The still-nascent metaverse may be taking another large step toward institutionalisation. While several of the biggest names in the global tech industry seem to be competing feverishly to bring this all-encompassing version of the internet to fruition, this week’s establishment of the Metaverse Standards Forum may provide new common ground.
Big Tech Firms Join Hands
This past Tuesday, the establishment of the Metaverse Standards Forum was announced. This new organisation purports to have as its main concern technological interoperability between the platforms currently being created by different companies, which will allow for swifter technological advances and industry-wide standardisation. Major areas of focus will include graphics, payments, and user security, among others.
Among the forum’s founding members appear a veritable who’s who of worldwide tech leaders, from Alibaba (BABA) to Meta (META), Microsoft (MSFT), and NVIDIA (NVDA). While these, and many of the other firms who have already joined this collective effort, may be considered competitors at other times, they have unanimously pledged their support for the effort toward a joint buildout of this still-new technology.
Some market watchers may still be asking themselves questions regarding the exact nature of the metaverse and how it differs from the already existing internet infrastructure.
There is, as yet, no singular universally-accepted definition of the metaverse, but the term can generally be understood to mean a new sort of all-encompassing digital experience that will integrate cryptocurrencies, virtual reality, social media, and gaming. Some are predicting that the metaverse could in fact become an alternative world to which people will retreat to avoid the problems of reality, which do not seem to be lacking at the moment. Accordingly, it may come as no surprise that one of the world’s biggest technology and social media companies is investing big in this developing sphere.
Meta Shifts Assets to the Metaverse
Meta founder and multibillionaire Mark Zuckerberg has apparently decided to go all in on metaverse technology. Last year, the firm changed its name from Facebook in order to underline this new emphasis, and has been progressively devoting massive sums and thousands to employees' development. While Zuckerberg underlined last year that only the bare essentials needed to create the metaverse were as yet in play, Meta’s executive suite seems determined to move forward toward full operation.
This week, during the course of an interview on American television, Zuckerberg demurred from ruling out the possibility that Meta could develop, or already be developing, a proprietary operating system which could play into its plans to grab the biggest slice of the metaverse pie. In the nearly two decades since its founding, this firm has never developed such a system, and this turn in strategy could signify the importance for Meta’s future which Zuckerberg ascribes to the metaverse.
According to Zuckerberg, this operating system could in fact be necessary in order to achieve his vision for the metaverse’s promise. During his interview on ‘Fast Money’, he emphasised that by the end of the 2020s, he expects nearly one in seven people to be active on this new form of the internet.
However, at the moment, the metaverse is not bringing much into Meta’s coffers; the firm’s division devoted to this project has already lost a whopping $3 billion over the first quarter of this year, in addition to the $10 billion loss last year. Furthermore, Meta employees have expressed frustration over the lack of clear direction with which the plans are being put into action.
This year, Meta has already moved to halt new additions to its workforce, perhaps in response to the general retreat observed among tech stocks in the general atmosphere of risk aversion seen on global trading floors over the past few months. So far this year, Meta stock has lost more than half its value. As investors have been gripped by concerns surrounding inflation and the Federal Reserve’s hawkish turn on monetary policy, NVIDIA and Microsoft have lost 45% and 24% of their value, respectively, since New Year’s as well.
All in all, while the Metaverse Standards Forum could well achieve its founding companies’ goal of harnessing interfirm cooperation to advance this developing technology, much is still unknown. Whether the metaverse will fulfill the hopes of investors and executives or prove a white elephant remains to be seen.