Yes, but the Fediverse is only one part of the equation, and has its own pitfalls.

Free and open source software could overtake the proprietary software market in theory, but in practice it often fails since many FOSS projects are made for developers by other developers, most of who tend to be power users. And the average user needs ease of use, and easily accessible common functions, not a lightweight command-line interface with scripting.

Even then, things like games and other stuff might only will be partially FOSS, like engines and frameworks, the rest being behind a paywall. However, I think people should experiment with what I call "open source universes", which is basically creating shared universes that are open source. Maybe even make some open source RPG system with it too, so we could have an open source alternative to the likes of D&D, WH40k, etc. At one point I tried to make something like this, but the issue was that it was based on an old webcomic idea of mine, which I started working on when I had totally different views on many things. Might revisit it with different ideas later on.

Open source hardware will be a really hard uphill battle, with a large issue coming from closed-source drivers (Thanks ARM and nVidia!), cost and difficulty of manufacturing silicon, etc.