China takes over the metaverse!
China’s metaverse market could be worth up to $8 trillion, and companies there are already working to develop the virtual world. So do the giants, mainly from the US, have to fear that the Middle Kingdom will overtake them in this competition? Not necessarily, as Chinese censorship may keep the metaverse there from going beyond the “Chinese wall”. Although, as the example of the TikTok application shows, the Chinese will not hesitate to enter the global metaverse market when it brings not only financial, but also political benefits.
Facebook in the form of Meta, Microsoft and several other tech giants see their future in the virtual world. The metaverse (a compound of the words meta meaning “beyond” and “universe” meaning “world”) is a kind of 3D world that can be co-created and explored. It is distinguished by blockchain technology, which allows participants to freely and securely trade digital objects like. virtual land, home furnishings or clothing.
Chinese companies don’t want to stay outside the metaverse either. They are already investing in a market that could be worth as much as $8 trillion in the Middle Kingdom, according to analyst firm Morgan Stanley.
– China’s metaverse may look very different from the rest of the world due to government censorship and strict regulations on the tech sector. It is expected that in this case the basic means of payment will be e-yuan or other virtual currency directly linked to the local government. Other cryptocurrencies, due to their distributed nature, have no chance to conquer the market of the Middle Kingdom. For example, Bitcoin, popular everywhere in the world, is banned there. Projects based on open blockchain are not liked in China, if only because they cannot be controlled from the top down. The Chinese will certainly want to create their own equivalents, but they will not have the most important element characteristic of decentralized solutions – the freedom of expression and opinion, based on democratic principles, without a single central point of supervision – explains Bartosz Bilicki, from SmartVerum startup.com, which tokenizes art and creates an “artistic” metaverse.
Censored, but collaborative means immense possibilities
It is not a well-known fact that technology companies in China are tightly controlled by the ruling party and have to cooperate with the government in order to grow. Censorship and additional regulations are being tightened year after year. However, despite this, companies from the Middle Kingdom can compete and even surpass American giants. Example? Tik-Tok, which in 2022 will have one and a half billion monthly active users. It is already the most downloaded app in the world.
– Metaverse is the future of social networking. The die is already cast – China’s tech giants need to capitalize on this strong trend to find new ways to engage the youngest generation of internet users – says Bartosz Bilicki of SmartVerum and adds: – You can’t get away from it, because business models are based on smartphones and mobile internet. We can already be mute sure that it’s an AR technology that uses m.in. Apps will be the key to conquering the metaverse world.
Virtual reality and social media, however, are not the final battleground in the Sino-US metaverse war. There are many indications that the main field will be games and their use in the virtual world concept. Microsoft has already made its first major move by announcing the acquisition of gaming company Activision. – The use of the metaverse seems to be quite natural in this case. It can include buying virtual items in games or creating digital avatars so players can meet each other. This model – play2earn – is gaining more and more interest from both players and creators – highlights Bartosz Bilicki from SmartVerum.
However, it is the Chinese who have the world’s largest game development company in their technology portfolio. Tecent produces both games for PCs and mobile devices. Additionally, it owns the instant messaging service WeChat, which already has over a billion users.
Very similar is the case of ByteDance, the owner of TikTok, which in the last year has bet heavily on the development of the gaming segment and weaving gamification into the brand strategy, and this is happening despite the statutory limitation of time in front of computers for underage players.
The list can be endless, because Alibaba, an e-commerce holding and one of the largest companies in the world, is about to launch augmented reality glasses. They will be overlaying digital technology with the real world.
They will close with an online wall?
There is also already the first Chinese metaverse, namely XiRang, which can hold 100 thousand. people, but even her owner – Baidu – announces that this is a project in the experimental phase for now and we will probably wait another six years for the final version.
– However, it can already be seen that in terms of technology the Chinese do not have to fear competition for the metaverse world. They also have the necessary “know how” and enough financial resources to quickly become a leader in the race for the new internet – Bartosz Bilicki points out.
Even Chinese cities and regions are looking for opportunities in the metaverse. Last year, Shanghai mentioned the use of virtual worlds in its five-year development plan for the information technology industry.
– It is very possible that the authoritarian inclinations of the rulers in China will ensure that, at least initially, the local metaverse will not go beyond the borders of the Middle Kingdom. We can be almost sure that they will not let companies from America or Europe. Whether they use the metaverse to conquer the internet will probably depend on a cold calculation of profits and losses – comments Bilicki.
What will be paid in the Chinese metaverse? Definitely not on the censored Bitcoin, because the government of this Asian giant restricts trading as well as mining of cryptocurrencies. However, work is underway on a Chinese digital yuan, which will be issued by the central bank there.
Bartosz Bilicki – Smartverum
Bartek is an active member of the Polish blockchain industry, former CEO of Trifinity (innovation lab), director at Smartverum and author of the above article.