EXCLUSIVE: A War Of Ideology Is Taking Over The Metaverse. What's At Stake For Big Tech?

The metaverse: a future version of the internet that everyone loves to brag about but doesn’t really exist yet.

As we discussed in part one of this two-part series, much of the technical infrastructure needed to build the metaverse (beyond today’s hype) is still being addressed.

The monumental task of bringing together different technologies in a way that’s never been done before isn’t even the greatest challenge for building a fully functional and truly open metaverse.

If the metaverse reaches its full potential, it won’t be simply a network of interconnected 3D worlds, but a new layer of territory for humans to inhabit, with its own economy, legislation and political forces, the rules of which are being debated among big tech companies and activists looking to decentralize and democratize the space.

A war of ideology is rising over the horizon and its outcome could impact the lives of everyone on the internet.

The Challenge Of Interoperability

Among the many challenges that make up the colossal task of building a fully operational metaverse, interoperability quickly rises as one of the most urgent topics.

Interoperability can be explained as the ability for various systems and platforms to seamlessly interact with one another. This capacity is fundamental for the creation of “the metaverse” as opposed to various standalone “metaverses.”

In a fully developed metaverse, users should be able to take their avatar from platform to platform, along with all of the NFT objects associated with that avatar, like clothes and accessories.

Those should be fully owned by the user and not liable to the control of any particular centralized platform.

For this to become reality, a great number of key actors first need to agree on the basic rules and language that will make up an operational metaverse.

Having perceived the challenge, the tech sector has is making various efforts to tackle it.

The Efforts To Build One Metaverse: One of such efforts was launched in 2022 by the World Economic Forum in an initiative called “Defining and Building the Metaverse.” According to the WEF, the initiative will share and accelerate insights and solutions that will bring the metaverse to life, between global leaders in industry, civil society and government.

Another effort is called the Metaverse Standards Forum and it defines itself as “a venue for cooperation between standards organizations and companies to foster the development of interoperability standards for an open and inclusive metaverse.”

The forum launched in June 2022 with 35 starting companies including Meta Platforms Inc META, Microsoft Corporation MSFT, Sony SONY, Adobe ADBE, Autodesk ADSK, NVIDIA Corporation NVDA, QUALCOMM, Inc. QCOM, Unity U and Epic Games.

Two weeks later, the forum — which is open to all organizations and requires no fee to enter — had 1,000 participant organizations, and the number keeps growing.

“This is the first time that we've tried to have this level of coordination between multiple standards bodies,” as well as for-profit actors, says Neil Trevett, the forum’s chair. 

Trevett is VP of developer ecosystems at Nvidia, where he’s worked for the last 17 years, as well as president of the Khronos Group, a nonprofit consortium of organizations developing royalty-free interoperability standards for 3D graphics, virtual reality, augmented reality and more.

“What is the metaverse by definition? The answer is we don't know,” says Trevett. “The one thing we do know is that it's going to bring together a bunch of technologies that never had to work together before.”

The creation of open standards is central to that endeavor.

“We're making the bricks for building the metaverse, even though we don't know what the final design of the ‘Metaverse Cathedral’ is going to be,” says Trevett.

Standards Needed For 3D, Virtual Reality: The most obvious technologies that will need to work across platforms relate to the seamless operation of 3D and virtual reality.

One example is taking 3D objects or avatars from one virtual world to another, which can become an even greater challenge when considering that in the metaverse, most of the objects will be generated as user-created content.

“If you put a lot of effort into crafting your avatar or some other object, your race car or whatever it is, you will want to take it with you,” says Trevett.

A typical 3D object found in a game will normally have a specific visual appearance, a geometry, a range of textures and animations that make it, say, a sword and not a dog.

The 3D asset will also include meta information on how it behaves within a specific virtual world.

“If there's a physics engine running on that, the runtime will assign properties to this object,” says Trevett. These properties include weight (or how it's impacted by gravity), density (does it float or sink?) and other characteristics.

Today, most platforms and video games deal with these issues in different ways, from the types of files they use to host these objects to the coding language in which the objects themselves are written.

In Trevett’s words, 3D assets need to be transformed into “metaverse assets,” and for that standardization is key, “so everyone can agree on a portable way of assigning these behaviors to 3D assets.

"There's no open standards for that yet."

One of the forum’s current projects is focused on agreeing on a file format for 3D objects that can work across platforms carrying all the information that the user would want applied to that object.

But the forum’s efforts are not just limited to the engineering behind a 3D version of the internet.

The Challenge Of Privacy: Along with many other technical issues to resolve (like networks that can host thousands or millions of users at once), rules for ethics and privacy in the metaverse also need to be written and agreed upon.

For Animoca Brands co-founder Yat Siu, the technical aspects of a fully operational metaverse are not the main problem to resolve. Rather, it is ensuring that full digital property rights are enshrined in law.

According to a Meta, a key aspect of the metaverse is that it transcends national borders while also creating an entirely new economic ecosystem, with its own currencies and set of incentives for users and other actors to participate, contribute and want to use the platforms.

