Metaverse interoperability: The key to this tech’s success

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  Quantumrun Foresight
• December 27, 2023

Insight summary

The widespread adoption of the metaverse could hinge on leading technology companies merging their proprietary platforms. Interoperability could encourage greater participation and help create a more immersive and unified experience for users worldwide. Additionally, collaboration among tech giants may lead to the development of standardized protocols and guidelines, facilitating further innovation and integration within the metaverse.

Metaverse interoperability context

The metaverse is a virtual world where people can engage with and explore their surroundings. Venture capitalist Matthew Ball described the metaverse as a fusion of physical and digital spaces that users can access through devices like virtual reality (VR) headsets. In an idealized future metaverse, individuals can effortlessly share transactions and experiences with other users across all device ecosystems and digital environments. Data interoperability is essential to achieve this vision, allowing virtual currencies, assets (such as non-fungible tokens (NFTs)), and avatars to be utilized across various online spaces.

Chinese companies, such as Tencent and Alibaba, are also making their presence felt in the metaverse race, competing to register metaverse-related trademarks. These developments indicate a growing interest in the metaverse across different industries and regions, further emphasizing the importance of creating a seamless, interconnected experience. According to a 2021 Bloomberg Intelligence report, the metaverse industry could be worth up to USD $800 billion by 2024. This staggering projection highlights the potential of the metaverse as an innovative technological landscape and a lucrative market for businesses.

Disruptive impact

One significant development is the emergence of small businesses and startups that provide service-based offerings through various metaverse platforms. These businesses cater to the unique needs of users and developers in virtual environments, offering products and services that enhance their overall experience. For example, Epic Games is collaborating with Manticore Games to create a platform that allows players to develop their virtual worlds. The platform will offer a 50-50 revenue split with developers.

Another trend involves large technology companies increasingly collaborating with renowned brands and content creators to design alternate reality spaces, assets, and experiences. These partnerships help create immersive and engaging virtual worlds that attract users while driving innovation and setting new standards.

Meanwhile, companies may increasingly sign licensing and sales agreements to enable users to move between metaverse platforms without losing data or encountering login issues. This interoperability ensures that users can access and engage with different virtual environments without being limited to a single platform. Some live gaming service providers, such as Microsoft's PlayFab and Amazon's GameLift, offer unified backend infrastructure capabilities to publishers, such as player account management, leaderboards, matchmaking, analytics, and voice chat. Epic Games' highly popular gaming community Fortnite has expanded its compatibility across nearly all major devices, such as PlayStation, Xbox, Nintendo Switch, iPhone, and Android. Epic Games also raised USD $1 billion in funding in 2021 for its metaverse expansion.

Implications of metaverse interoperability

Wider implications of metaverse interoperability may include: 

• The creation of a truly global digital community, enabling seamless interaction and collaboration between individuals from different cultures, backgrounds, and geographical locations. 
• The potential exposure of users (particularly younger ones) to new forms of cyberbullying, harassment, discrimination, and misinformation.
• More innovation and economic growth by creating new markets for goods, services, and experiences. This development could enable the rise of virtual economies, with users trading digital assets and currencies across platforms, and lead to increased competition among metaverse providers.
• The interoperable metaverse could become a powerful medium for political discourse and activism, enabling citizens to engage with political issues on a global scale. 
• New challenges in regulating digital spaces and safeguarding against the spread of disinformation, propaganda, and cyber warfare.
• Increased digital literacy and inclusive access to education, job opportunities, and social services.
• New technologies and standards in VR, augmented reality, artificial intelligence, and blockchain exist. 
• Increasing concerns about privacy, security, and the responsible use of technology.
• Job opportunities in content creation, software development, and digital asset management. However, it may also lead to job displacement in traditional industries as companies increasingly invest in virtual products and services.
• A reduction in physical travel and commuting, resulting in decreased carbon emissions and reduced strain on transportation infrastructure. However, the energy consumption required to power the metaverse's infrastructure and devices may offset these benefits, requiring a focus on sustainable energy solutions.

Questions to consider

• Are you interested in building a digital identity in an interoperable metaverse?
• What are the other potential benefits and challenges to you?