Source : https://www.matthewball.vc/all/interchangemetaverse
For sequential reasons, this section is quite late in the essay. Without an ecosystem capable of using them, standards are irrelevant. This ecosystem requires hardware, compute (to power and render the Metaverse), networking (to share and deliver it), and virtual platforms (so that there are places to be and things you can do).
Interchange standards and tools are the most important part of this essay. They encompass a broad range of technical solutions, protocols and formats as well as services that enable interoperability. There will not be a Metaverse without them — it will only be a more immersive and virtual version of today’s app stores and mobile internet. This pale imitation will also be less profitable, dynamic, and healthier.
The Dial Tone was First
The way the internet was created is one of the main reasons it has been so successful and transformative. From the 1960s through the 1990s, the internet’s foundation was created by a number of informal and formal working groups made up of researchers from government labs, universities, and technologists. These often not-for profit groups were focused on creating open standards to allow them to share information between servers (e.g. This will allow them to share files and messages, making it easier for others to collaborate on future technologies, projects and ideas.
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These quirky origins had many benefits. Many of these benefits still hold true today. Anyone with an internet connection could create a website in minutes using pure HTML. Even faster, a platform such as GeoCities was available (which is still free!) A single version of the site could be accessed from any device, browser or user that has an internet connection. Moreover, neither the developer nor user needed to be disintermediated. If they choose to use an intermediary such as a payment service, a platform, or retailer, there are many options. Common standards made it easier and more affordable to hire, work with vendors, integrate third-party software, apps, and repurpose code. Many of these standards are free and open-source, which meant individual innovations could benefit the entire ecosystem. However, it also placed competitive pressures on proprietary standards that were paid. It also helped to curb rent-seeking tendencies between platforms and users (e.g. Device manufacturers, operating system, browsers, ISPs and ISPs.
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Businesses can still make a profit by using the internet, building proprietary technology, or deploying a paywall. It allowed morecompanies, in larger areas, to reach more customers, and achieved higher profits while also preventing telecoms companies (and pre-internet giants) from controlling it. The internet era is the reason that the majority of the world’s most valuable public companies are either born or reborn from it.
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It is easy to see how the internet could have been different if it was created by multinational media conglomerates to sell products, serve ads, harvest data for profits or control your end to end experience (something AT&T as well as AOL tried but failed to achieve). A.JPG can be expensive, while a download of a.PNG could cost half as much. A portal or app from a broadband operator might be required to use teleconferencing software (e.g. Your Xfinity Browser ™, click this for Xfinitybook ™, or XfinityCalls ™, powered by Zoom(tm). Imagine it taking two years to build a website. Or if it cost a thousand dollars. Websites could only work in Internet Explorer and Chrome, with an annual fee to use the browser. Users might have to pay extra fees to their broadband provider to access certain programming languages and use a particular web technology (‘This site requires Xfinity Premium 3D rendering’). Microsoft was sued partly because it bundled Internet Explorer with Windows OS. Would a corporation have allowed other browsers to access the internet if they had invented it? They would have let the user access and modify any sites they choose, as well as do everything they wanted. It’s unlikely that internet penetration and usage would be lower regardless of differences.
The Metaverse won’t develop in the same way as the internet. The development of the Metaverse was led by military research labs, public institutions, and independent academics. They were the only ones who had the computational talent, resources, ambitions, and resources to create a World Wide Web. Industry did not understand its potential. The Metaverse is a different story.
We want the Metaverse as successful as the internet. We want to see as many platforms, technologies, companies, and companies created to increase the number of Metaverse users and devices. This will also help to curb the rent-seeking instincts that dominate platforms have. To do so, we will need an ecosystem of ‘interchange’ solutions that interconnect, translate, and exchange information/users/assets across and between myriad different and competing platforms. It doesn’t suffice to have the best hardware, network, virtual platforms, and Metaverse technologies.
Closed Standards: The Problem
Let’s look at one of the most important requirements for the Metaverse, rendering on local devices. This will help us understand the importance and value of interchange.
Each of the console gaming operating systems does not support third-party rendering API collections like OpenGL or WebGL. Instead, Microsoft Xbox uses Microsoft’s DirectX and Sony uses its GNMX to play PlayStation. Mobile devices support many standards. However, they can restrict or block access to drivers. This helps developers move to their own offering. Mac and PC are more open but optimized for Microsoft DirectX and Apple Metal APIs. Developers must ensure that their software is compatible with each platform’s standards’. Fortnite must use Microsoft’s DirectX, Sony’s GNMX, Nvidia’s NVM, and Apple’s Metal for iOS. Google’s Android is the only one to have built its solution around OpenGL. However, it could be argued that Chrome and Chromium are the main players in these standards.
These protocols are also available for GPUs. Nvidia’s drivers work in conjunction with Microsoft DirectX to render.
This fragmentation offers many benefits. This competition down and up the “rendering stack” leads to lower pricing, higher innovation, greater investment into content, and many other benefits that benefit developers and end-users. These benefits are not exclusive to the rendering industry. The most efficient market mechanism is almost always competition.
