Metaverse interoperability: Can a conglomerate of big tech companies unite to make the metaverse a reality?

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  Quantumrun Foresight
• May 6, 2022

Insight summary

The metaverse is shaping up to be the next big frontier in digital interaction, fueled by major tech companies aiming for seamless, cross-platform experiences. This emerging online world promises new opportunities for socializing, working, and even governance, but it also poses challenges like making different metaverse platforms interoperable. From reshaping traditional business models to introducing new forms of digital real estate and civic engagement, an interoperable metaverse could have far-reaching implications on various aspects of society.

Metaverse interoperability context

Large technology companies are investing significant resources to make the metaverse a reality. This next-generation online environment will likely depend on the investments of top technology companies developing their own metaverses and potentially merging or making them interoperable at a later date. As a result, the success of the metaverse could hinge on how well these companies collaborate and standardize technologies for a seamless user experience.

Venture capitalist Matthew Ball defined the metaverse as a marriage between the physical world (where users leverage wearables such as virtual reality headsets) and digital spaces (complex online systems). In the metaverse, transactions and experiences could be seamlessly shared between users that interact with the system. However, the primary factor that could make the metaverse a broadly adopted success is data interoperability, where digital assets such as currencies and digital assets (e.g., NFTs and personal avatars) would be accepted across all online systems.

In October 2021, Facebook rebranded by changing its name to Meta, while also publicly reorienting its business investments into metaverse development. At the same time, China-based companies such as Tencent and Alibaba were in competition to register metaverse-related trademarks. According to a 2021 Bloomberg Intelligence Report, the metaverse industry could be worth up to USD $800 billion by 2024.

Disruptive impact

The race among top technology companies to not only create but also dominate the metaverse market is heating up. Before its rebrand, Facebook, now Meta, announced a shift from 2D social media platforms to a 3D metaverse where users can interact in both digital and physical spaces. Mark Zuckerberg envisions a future where users can teleport across different online platforms, joining various experiences through their digital avatars. 

Epic Games, the US company behind the massively popular online community Fortnite, is another key player aiming to build its own version of the metaverse. Epic Games believes that for the metaverse to function effectively, digital companies need to work together to allow seamless data integration across all ecosystems. This perspective gained public attention when Epic Games sued Apple over its App Store policies, arguing that Apple's 30 percent transaction fee and monopolistic practices hinder the development of a more open digital environment. 

For individuals, the development of the metaverse offers new ways to socialize, work, and even attend events. Companies stand to benefit from a new frontier for marketing, customer engagement, and even remote work solutions. However, they may need to adapt their business models to fit into an ecosystem that values interoperability and openness. Governments, too, can leverage the metaverse for public services and civic engagement, but they may need to address challenges such as data privacy, digital divide, and the potential for misuse.

Implications of metaverse interoperability

Wider implications of large tech companies developing interoperable metaverses may include:

• Companies signing licensing and sales agreements for cross-platform interoperability, leading to a more seamless user experience as people can jump from one metaverse platform to the next without login restrictions or data packet loss.
• Large technology companies partnering with influential brands and content creators to design metaverse spaces, assets, and experiences, resulting in a new form of digital marketing and brand engagement that could reshape traditional advertising strategies.
• Companies transitioning to a metaverse work system, enabling employees to work from anywhere and build customized workspaces within the metaverse, which could lead to both increased privacy and enhanced cooperation among remote teams.
• An explosion of new small businesses and startups creating service-based offerings that work across various metaverse platforms, providing a boost to entrepreneurship and creating new job opportunities in the digital space.
• A shift in real estate dynamics as virtual property within the metaverse becomes a valuable and transferrable asset, potentially impacting the traditional real estate market and introducing new forms of property taxation or regulation.
• Governments leveraging the metaverse paltforms for simultaneous civic engagement and public services, such as virtual town halls or educational programs, which could democratize access but also raise concerns about data privacy and security.
• Increased energy consumption due to the computational power required to run complex metaverse environments, posing challenges for sustainable development and climate change mitigation efforts.

Questions to consider

• Do you think there are enough incentives for large technology companies to make their metaverses interoperable or are they more likely to make them closed/walled-off environments?
• Do you think governments will step in to legislate interoperability?
• Would you be willing to work and share experiences in the metaverse?