The amount of hyperbole and disillusion about the metaverse is astounding. Listen to technology leaders long enough, one would be forgiven to believe that the metaverse, this magic 3D virtual world envisioned by billionaires and the one-percenters, will solve everything from world hunger, climate change, to all of humanity’s follies.

In their rosy fantasies, there will be “one” unified metaverse, which is open, decentralized, not controlled by anyone, where each user would have a fresh start, free to create, build, enjoy life in ways they couldn’t in physical reality, own his/her own data and live in digital bliss in perpetuity.

In my book, Parallel Metaverses, I describe a more realistic version of the future. The metaverse will likely mirror the messy and chaotic nature of our physical world. There won’t be one metaverse, but many metaverses existing in parallel. It will ride on the existing rails of the internet and share similar features like market dominance, monopolistic practices, walled gardens, and user data manipulation.

There are, however, strong incentives for some players to push toward an open metaverse. Microsoft, for example, makes its Mesh platform (the company’s metaverse application) work with a range of external hardware across different systems. HTC, the maker of the VIVE virtual reality headsets, is promoting the open metaverse with various initiatives to enable hardware and software interoperability.

On the other hand, the entrenched players will try to keep a closed metaverse so that their dominance can be prolonged. Meta, the parent company of Facebook, ties its Horizon suite of metaverse content exclusively to its in-house Quest VR headset. Apple, when it releases its rumored XR device in the future, will likely make it sync seamlessly with the iPhone maker’s other devices to further lock users within the Apple product. It’s also not hard to imagine that ByteDance, the owner of TikTok, will try to tie its content offerings with its own VR headset PICO.

How open the metaverse will be is going to depend upon the dynamics of the two forces’ entanglement and how tech regulation will force changes on big tech firms. Moreover, as there will be many distinctive metaverses—the most basic distinction would be according to national borders and their corresponding local laws and regulations (similar to how the Apple app store has different versions for each country)—there will be some metaverses with more open ecosystems and others more closed.

As countries like China, Russia and others continue to adopt new laws and policies that fracture the internet into the splinternet, the hope for one open, decentralized and free metaverse is diminishing. But there is still room for hope and reason to act upon the idea. I recently caught up with Alvin Graylin, the China President of HTC, to hear what the Taiwan-based tech company is doing to help build an open metaverse.

Below is a lightly edited account of our discussion.

Nina Xiang: How would you define the metaverse?

Alvin Graylin The metaverse is not something brand new, and it’s really the evolution of the internet. We are going from a 2D media and text-focused internet to a 3D spatial internet. So the metaverse is adding 3D content and 3D virtual worlds with more natural, inclusive and immersive interfaces.

Some people think that the metaverse should be decentralized with blockchain/cryptocurrencies as a key part. I think there will be places where blockchain, cryptocurrencies, NFTs and other types of decentralized technology play a role, but it’s not a necessity.

Alvin Graylin says HTC believeS in an open metaverse and that nobody should own or control it.

Courtesy of HTC

What type of role do you think decentralization and blockchain-based metaverse will play?

Blockchain is often linked to cryptocurrencies today, which have been used primarily as speculative instruments now. Cryptocurrencies do not provide real-world utility for the most part and are not even used as a currency for transactions except in limited scenarios such as NFT purchases or black market goods/services.

I think the CBDC (Central Bank Digital Currency or stable-coins tied to fiat currencies) being evaluated by government central banks, like China’s e-CNY, will probably play a bigger role in the global economy compared to pure decentralized cryptocurrencies.

Governments will realize soon—as the Chinese government has realized—the potential dangers of losing control over one’s sovereign currencies by not regulating cryptocurrencies. Then governments will want to reclaim control over it.

It’s possible that blockchain will be used as validation for a general cross-virtual world authentication system. Perhaps all of our avatars, ID, and ownership systems will be tied to some blockchain in the future.

Are you saying that platforms like Decentraland and The Sandbox won’t enjoy much growth in the future?

I’m not a big fan of the virtual land sales model, which is based on artificial scarcity. There’s no authenticity of why some particular land is more valuable than other land. Plus, future virtual worlds can create virtual land with no limit. Second Life tried to do land sales in the 2000s and it didn’t really end well.

What is HTC’s metaverse strategy?

We believe in the open metaverse and that nobody should own or control it. We believe that it should be accessible to as many people as possible. We want to create the underlying plumbing, tools, development kits, and access devices to allow more people to create content and to have an excellent immersive experience in this new realm where we’ll be spending much of our days.

VR and AR are going to be the primary interface for the metaverse, but they will merge into a single device. It’s just a matter of time. In the interim period, there will be time when some people will access the metaverse on a 2D flat screen. As XR devices become more affordable and accessible, most people will primarily be using XR devices.

It’s a natural for HTC to play a role in XR hardware, but how are you going to enable a more open metaverse ecosystem?

We work with all of the game engine providers to create an open platform so that everyone can develop content. Our Viveport store or Vive Wave program (an open platform and toolset enabling easy Mobile VR content development) share our SDK, VR runtime systems, core underlying technology, content library with other hardware vendors.

Our Viverse platform (cross-platform metaverse network) offers tools, development kits, avatars systems, wallet systems, virtual browsers and other basic tools needed by both hardware and software providers. With Vive Connect, we’ve created a simple interface to allow people with a basic internet connection to access the virtual worlds.

