MPEG is traditionally committed to the coding and compression of audio-visual data from natural sources. However, the emerging MPEG-4 standard aims not only at encoding the multiple natural audio-visual objects composing the scene, but also synthetic audio and video to be integrated with the natural objects. It also allows more interaction with both synthetic and natural objects. Networked collaborative virtual environments (NCVEs) have a wide range of different networking requirements. This paper analyzes how these requirements could potentially be met by MPEG-4 and shows that MPEG-4 tools could be extremely useful for the development of such environments.