leaders or employees at various VR conferences running from 2014, 2015, 2016, 2017, 2018, and 2019, but after the pandemic they were not giving as many public interviews. I did however recently cover the VRChat Avatar Marketplace as well as a conversation with VRChat's new Trust and Safety lead Jun Young Ro about his plans to overhaul and modernize VRChat's Trust and Safety processes, especially as users like Harry X were pointing out some gaps in their moderation processes. I had a chance to chat with Gaylor about some of the early decisions in VRChat for making custom avatars easily uploadable since version 0.3.5 on March 16, 2014 when co-founder Jesse Joudrey made his first public contributions to the project. Joudrey elaborated on his vision of what he considered to be "one of the corner stones of virtual reality and any cyberpunk offshoot... Customization. I don't want any limit on who or what I can be in virtual reality." I had dug up these dates and posts in the write up for episode #1408 where I went down a deep rabbit hole of tracing down some of the origin story for VRChat. Gaylor had actually passed along some early emails and documentation of the early days of VRChat for that write-up. The decision to make avatars completely customizable has been part of the magic and success of VRChat. But centralized and controlled identity has traditionally been one of the core pathways for monetization. In a conversation with VRChat community members after the June 2024 layoffs, qDot told me, "You cannot put the asset genie back in the bottle for VRChat. They can't just come up with an asset system that works this sort of centrally-regulated way now. Everyone is used to throwing these assets around, selling them on Gumroad, selling them on Booth." So I had a chance to talk with Gaylor about his paradox of customizable identity being both the secret sauce of VRChat, but also the clearest traditional path for monetization. You can see more context in the rough transcript below. This also happens to wrap up my coverage of Meta Connect 2025, and here's a recap of the different stories and coverage if you'd like to dig into more details of other things that were announced this year. #1652: Kick-off of Meta Connect Coverage with Meta Ray-Ban Display Glasses Insights from Norm Chan #1653: XR Analyst Anshel Sag on Meta's AI Glasses Strategy #1654: CNET's Scott Stein's Reflections on Meta Ray-Ban Display Glasses Implications #1655: Meta Horizon Studio News and Virtual Fashion with Paige Dansinger #1656: Kiira Benz Part 1: "Runnin'" Large-Scale Volumetric Music Video (2019) #1657: Kiira Benz Part 2: "Finding Pandora X" Bringing Immersive Theatre to VRChat (2020) #1658: Kiira Benz Part 3: Immersive Storytelling Career Retrospective (2025) #1659: VR Gaming Career Retrospective of Chicken Waffle's Finn Staber #1660: Enabling JavaScript-Based Native App XR Pipelines with NativeScript, React Native, and Node API with Matt Hargett #1661: State of VR Gaming with Jasmine Uniza's Impact Realities and Flat2VR Studios #1662: Meta Connect Highlights & Meta Horizon News with JDun and JoyReign #1663: ShapesXR Updates & Neural Band Design Implications of Transforming Your Hand into a Mouse #1664: Resolution Games CEO on Apple Vision Pro Launch + Gaze & Pinch HCI Mechanic in Game Room (2024) #1665: Resolution Games' "Battlemarked" Blends Mixed Reality Social Features with Demeo and D&D Gameplay