However, platforms are often dominated by competitors. They use everything they can to attract developers and users and make sure they’re thestandard and not astandard.
Nearly every platform will claim that their APIs are best suited for their operating systems and/or hardware. This means developers can create better software with them which results in happier users. The platforms often refuse or impede support for alternative solutions. As these platforms grow in power, they become more restrictive and may block changes that are good for the ecosystem but could also jeopardize their individual positions in it. This strategy can be both dangerous and potent due to the digital network effects, which span end-users and developers, and zero-marginal cost revenues.
Recent history has provided us with a few key examples.
Sony has refused support for cross-play, crosspurchasing, or cross-progression between PlayStation games. This was more than a decade ago. Two friends could not play the same game on two different consoles (like Xbox and PlayStation). Even if two players bought the same game, such as one for their PlayStation and one for their laptop, their in-game currency and many of their rewards would still remain isolated. Critics of this policy claimed that PlayStation’s refusal to open up cross-platform services was due to its dominant market position. Cross-platform services would reduce the platform’s network effect, and make it easier for users who want to switch platforms. In 2016, the president of the division admitted this tacitly, stating that “the technical aspect could prove to be the easiest” in opening access to its PlayStation Network. This was clearly bad news for both developers and players.
Valve, the company that owns Steam, the most popular PC gaming platform, has also made it clear that any game purchased through the Steam Store must be played at all times. This means that they will receive a cut from all future revenues. This prevents players taking their achievements, play data and friends lists to other places, as well as fragmenting in-game conversation. Steam’s lock-in and head start make it almost impossible to rival the platform, despite high fees. EA announced in 2019 that it would be releasing PC titles via Steam after eight years of only selling them through its EA Origin store. This would have a significant impact on revenues, as it will lose between 20 and 25% of revenue from store fees and part ownership. It also means that Steam’s dominance has meant that Steam is now unable to capture at least 30% of the PC market. Epic Games launched its own competitor to Steam in 2018, seeding the platform using Fortnite – the most played AAA game in the West – as a product. Epic Games Store charges developers a 3 to 6x lower store fee than Steam. Developers also have full ownership and rights to their achievements. Epic Games Store is estimated to lose hundreds of millions of dollars annually and won’t generate any cumulative profit until late 2020s according to Epic. While Steam generates billions of dollar per year and has a gross margin of 70% or more, it is still generating billions.
Apple may have dominated the mobile internet era without doubt, but it uses its success to limit disruption and maximize the “total returns on our IP”, as CEO Tim Cook stated. This is evident in Apple’s control over iOS app distribution and monetization. Its prohibition on other app stores and mobile platforms within iOS. Its ability to coerce Metaverse platform to change their description to stay in Apple’s favor. Its lying about down ranking competitors on its app platform. Its locking out competitors of key APIs/capabilities. Its unilateral determination of when new innovations will become available. Its changing its policies to harm its competitors and delineating them as it pleases. WebGL is a tool that allows developers to create rich 2D or 3D rendered environments within a web browser. However, it is not available for all rich applications. Critics claim this is due to Apple’s desire for all developers to use the App Store where Apple receives a cut of any purchases. Apple had just released its silicon MacBooks one year prior, which enabled all iOS apps to run on the MacBooks (which requires the Mac App Store). Apple also announced that macOS would no longer support OpenGL, though it maintains the standard.
Apple’s policies are tragic because the iPhone would not have been possible without the open internet of the 1990s, 2000s. The tragedy of Apple’s policies is that wireline and wireless telecoms would prefer the dystopian closed web I described earlier. This allowed them to tax, block, and gate everything on the internet to prevent disruption from companies like Apple while maximising telco profits. The Verge states that Apple is not just a “telco” but a “walled garden”.
To return to rendering, over the past 20 years, both the number and complexity of 3D simulations have increased significantly. Because the major platforms do not support a common rendering format, it is extremely expensive for developers to create software that can run across all platforms and reach all users. This results in a loss of revenue or a reduction in profits. Only the platforms with the most users are likely to benefit. Publishers that have high revenues and can afford to invest will also be the ones that are most popular. Remember that rendering is only one of many problems a developer must solve.
Over the past decade, many interchange solutions were developed to offset the cost and difficulty of multiplatform development and reduce the dominance of dominant platforms.
Unity and Unreal Engine are two of the best cross-platform gaming engines. Epic was originally founded as a game developer in the 1990s. However, Epic refocused its efforts on the engine that powered its smash hit game Unreal Tournament. It licensed other game developers. Version 5 of the Unreal Engine, which is currently in early access, was designed to run on every major gaming platform. Developers had several advantages. They could concentrate their efforts on what they are best at and will be rewarded for: creating great games. These developers didn’t have to worry about or invest in managing operating-system updates, technology changes or new devices. This was especially helpful for small/nascent developers. They could increase their market reach to all players for a mere 5% cut in gross revenues. Fourth, because there were already standard engines in place it made it easier to hire people without having to invest in retraining. Game-makers were able to leave their employers and start their own studios, without having to create their engines. None of the console or PC platforms have been able make their engines into standards (e.g. Valve/Steam’s Source engine.
