Big-Tech and Metaverse Part 3: An oligopoly in the making?

Meta, Microsoft, and other tech giants are joining hands for metaverse tech, raising fears of a possible oligopoly. Epic Games CEO Tim Sweeney, who has warned against the prospect of another online oligopoly, is one of the ardent proponents of an open metaverse. The Internet is open to everyone. Will the metaverse be open to all like an open internet?

Aahan Dogra, Founder, NoCap, feels that with Meta, Microsoft, and other tech giants joining forces for metaverse technology, the specter of oligopoly looms. However, at the same time, he says, “The metaverse can be a tapestry of multiple, interconnected worlds, offering both open and controlled spaces.

Dogra further adds, “Epic Games CEO Tim Sweeney champions the cause of an open metaverse, stating, ‘The metaverse should be an open, interoperable universe of platforms’ (Sweeney, 2021). The co-existence of diverse ecosystems could be the key to unleashing its true potential. Remember, ‘a metaverse divided is a metaverse conquered!’.”

Also read:

Big-tech & Metaverse Part1 - Will tech giants be the gatekeepers of Metaverse?

Big-tech & Metaverse Part 2 - Are existing laws sufficient or are new ones required?

The future of the metaverse is dependent on a delicate balance between innovation, collaboration, and regulation, notes Dogra, adding, “It’s up to us, the pioneers, visionaries, and rule-makers to ensure that this new frontier flourishes as an interconnected cosmos of endless possibilities. As Friedrich Nietzsche once said: ‘He who has a why to live can bear almost any how.’ Therefore, as a society, we need to decide what values and principles we want to uphold in the metaverse, striving towards an open, fair, and accessible space for all. We need to work towards creating a metaverse that truly represents the best of us and our aspirations for the future. Only then can we be confident that the metaverse will be a source of inspiration and wonder for generations to come.”

Is the Internet really open?

It is human nature to look at the past with rose-coloured glasses, quips ReelStar Co-founder Navdeep Sharma. He reminds us the Internet’s evolution serves as a “cautionary tale”.

“Lauded as the epitome of open communication and democratized access, the Internet’s initial growth surge was far from open or democratised people appear to have forgotten the ‘Browser Wars’, the lack of interoperability between various web “standards” as supported by competing browsers, the way tech companies used their positions of market dominance to wipe out competitors or to seize market share. The Internet we currently have, is now, more so than at any other time, in the control of a select few. Its current ‘openness’ is more realistically a ‘glitch’ in its timeline. Its access, the content it serves, is at the whim (and control) of governments and big tech. The current (big) tech playbook is all about the creation of monopolies, and the protection of those monopolies,” remarks Sharma.

He believes that current economic models and systems inherently favour the creation of oligopolies. Infrastructure, even digital infrastructure, is very expensive, and especially so at scale. “The question then becomes, is ‘open’ nothing other than a myth of the digital revolution, an illusion crafted to deceive the masses and empower the oligopolies? Fortunately, the answer is clear – yes and no! Flaws in human nature are deeply ingrained, with political, legal, economic systems historically constructed to sustain these flaws. Current frameworks, including the digital, prioritize the powerful over the vulnerable, status quo over progress, and individual interest (of the powerful) over the collective good,” Sharma says.

He draws parallel with the global response to climate change, which has been left in the hands of governments and corporations. “The consequence is a planet under dire existential threat and no real solution. If such a threat, in the physical world, cannot motivate a considered response by governments and corporations, the digital landscape will inevitably face a similar devastation. It is time for a fundamental shift in perspective, one that confronts the inherent flaws in human nature. The digital revolution has delivered an enabling technology and philosophy in Web3, that can, for the first time in history, practically realise system(s) that prioritise the collective good, environmental sustainability, social and economic justice, inclusion and diversity,” he points out.

According to Sharma, “The transformation begins with education, one that inspires community-led initiatives and grassroots movements to take action. A better, more just and equitable society, in a sustainable world, results from our collective willingness and commitment to deliver on ‘open’.”

Pratik Gauri, Co-Founder & CEO, 5ire, is optimistic that metaverse will become an open system available to all. He notes, “Technologically speaking, along with a nod to recent innovations, anything is possible. That being said, it is well known that Metaverse is supposed to be ubiquitous with a person’s alter ego, AKA his or her avatar, which is supposed to be present everywhere via the aid of AR and VR technologies. I think once the metaverse begins to be a global reality, innovation will make it possible for it to be an open system that serves all.”

On the other hand, Sameer Dhanrajani, President, 3AI, has a different take on the possibility of monopoly by the big-tech. First of all, Dhanrajani says, the competition among large companies for customer hoarding has led to fascinating results and innovations.
Furthermore, he points out, the tech giants we know today, that is, Amazon, Facebook, Alphabet, which are taking up more and more space in the metaverse, will soon be challenged by new players.

