As a reminder, the term “metaverse” is a contraction of the words “meta” (which refers to a general view) and “verses” for “universe.” The word refers to digital spaces that are much more advanced than virtual reality (VR) or augmented reality. It’s about expanding our reality into shared virtual spaces, which are modeled in a 3D environment. The basic idea of the metaverse is not complicated. Simply put, the metaverse encompasses any digital experience on the Internet that is persistent, immersive, three-dimensional, and virtual. As the rebrand of Facebook in Meta automatically comes to mind when we talk about this new universe, Chinese companies and local governments of the country are working on a counterattack against the American offensive.
Chinese local governments are entering the metaverse
The municipal authorities of the cities of Wuhan and Hefei have both worked to strengthen the dynamics of the metaverse in the coming years. For Wuhan, the desire is to integrate the metaverse, big data, cloud computing and blockchain into the “real economy”, while Hefei, for its part, stated that it would favor businesses in “advanced areas”, including the metaverse. As we’ll see below, a number of tech companies in China are looking to venture into this universe as state media fires up to calm speculation, closely or remotely tied to the metaverse.
“Everyone has to stay rational to understand the current metaverse mania,” popular, the spokesman for the communist party. Other newspapers including: the economic newspaper, managed by the state, warned against speculative transactions in the sector. The incentive is not to hastily invest in the ‘immature’ concept like the metaverse.
Despite these caveats, other cities are also developing metaverse initiatives. Probably to attract new companies in the field. Zhangjiajie in Hunan Province has launched a metaverse-based research center to help the city develop its tourism industry. Shanghai said it will strengthen R&D of technologies underpinning the metaverse over the next five years, especially for commercial and industrial applications. Finally, it’s the city of Hangzhou, which is home to the headquarters of e-commerce giant Alibaba, which has reportedly set up a “metaverse committee” made up of business and academic representatives.
As Chinese cities embark on this new virtual world, as you can imagine, companies are not going to be left behind either.
Overview of Chinese companies with Metaverse sauce
Tencent, the Asian bogeyman
Let’s start with the gaming and entertainment industry giant ten cent. Clearly, the Chinese company cannot afford to give its US competitors an edge over a potentially revolutionary technology. It should be noted that the company still has a foothold in the Americas by owning 40% of the video game development studio: epic games and it has also signed a strategic partnership with Roblox, a platform that allows users to create virtual worlds. Tencent CEO Ma Huateng told numerous analysts at a conference that:
†The meta-universe is an exciting thing, but it’s also a conceptual thing. We are at a relatively high stage to look at the metaverse, which is about making the virtual world more real and richer in the real world. Tencent has several technical modules, including the basics of interaction and social media, AI and the ability to create a community game platform, can create a metaverse as building blocks†
Tencent also owns the super-social networking application WeChat that lets you chat, shop, order food, or even book a taxi. An essential application for the billion Chinese. If Tencent prepares for a sensational foray into the behind-the-scenes metaverse, thanks to its sprawling commercial empire, it could be one of the players promoting the mass adoption of this new universe. In this sense, Tencent filed for registration last September for one hundred trademarks related to the metaverse, including “QQ metaverse”, “QQ Music metaverse” or “Kings metaverse”.
Baidu, the Chinese Google
The Chinese group last month presented a parallel universe titled Xi Rang (“Land of Hope” in French). As the ambition of the various metaverses, the platform proposed by the boss of the group, Robin Li, will allow its users to interact with other individuals evolving in this Land of Hope. Playing, having fun, learning, shopping, displaying advertisements, attending conventions are all activities that the company believes will be possible in the metaverse.
There is still a lot of work to be done to provide users with a high-quality metaverse experience. Fluid, intuitive and ergonomic navigation will have to be introduced to explode mass adoption. But we will have to take our issues patiently before we see an operational platform as Baidu estimates that it will take at least six years before an optimal solution can be found. The virtual world is available in various media: AR/VR headset, computer, smartphone, which will help to reach a large user base. At this point, the company has not yet communicated about the economic model that will be applied for the metaverse. Case will follow in the coming months.
