The Ten Steps to Metaverse Interoperability. Step Six: Business Model Alignment
(An extract from the upcoming KZero Worldswide report, The Ten Steps to Metaverse Interoperability).
Step One: Standardisation of Data Formats
Step Two: Blockchain Interoperability
Step Three: Decentralised Identity Solutions
Step Four: Regulatory Compliance
Step Five: Scalability & Performance
Introduction
Achieving full interoperability in the Metaverse requires aligning the business models of various virtual world operators. This alignment is crucial for incentivising interoperability initiatives, addressing potential revenue loss concerns and maintaining control over user experiences.
The challenge lies in finding a balance that benefits all parties involved, fostering collaboration while ensuring sustainable business practices. This section delves into the key technical and commercial hurdles to be overcome and explores the new business models that could emerge to facilitate this alignment.
Revenue Sharing Mechanisms
One of the primary concerns for virtual world operators is the potential revenue loss that might occur when users move between interoperable platforms. Traditional business models are built around capturing and retaining user attention within a single platform, which directly translates to revenue through transactions, subscriptions and advertising.
The introduction of interoperability disrupts this model, as users might spend less time and money on any one platform if they can freely move between multiple virtual worlds.
Additionally, tracking and distributing revenue generated from users who traverse different platforms poses a significant technical challenge.
Developing a fair and transparent rev-share mechanism that compensates all participating platforms is complex, requiring robust tracking and auditing capabilities.
Revenue-sharing agreements can be implemented where participating VWs agree on a formula to distribute profits generated from interoperable users.
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Blockchain technology can facilitate transparent and immutable tracking of transactions across platforms. This approach can encourage both larger and smaller virtual worlds to participate, knowing they will receive fair compensation for their relative contributions to the broader Metaverse ecosystem.
User Experience Consistency
Maintaining a consistent, high-quality user experience across interoperable virtual worlds is another significant challenge. Each platform has its own user interface, interaction mechanics and aesthetic styles. Users transitioning between platforms might encounter differences that can detract from the immersive experience.
Moreover, ensuring that assets like avatars, items and achievements are displayed and function consistently across different virtual worlds is technically demanding. Discrepancies in asset rendering, functionality, or even compatibility can break immersion and frustrate users.
Adopting universal standards for user interface design and interaction mechanics can mitigate these issues. Collaborative efforts, similar to the Web3 Foundation's work on blockchain standards, can establish guidelines for UI/UX design in the Metaverse.
Companies can also develop middleware solutions that harmonise user experiences by translating interactions and visual elements into a consistent format across platforms. This not only enhances user satisfaction but also opens up new business opportunities for firms specialising in UX standardisation.
Intellectual Property and Asset Rights
Interoperability raises complex questions about IP and asset rights. When users bring their assets from one platform to another, ensuring that the original creators and rights holders are properly credited and compensated is crucial. Also, there's a risk of IP infringement if assets are used in ways not intended by the creators.
Managing these rights across multiple platforms with different rules/regulations is a significant challenge, compounded by the decentralised nature of blockchain-based assets.
Smart contracts can be employed to manage IP rights and ensure that creators are automatically compensated when their assets are used /traded across platforms. Extending this approach to include automated royalty payments and usage rights can protect creators and incentivise them to participate in interoperable ecosystems.
This creates a business model where IP rights management and royalty distribution become integral to the platform's operation, encouraging more creators to contribute high-quality assets.
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