“Some studies on the oligopolist model have shown that (with certain assumptions) this can be favourable to the consumers’ wellbeing, and we can already witness it. All the prominent participants in the metaverse development are focusing on very different technologies and sectors: Fortnite focuses on gaming, Meta on the social environment, Microsoft on working tools. Competition makes room for cooperation. Unlike the traditional online technologies, where you have GSuite, 365, AWS, Workplace, all of them competing with each other, in the metaverse each of those companies has its own role. The hardware these companies and others are producing to access the parallel universe is also different: AR glasses, VR viewers, helmets and so on and on. So, there’s a huge risk of oligopoly; however, it isn’t necessarily bad for consumers,” he adds.

Meanwhile, Sumit Ghosh, CEO and Co-Founder, Chingari, is certain that the collaboration of Meta, Microsoft, and other tech behemoths in the development of metaverse technology may result in an oligopoly, with these companies dominating the metaverse and stifling competition from smaller players. However, he adds, it is important to note that the metaverse is still in its infancy, and efforts are already underway to create decentralised and open metaverse platforms.

According to him, an open metaverse, similar to an open internet, is certainly possible. “It would necessitate the creation of interoperability standards, open-source software, and decentralised architectures that enable greater participation and competition among various players. Companies would also have to commit to making their platforms interoperable and allowing for seamless integration with other metaverse platforms. In our opinion, and as a decentralised company ourselves, an open metaverse is entirely feasible with the proper standards and regulations in place. To ensure that the metaverse remains accessible and competitive for all, businesses, policymakers, and stakeholders must collaborate to create an open metaverse,” says Ghosh.

Lumos Labs Founder Kaavya Prasad believes that an open metaverse is possible. She points out that the involvement of tech giants in the burgeoning metaverse space is bound to raise concerns for the other players. She is optimistic that an open metaverse can be achieved soon.

“Given their strength and resources, the leading tech companies can upscale their offerings quickly and can gain an influential position in the market. Concerns regarding limiting control, innovation, and fair competition are valid and have been observed in the other tech fields such as cloud computing, rather strongly. An open metaverse would be the ideal virtual world where any user can access and contribute to the network without any gatekeepers and restrictions. This has been a primary goal for the web3 metaverse sector along with interoperability and accessibility,” says Prasad.

According to her, with the current wave of metaverse adoption with new collaborations and partnerships happening every day, new innovations are entering the space that make the experience and navigation easier and seamless. Therefore, she adds, an open metaverse is not a farfetched reality but can be achieved soon.

“With the gap between Web2 and Web3 decreasing rapidly, moving past the concerns, the amalgamation of these tech worlds can propel the industry towards an open infrastructure sooner than expected. Leveraging the advanced user interface and user penetration of the web2 world can give the web3 sector the push and adoption it requires along with certain resources, tech talent, and a mainstream user base,” Prasad concludes.

The view towards Web2 and tech giants coming together for the Metaverse Standard Forum (MSF) is dichotomic in the Web3 world, notes Anantha Krishnan, Founder, MOI. “Though it is apparent that pure Web3 firms with considerable exposure to blockchain technology and digital assets are lacking adequate representation in this club, some Web3 experts are looking at this as an opportunity to have a Web2 and Web3 bridge that leads to hybrid innovations and increases collaborations between the two tech sectors. While others feel that this is an oligopoly in the making where the tech giants might restrict overall control in their hands as they are used to closely controlled environments. Yet, recently, Meta has been promoting the idea of an open and interoperable metaverse and how it aims to build this inclusive ecosystem with the help of the tech community,” says Krishnan.

He reminds us that the Web3 sector has forecast an open and interoperable metaverse since the inception of this technology. “Solutions such as MOI already have the technology prowess to enable the transfer of digital assets across metaverses, thus, an open metaverse has been one of the key goals for this technology. An open metaverse is definitely not beyond the realm of possibility due to the technology constantly advancing to enable accessibility, scalability, and interoperability. The Web3 community has expanded massively since its beginning and now has more influence and power to voice their concerns in the time of need. Hence, as the popularity and adoption of emerging technologies rise, there will be threats to monopolise metaverse tech due to the promising returns it can give which will have to be dealt with. Additionally, the Web3 share within the metaverse sector is enough to prevent centralised control and continue the race to an open and interoperable metaverse,” he adds.

The question of whether an open metaverse is possible is a bit more complicated, feels Samir Asher, Founder and COO, Tonic Worldwide. “There are additional factors at work, such as technology advancements, legislative frameworks, and the behaviour of businesses and individuals inside the metaverse ecosystem. Certainly not something that can be accomplished overnight, and there will be many obstacles to face along the way,” concludes Asher.