In-Depth

Who Will Own the Metaverse? (And Why Channel Partners Should Care About the Answer)

Whatever the metaverse turns out to be, Microsoft's current rhetoric indicates that it plans to share it with its partners.

• By John K. Waters
• December 07, 2021

Can a theoretically infinite virtual reality space ever get crowded? Theoretically, no, but there is a bit of a crush right now at the onramp to the metaverse -- and Microsoft is carpooling with Facebook's new parent company, Meta Platforms, in the fast lane.

The two companies, both of which made big announcements recently about their individual plans to develop metaverse-enabling technologies, just announced that they are partnering to integrate Microsoft Teams with Workplace by Meta (formerly Facebook Workplace), which will allow Teams users to livestream video into Workplace groups, and to view, comment and react to meetings in real time without having to switch between apps.

Microsoft and Facebook have been collaborating on a number of metaverse-y integrations. The Meta Workplace app, for example, is currently integrated with SharePoint, OneDrive, the Office 365 suite and the Azure Active Directory identity platform. But the Teams-Workplace news is worth noting because it's further evidence that Redmond is taking this thing seriously, and Microsoft channel partners should make sure they're up to speed on who's doing what in this currently overhyped space.

The idea of a persistent, immersive virtual environment that users can enter, and in which they can interact with other users, as well as elements of the environment itself -- a metaverse -- sprang from the imaginations of prescient speculative fiction writers like Neal Stephenson and William Gibson. (If you haven't, you should read the novels Snow Crash and Neuromancer.) The real-world manifestations of this concept have taken multiple forms. Facebook co-founder and CEO Mark Zuckerberg gave the world a headline-grabbing peek at his vision of a metaverse in October with the announcement of his company's assimilation of a couple of syllables from that extant locution, and a very public commitment to the concept. But 3-D virtual worlds like Fortnite, Roblox and Minecraft, not to mention decentralized Web3 services, including cryptocurrency and non-fungible tokens (NFTs), have been defining bits and pieces of a kind of metaverse for years.

And Microsoft clearly intends to establish an influential presence in this emerging territory. The company has been committing serious resources to the development of metaverse-enabling technologies. It's been building hologram tech and mixed and extended reality (XR) applications for its Mesh platform, which combines the real world with augmented reality (AR) and virtual reality (VR). The U.S. Army has been working with Microsoft to adapt a HoloLens headset for combat training. And Microsoft CEO Satya Nadella recently told Bloomberg TV that his company is "absolutely focused" on gaming for the metaverse with its Xbox platform.

At the recent Ignite conference, Nadella unveiled Microsoft's plans for bringing XR tech and holograms to  Teams in 2022. He also announced a key product rebranding that represents a big step into the metaverse: the Dynamics 365 Connected Store was renamed "Dynamics 365 Connected Spaces" to better reflect its capabilities as a platform for "explorable 3-D" virtual spaces for retail and the workplace.

During his Ignite presentation, Nadella declared that Microsoft is "creating an entirely new platform layer, which is the metaverse."

"When we talk about the metaverse," he added, "we're describing both a new platform and a new application type similar to how we talked about the Web and Web sites in the early '90s. Across the Microsoft cloud, from Azure IoT to Azure Digital Twins to Connected Spaces and Microsoft Mesh, we're building a metaverse platform for you to build upon."

Make no mistake: Microsoft is staking its claim in the metaverse, but something Nadella said during that presentation struck a very different note from the Facebook announcement. "For years, we've talked about creating this digital representation of the world," he said, "but now we actually have the opportunity to go into that world and participate in it."

Facebook has been talking about the metaverse since at least the summer, when Zuckerberg reportedly told his employees about his plans to expand his company's network of connected social apps to, according to one report, "bring the metaverse to life." But it appears to be a metaverse that Facebook will own, and metaverse pioneers are not happy about that model.

"They [Facebook] are essentially trying to build what many of us have been building for years, but rebrand it as their own," Ryan Kappel, an American who has been hosting metaverse meetups for the past two years, told Reuters.

Speaking during a panel discussion at the recent Reuters Next conference, Yat Siu, chairman and co-founder of Animoca Brands, an Asia-Pacific company that invests in and builds metaverse platforms, said Facebook is building a "fake metaverse," and that it fails to understand this new territory because, among other things, it doesn't permit "digital ownership." Until the company provides "a real description as to how we can truly own it, it's just Disneyland," Siu said. "It's a beautiful place to be, but we probably don't want to really live there. It's not the kind of place that we can actually build a business."

Animoca's mission, according to its Web site, is "to deliver digital property rights to the world's gamers and Internet users, thereby creating a new asset class, play-to-earn economies, and a more equitable digital framework contributing to the building of the open metaverse." Plots in some corners of the metaverse are actually for sale right now. Decentraland, a 3-D VR platform built on Ethereum blockchain, where users can play games, buy land and trade avatar wearables, is selling space in what it calls "the first-ever world owned by its users," with price tags in the millions.

But whether this new asset class is real or very expensive smoke, there's definitely a lot of activity in the nascent metaverse, especially among gamers. Roblox, Take-Two Interactive Software, Electronic Arts and Blizzard Entertainment all have established environments with social components and marketplaces.

And straight-as-an-arrow business productivity providers seem to be just as serious. "We're building towards a metaverse," said Dropbox founder and CEO Drew Houston during a recent on Yahoo Finance Live. "I'm really excited about the vision. ... Where Dropbox fits in if you are working in that kind of environment or in the metaverse, you need stuff. So, for your digital content, Dropbox could help, and that is what we're building towards. It is very early. It is a long journey, but it is exciting."

In a recent conversation with Harvard Business Review editor-in-chief Adi Ignatius, Nadella talked about Microsoft's thinking about the metaverse. "I think that this entire idea of a metaverse is fundamentally this," he said. "Increasingly, as we embed computing in the real world, you can even embed the real world in computing. ... For example, you can have a space in which there are lots of cameras and microphones. And you can digitize the space. You don't need to wear anything on your head.

"So that concept of being able to be in a virtual space again as an avatar ultimately as a hologram, interact with others, have spatial relationships with others because of those things like spatial audio, I think are just other additional forms of what we've all gotten used to today with video-based meetings. So, video transcending to 2-D avatars and 3-D immersive meetings is probably a practical way for us to think about how the metaverse really emerges."

Who will own the metaverse? It sounds like Microsoft, at least with its current rhetoric, intends to share whatever this thing turns out to be with its partners. And you don't need VR goggles to see that.