ByteDance pays for Pico
In the late summer of 2021, the Chinese company acquired VR software and hardware maker Pico. It was founded in 2015 by Zhou Hongwei, who was previously vice president of Goertek (Meta’s exclusive Oculus foundry). In other words, Mr. Hongwei has the bottle, or should I say, the helmet. Pico holds more than 300 patents covering core virtual reality technologies, such as imaging, optics, acoustics, hardware design and spatial positioning.
Pico’s Goblin 2 Model
ByteDance, which owns the popular app TikTok, plans to absorb these technologies in hopes of one day being able to offer augmented reality-based resources to its user base. But that is not everything. ByteDance has invested 100 million yuan in Qiankun, a Metaverse mobile game developer. A kind of Roblox with Chinese sauce. ByteDance seems to fit into the Metaverse samba.
The Alibaba Triplet
The Chinese e-commerce giant recently registered a new company called Yuanjing Shengsheng in Beijing to explore the possibilities of “gaming metaverse”. In addition, the company registered the Chinese version of the trademarks “Ali Metaverse”, “Taobao Metaverse” and “DingDing Metaverse”. With these different initiatives, Jack Ma probably has different ideas in mind for competing with American Big Tech and their metaverse projects.
NetEase: An Island Dedicated to the Metaverse
The Chinese company is one of the leaders in the development and publishing of video games. unavoidable, NetEase should be part of the metaverse trend, and to do this it doesn’t skimp on resources. It signed a strategic cooperation agreement with Sanya Municipality last month. This agreement provides for the establishment of the company’s headquarters in Hainan and the construction of a base industrial project based on the metaverse in the capital of the southern island province of Sanya.
As part of the deal, NetEase noted that it has “full reserves in metaverse-related technology, talent and regulation.” For example, NetEase has advanced technical capabilities in areas such as Virtual Reality/Augmented Reality, Artificial Intelligence, Robotics, Cloud Gaming and Blockchain. The tech giant has also implemented metaverse concept products such as the immersive “Yaotai” system, an AI virtual host, and “planet blockchain,” a blockchain-based value-sharing platform.† If a Chinese verse emerges, the company will most likely be one of the leading players in the field.
A contradictory China verse
While the Chinese state has been quick to pour some cold water on metaverse initiatives by warning of “undesirability” and “hot speculation” about this new universe, companies across the country are plunging headlong into this virtual world:
Number of registered trademarks in China linked to the metaverse
The only catch for these companies is that the Chinese government may not share Zuckerberg’s enthusiasm for the prospect of an immersive, real-time universe of virtual worlds.
In recent months, Xi Jinping’s government has taken a series of measures to try to reduce the role of social media and the Internet in the lives of Chinese citizens. The national video game regulator recently tightened its already strict rules, allowing anyone under the age of 18 to play online games for only one hour per night between Friday and Sunday. We see a kind of contradiction between private initiatives and the will of the government. On the one hand, companies that develop 100% digital solutions in an immersive virtual world, and on the other hand, a government that wants to limit the exposure of individuals to digital content.
At the same time, China is one of the most advanced countries in the development of central bank digital currencies (MNBC). For example, as of June 30, 2021, nearly 70 million purses was opened, executing more than 70 million transactions worth 35 billion yuan (about $5.3 billion). Four months later, the number of digital wallets has doubled and the value of transactions is approaching $10 billion. So it is now possible for the Chinese to convert their paper yuan into e-yuan. A much more important development than in the United States, which still raises the question of the real necessity and usefulness of setting up an MNBC.
Ultimately, Chinese companies have nothing to be ashamed of about American metaverse initiatives. Tencent, Baidu, NetEase, ByteDance, Alibaba, among others, have all the skills, technologies and, clearly, the ambition to develop metaverse solutions. The big question mark comes from the Chinese state, which seems to be using tweezers and even beating the wheels of these companies to plunge heart and soul into this digital world. Even if, as we’ve seen, local governments also seem to be on the same wavelength as private companies, we’re not immune to a blow from the state in the metaverse anthill: Chinese. This would give American companies free rein. The misfortune of some is the happiness of others…
Count on me to regularly pay attention to Chinese and American companies and our European nuggets regarding the progress on the metaverse. Who knows, I may offer you interactive articles in the Zonebourse metaverse in the near future. A kind of immersive collaboration.