Building synthetic worlds: lessons from the excessive infatuation and oversold disillusionment with the metaverse

Externalities and Complementarities in Platforms and Ecosystems: From Structural Solutions to Endogenous Failures

“…Recent research has shown, for instance, how network effects may grow stronger or weaker as network size increases, depending on the composition of the user base (Panico and Cennamo, 2022), and how the ecosystem's greater openness to the contributions of more heterogenous complementors with different incentives may create problems of "free-riding" on shared assets, alter complementarities, and lead to failures (e.g., Cennamo and Santaló, 2019;Zhang et al, 2022). More research is needed to understand which architecture designs are more exposed to ecosystem failures, how they unfold, and under what conditions-like the story we witnessed in real time through the evolution of the metaverse ecosystem (Jacobides et al, 2024).…”

“…The relatively scarce empirical work on ecosystem governance (such as Jansen, 2020, on software ecosystems) lists the attributes that define the nature of the interorganizational arrangements, over and above platform governance rules, 23 and research is only just beginning to look at decentralized ecosystems (Hsieh and Vergne, 2023;Jacobides et al, 2024). Table 3 summarizes the different governance mechanisms in place in platforms and ecosystems.…”

“…Such forking could affect not only the benefits within the ecosystem, but also the viability of the ecosystem as a whole. While there is significantly less work on ecosystems without a central orchestrator, some work has shed light on decentralized ecosystems that rely on webs with low centrality such as a "cave" rather than a "hub-andspoke" model of operation-exemplified by Web3 (see Hsieh and Vergne, 2023;Jacobides et al, 2024). Here, one possible source of endogenous failure is that technological change requires coordinated responses, yet decentralized structures often lack the decision-making simplicity that allows for such adaptation; decentralized ecosystems are thus more prone to creating bureaucratic structures to manage the inescapable interdependencies (O' Mahony and Ferraro, 2007), which can make them inefficient or even technologically unviable.…”

“…This might be because while decentralized ecosystems and more equitable governance are valuable, they cannot always tackle the inherent functional issues that such complicated ecosystems raise. 32 It remains to be seen whether the development of decentralized technologies such as Web3 in the metaverse will prove this issue to be short-lived (Jacobides et al, 2024).…”

Business Strategies in Virtual Reality: A Review of Market Opportunities and Consumer Experience

“…Virtual Reality (VR) has transcended its roots in gaming and entertainment, emerging as a disruptive force with transformative applications across a myriad of industries (Jacobides et al, 2023). This essay delves into the diverse market opportunities in Virtual Reality, analyzing its applications, key trends in adoption, sectors poised for substantial growth, and strategic considerations for market entry.…”