In a metaverse that is actually open and decentralized, actors will need to agree on what incentives are applied to allow for uses to gain value while allowing companies to turn a profit.

“The challenge of universal metaverse standards will be solved when incentives among all groups are similarly aligned,” says Siu.

Ideally these incentives won’t mimic the classic Web2 model of today, where free products and services are offered in order to monetize and sell private user data.

“There are absolutely plenty of new business models that are ushered in by the advent of Web3, and they revolve more around creating communities and allowing, for example, those communities [and individuals] to interact with each other,” says Saro McKenna, co-founder of the Alien Worlds platform.

A possible model around this dynamic works by charging platform fees on user transactions, much in the way in which taxation works in a real-life economy.

Being a person that exists in the real world has no cost per se, but there is a cost associated with maintaining that existence that forms the basis for human economy. That dynamic can be replicated in the metaverse.

If the metaverse becomes truly decentralized, users won’t be forced to exchange their NFT assets on any particular platform, which has an advantage against a tax system that in many cases works as a monopoly.

“When I say free, I mean free at a level of the rules of engagement, not necessarily that every single thing is free,” says McKenna. 

“Creating these sticky communities, then people feel a lot of loyalty to those communities and then they're willing to buy things,”

McKenna says the model is not so different from a freemium model, but “it's also just selling goods and services to people within this metaverse economy.”

What If Powerful Actors Can’t Agree On Metaverse Building Blocks?

What is at stake is more than the technical interoperability of the next iteration of interactive internet platforms.

Today, many of the virtual worlds commonly referred to as “metaverses” work as siloed environments, each with their own communities, digital currencies, economic systems and incentive structures.

“We're in danger of really ending up in a situation where things become unnecessarily complicated because simply we didn't coordinate as we are now,” says Trevett from the Metaverse Standards Forum.

A worst case scenario is one where coordination can’t be achieved and multiple standards emerge. Without an industrywide agreement, more companies could go on to make their own standards and make things even worse.

This scenario would not only endanger the mere existence of the metaverse as a universal environment for digital human interaction, but also threaten to bury the decentralized aspect of the technology, giving the most powerful players excessive control over the lives of its most engaged users.

If the metaverse becomes reality 2.0, allowing Big Tech companies to centralize its most basic rules, it could be the closest thing we’ve had to a dystopian future.

A key issue at stake is true digital ownership. As users build and create objects, buildings and even profitable businesses within these virtual platforms, they’ll want to be the sole owners of those assets, and not have the platforms themselves be the ones to own and have agency over how to use them.

“If we allow Web2 platforms to control and weaponize the metaverse, we risk endangering human agency. The Metaverse should not be like Ready Player One, but rather a multiverse with various metaverses interacting with one another with no central authority. We must ensure that the Metaverse is really decentralized,” says economist Marc Arbonés. 

According to his comments, big tech is driving technological innovation and creating "walled garden ecosystems" with few to no incentives to establish and maintain interoperability between their ecosystems.

Most —if not all— big tech companies have joined the Metaverse Standards Forum, in an open call to collaboration, at least on the technical aspects of building an interoperable metaverse.

For some commentators, like Ryan Gill, founder of the OpenMeta platform, Web3 has the ability to retrieve the lost values of the first version of internet, often called Web1.

He's referring to the concept of empowering the end user through decentralization of information being universally understood as a noble goal. 

That power, which became accrued within a handful of very powerful tech companies through the rollout of Web2 business models, can now be “given back to the people” through the use of blockchain and decentralization.

“It’s not a fact that Facebook or [Mark] Zuckerberg is the villain here. It’s just the fact that we’re reaching peak centralization. Anything past this point becomes more and more unhealthy. An open metaverse is just a way to build a solution, instead of more of a problem,” said Gill in an interview at the Monaco Crypto Summit.

The entrepreneur fears that, in a bid to maintain shareholder value, legacy big tech companies could perpetuate business models that don’t put the end user center stage, but rather use them as a means to achieve greater profits.

Gill still is pessimistic on the prospect of achieving one interoperable metaverse from scratch that encompasses all of the main tech giants of today.

He expects the open metaverse to be “a smaller network than even one corporate virtual world,” for the first few years at least, due to the massive adoption that products from Meta or Google now enjoy.

Why Big Tech's Metaverse Plays Could Flop: Alien World’s McKenna is also a founding member of the Open Metaverse Alliance for Web3, which groups several virtual world platforms like Decentraland, The Sandbox and many others to address interoperability challenges by proposing standards and by facilitating collaboration.

McKenna is not worried about a potential risk posed by big tech companies trying to own and dominate the future of the metaverse by exerting their influence over weaker players.

“It's really not in their DNA to be effective metaverse participants. That's not to say some of them won't find success, and I wish them all the best, but I don't think they have a massive competitive advantage over anybody else,” says McKenna.

In her view, the legacy mindset that big tech companies bring to the table can become counterproductive to their plans of success in a decentralized Web3 environment, as “it’s not so easy to modify an existing business model to make it work in Web3.

“I don't feel threatened by tech giants. I think they probably feel quite threatened by Web3 and by the democratization and open systems that are being created.”

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