The independent, cross-platform engine’s impact has been huge. Imagine yourself as a mobile game developer, particularly in the West. iOS is the most popular mobile operating system in America, with 60% of smartphones sold and 80% of teens using it. It also accounts for more than two-thirds of global mobile gaming revenue. You can also reach almost 90% of iOS users by only writing to a dozen iPhone SKUs. The rest of the world’s market is divided between hundreds of different Android phones. If a developer is forced to choose between these platforms, they will always choose iOS. Unity allows them to publish their games across all platforms (including the web) and increase their revenue potential by more than 50% with minimal incremental costs. This extra profit leads to better games, which in turn leads to greater monetization and higher profits. Apple would prefer exclusive games and optimized games for their hardware. However, Unity is arguably better for all users, iOS users included, as well as the App Store.
Key interchange solutions include live gaming service providers like Amazon’s GameLift and Microsoft’s PlayFab. These services provide publishers with unified backend infrastructure capabilities such as player account management, single sign-on, leaderboards and matchmaking. These solutions, which are necessary for all online games, are difficult to develop, test, scale, especially for those that support cross-platform play and purchasing, are often time-consuming. The core technologies needed for these services are virtually identical from title to tiles. This is why most developers outsource these technologies. Microsoft and Amazon also use GameLift and PlayFab to attract developers to Azure or AWS. These services are not normally considered commodity-priced.
The strength of cross-platform engines, live-ops infrastructure and other features helped to break many of these closed platform policies and limitations. For example, the decision by PlayStation to allow cross-play, crosspurchasing, and cross-progression was not based on internal preferences. It was instead a response to Fortnite‘s success, which launched one year earlier than the company Epic Games, which is a company that focuses on cross-platform gaming.
Fortnite had a few rare attributes. It was the first AAA mainstream game that could be played on almost any gaming device worldwide, including the two generation of Xboxes and PlayStations, as well as the Nintendo Switch, Mac and PC, iPhone and Android, and the Nintendo Switch. It was also available for free so players didn’t need to purchase multiple copies in order to enjoy the game on different platforms. Fortnite was designed to be a social game. It gets better the more you play it with your friends. It was built on live services and not a fixed narrative. The game’s content was also updated twice per week. This and great creative execution helped Fortnite to become the most loved AAA game worldwide (except China) at the end of 2018. It was also generating more revenue than any game ever.
This success was supported by the fact that all of Sony’s gaming rivals had embraced cross-platform services Fortnite. This functionality was not blocked by PC or mobile; Windows and no mobile platform had ever purchased exclusive games. It was rare that the same game would play well on two different devices due to the differences in input and hardware requirements. Nintendo supported many cross-platform services for Fortnite right from the beginning. But, unlike Sony, didn’t have an online networking business and didn’t prioritize it. Microsoft had been long advocating for cross-play. It was probably due to Microsoft’s share of the console market being 2-3x smaller that Sony’s (and often behind Nintendo’s), and its PC service being less than a tenth the size of Steam. Microsoft was therefore able to benefit from weakening network effects.
Cross-platform integration was a problem for PlayStation. Not only did it have the worst Fortnite and versions, but PlayStation owners also had better versions available at all times. They didn’t even need to pay a dime to access them. This changed the entire impact of Sony’s policy against cross-play. While it might have had a small impact on Activision’s sales of Call of Duty titles, which were still limited to $60 copies at the time, only a few of these titles would have gone directly to PlayStation. However, most Call of Dutyplayers still remained on PlayStation. However, Fortnite was a significant loss for Sony, which drove players to other platforms and a fraction of overall players. Although the PlayStation was more technically advanced than the iPhone, most players still consider the game’s social aspects to be more important that its specs. Finally, Epic accidentally activated cross-play for PlayStation on at least three occasions. This caused even more upset users and encouraged them to petition Sony for change.
Sony was forced to alter its policies collectively. It has been a positive change. Many of today’s top games are accessible from almost all computers worldwide. Users do not need to pay re-pay or lose their achievements or identities. Cross-platform play, progress, and purchasing mean that every console competes on hardware and content, not lock-in. Sony continues to thrive in this area. PlayStation still drives over 45% of Fortnite’s total revenues and just had its greatest-ever console launch.
Epic also attempted to take down Steam’s dominance in PC gaming with its cross-platform power. These efforts were less successful than those against Sony, as mentioned. It’s interesting to note that just three days after Epic launched its Epic Games Store which would charge 7-12% in store fees, compared with Steam’s 30%, Valve announced Steam would reduce its commission to 25% after $10MM gross sales and 20% after $50MM. Developers now receive hundreds of millions more in annual profits via Steam.
Epic has spent hundreds upon millions of dollars and given up hundreds more in Fortniterevenues to break Apple’s grip on iOS.