Blog: Can dominance in the metaverse be avoided? - Mobile World Live

Blog: Can dominance in the metaverse be avoided?

04 JAN 2023

As the metaverse hype went into overdrive in 2022, it didn’t take long for the European Commission (EC) to jostle for position, outlining an attack plan for the segment in which it vowed to ensure “no private player” holds all the power in the new virtual world.

This comment sent my mind back to a blog I wrote in 2017, when the same European regulator made another big statement around market dominance, vowing to tackle “unfair contractual clauses and trading practices” between platforms and businesses.

Now, while not naming the platforms, it was clear that dominant operating systems, app stores and search engines would be targeted. And by that description, there really are only two companies that, even today, fall under the dominant category.

In my blog, I raised the question of whether Apple and Google were unfair gatekeepers of the internet, considering they did, and still do, hold all the keys and set the terms of access to smaller companies and businesses.

With the metaverse emerging as what some consider (although there are equally as many sceptics) the next evolution of the internet, is history about to repeat itself?

And despite the EC’s early resolve, will there be dominant players in this virtual world that set the terms, requiring everyone else to play ball or fail?

Meta makes its mark
In the statement, European Commissioner for the internal market, Thierry Breton, said the metaverse must embed European values from the outset, virtual worlds had to be developed based on interoperable standards and no one player should hold all the power, adding the EC would not tolerate private monopolies. “Innovators and technologies should be allowed to thrive unhindered,” added Breton.

Breton and the EC’s vision is one that would garner widespread support. A playing field in which companies work together and build up an ecosystem that is not dominated by one or two players is surely better for the end-user and for competition in general.

However, one major powerhouse is arguably already far ahead. While the metaverse concept has been around for years, it was really Facebook’s decision to change its name to Meta Platforms in late 2021 that put the concept on everybody’s lips.

Leo Gebbie, principal analyst, connected devices at CCS Insight, told Mobile World Live (MWL) “competition for metaverse dominance is already well underway”, and Meta signalled its intention to act as a thought leader when it changed its name.

Gebbie further noted a formidable position Meta has already built up in VR with its Quest headsets, as well as its portfolio of game developer studios.

“Coupled with heavy investment in augmented reality and the overall platform for spatial computing, it will take some time for other companies to catch up,’ he added.

So, with a solid foundation and a name that is very on-brand, a dominant player in the metaverse has arguably already been established.

Fragmented
Also speaking to MWL, Michael Inouye, senior analyst with ABI Research, holds a somewhat different view to Gebbie.

In the consumer segment of the metaverse, he argues the competitive space is relatively fragmented, and even though metaverse conversations started relatively recently, the build-up to the future and longer-term visions are based on pre-existing market trends.

For example, he notes that Meta’s work on the Quest platform may have been viewed as extended reality generic, but can now extend to the metaverse conversation. For gaming players, such as Epic Games or Roblox, the same is true.

“Each of these companies are entering the space at different stages or from different vantage points – add to this the lack of true metaverse standardisations and this creates a more fragmented market,” he said.

Inouye too acknowledged the work being done in the EU, noting that there are dominant players in the social media and mobile worlds, and efforts are underway to “address some of these competitive imbalances”.

Despite this, he does expect some larger players to emerge in the metaverse, although it as a segment “is too broad to fully replicate what we see in the mobile app ecosystem”.

Metaverse or metaverses?
Another stand-out part of the EC’s sweeping metaverse attack plan called out the fact that not one, “but many metaverses are being developed”. Breton explained that multiple metaverses, across entertainment, work, artistic creativity, real-life simulations, healthcare uses, among others were coming to the fore.

This, again, opens up an interesting debate around competition and dominance. Gebbie questioned the idea of “metaverses”, highlighting the fact that the pure definition of the metaverse is a single entity rather than multiple, in the same way “we have one singular internet rather multiple internets”.

He however accepts that the reality from the “utopian view” of an open landscape of interconnected virtual worlds is likely to be very different.

“The divergent interests of competing players seem likely to lead to divisions and competing approaches, possibly resulting in a segmented experience much like we see in the computing landscape today where platforms and operating systems battle for success.”

Coming back to the idea of the metaverse paralleling the internet, Inouye circles back to the term I used back almost six years ago – gatekeepers.

He insists the EC’s overall goal is avoid this type of dominance “that control the full flow of information, content and users”.

“In today’s internet, if everyone had to log into Meta or Amazon first just to browse the web, communicate, conduct commerce, work, then we would have a failure to create an accessible and open metaverse.”

Probe underway
With many powerhouses in technology yet to even set out their metaverse strategy, the idea of guessing who may end up being the dominant force is a long way-off.

However, it would be remiss not to mention that despite recent poor financials and spooked investors, Meta Platforms CEO Mark Zuckerberg continues to push ahead with the play, committing to invest around $19 billion in the segment this year alone.

And perhaps a sign of things to come, Meta is already facing allegations of attempting to buy metaverse dominance, with US regulator Federal Trade Commission probing its acquisition of a VR app developer.

Maybe I won’t need to wait six years to write about the next unfair gatekeeper.

The editorial views expressed in this article are solely those of the author and will not necessarily reflect the views of the GSMA, its Members or Associate Members.

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Kavit Majithia

Kavit joined Mobile World Live in May 2015 as Content Editor. He started his journalism career at the Press Association before joining Euromoney’s graduate scheme in April 2010. Read More >>

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