We are also a key contributor to the OpenXR consortium, which is a nonprofit group helping to create uniform standards across the industry to ensure compatibility. We played a critical role to help define a similar standard called GSXR (Global Standard for XR), which was initiated by the Chinese government.

Companies seem to be supportive of open ecosystems if it benefits themselves and vice versa. Meta’s Oculus/Horizon ecosystem seems to want to entrench its dominant position as much as they can. Do you see other companies supporting an open metaverse?

Some players say they’re open platforms, but they continually force exclusivity on content to their store, or they create lock-in to their hardware or account systems. Meta’s VR business unit does have a strong position today in the VR industry in the western markets, but it’s still very early days in the adoption cycle for XR technology.

I think an open and accessible interoperable metaverse will absolutely win in the long term. Companies that choose to be in a closed environment or create a walled garden may see short-term success, but they will likely be disappointed in the long run.

In five years’ time, how dominant will the top three XR device makers be?

Like in most technology-related industries, the top three players will probably compose 70% to 80% of the total market. I really don’t know who will be the final winners. But I will say that the market position that Meta enjoys today will not be anywhere as strong in five years. There is no way for a company to maintain that market share, particularly with a closed system when the world is going toward more open platforms.

So the top three XR devices players are likely going to dominate the access device to the metaverse. That means domination/monopoly will persist in the metaverse era and it won’t be that open after all?

First, within the next three years, XR devices will not be the dominant way people access the metaverse. That will happen over the next 5 to 10 years.

Secondly, the interface device becomes a personal brand preference, particularly in an open metaverse. Who dominates the XR device market doesn’t affect how the metaverse will be shaped. The quality of the content will determine which virtual worlds users continually come back to experience.

Think about Apple, which many say is a closed system. Their App store is a closed app store, but their platform is relatively open in the sense that you can access the full internet and all the apps, while interoperability is allowed. You can make calls from an Android phone to an Apple phone. You can download the same apps. A WhatsApp/WeChat user on iPhones can talk to WhatsApp/WeChat users on Android phones. Apple does not force third party exclusive content to Apple’s app store. Apple’s approach is giving their users a better user experience with more vertical integration from hardware to software.

That doesn’t necessarily make it a closed system. HTC takes the same approach with our hardware and software integration. Our app store is the most open in the industry and supports direct download from other hardware vendors.

But Meta’s closed metaverse ecosystem has a closed app store and users must use an Oculus ID and avatar to log in. Users can’t use other devices or content. Meta’s App Store also forces a number of developers into exclusive agreements so that only users on Meta devices can access that content.

An attendee wears a Oculus VR Inc. virtual reality (VR) headset during a demonstration of the Metaverse on the Accenture Plc stand on day two of the MWC Barcelona at the Fira de Barcelona venue in Barcelona, Spain, on March 1, 2022.

Angel Garcia/Bloomberg

There are still many technical limitations for the metaverse’s arrival. One of them is limited number of simultaneous users allowed in one shared virtual space. How soon can this be improved?

This is currently an issue for both 2D gaming and XR use. It’s due to a limitation of processing power on mobile or standalone XR devices because those devices are dependent on low-powered mobile chips with limited processing capabilities. Rendering and tracking large numbers of avatars requires fairly intensive processing power.

This should change significantly once we start moving into cloud-based XR model, where most of the heavy processing can be offloaded to server farms in the cloud. It could still take a little time.

The other thing we will start to see much sooner is that some open virtual worlds will create spheres of visibility/realism, where you only see the user’s or NPC’s (non-player character) avatar within a certain distance clearly, while users far away don’t get rendered or is represented with more simplistic forms. This way, we can have much larger open virtual worlds that don’t’ require sharding, a practice today’s virtual worlds are forced to separate players into shards, or sections that limit how many players can fit in server-defined areas of the virtual world.

But even today, in Vive’s more realistic multi-user environments (i.e. Vive Sessions/Engage), we’re able to get to close to 100 users in a virtual space and up to several thousand in our more cartoonish apps (i.e., Vive Campus/Virbela). Getting into the tens of thousands or hundreds of thousands of simultaneous users in one giant open virtual world will probably take several years to realize.

The Chinese XR devices market is very crowded, with HTC, Pico, Dapeng, Xiaomi, Huawei, iQiyi, among a long list of competitors. How do you see the Chinese XR device market evolving?

In every new technology, there’s going to be a lot of players in the early stages. Then they invariably consolidate into a few major players over time.

Unfortunately, there isn’t a great deal of real innovation originating from some of these local Chinese companies these days. Some just don’t have the scale, the internal research and development or design capabilities needed to innovate. Some are essentially relying on the ODM (original design manufacturer) and putting a label on something that’s already out there.

The metaverse will be built during a time of U.S.-China technology decoupling. How much overlap or interconnectedness will there be between these two countries’ metaverses?

In the near term, I agree that the two countries’ metaverses won’t have much overlap or interconnectedness. But over time, market forces will create more openness.

I think initially there will be many virtual open worlds globally. The Chinese government will push the local industry to a separate metaverse because China’s metaverse is going to be based on real ID.

China will likely use CBDC (e-CNY) and DDC (Distributed Digital Certificates), while cryptocurrencies and NFTs will be used in the west. That’s going to keep China’s ecosystem fairly closed in the near term. But longer term, there may be a translation layer that vendors will create to allow interoperability among different virtual worlds globally.