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Brave new world – local tech companies are at the fore


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The Chinese pianist and the virtual dancer Luo Tianyi on a dark stage
The virtual dancer Luo Tianyi at a group with China’s star pianist Lang Lang: Luo was created in 2012 and has around 500 million followers on the Weibo short blog platform. © Zhou Jianzhong / Imaginechina / Imago

Not only Facebook plunges headlong into the “Metaverse”. China’s tech giants also want to be part of the creation of completely new virtual worlds right from the start. They have the prerequisites.

  • “Metaverse” is the tech buzzword of the hour in China too.
  • With gaming giants like Tencent and high 5G penetration, the People’s Republic is well equipped for the virtual parallel world.
  • The Beijing government, however, remains skeptical: it wants to direct the building of the brave new worlds.
  • This article lies IPPEN.MEDIA in the course of a cooperation with the China.Table Professional Briefing before – had first published him China.Table on December 3, 2021.

Beijing / Berlin – Although Facebook is in China* is still banned, suggested Mark Zuckerberg’s announcement, rename his company to “Meta” * and from now on to devote himself to the development of a so-called metaverse, also in the People’s Republic high waves. Just one day after the name change, the Chinese search engine provider settled Baidu * secure the “metaapp” brand on October 29th. The Chinese gaming giant NetEase and the e-commerce giant Alibaba * also rushed forward to get involved early on in “metaverse” business models, at least in name – for example with an unspecified “Ali Metaverse”.

According to Bloomberg Intelligence the Metaverse industry could reach $ 800 billion by 2024. And according to forecasts by PricewaterhouseCoopers (PwC), by 2030 it will even be worth $ 1.54 trillion.

Metaverse: New Home for Humanity

All of this is astonishing given the fact that no one can explain in detail what the metaverse actually is. The term itself comes from the 1992 science fiction novel “Snow Crash”. There, the US writer Neal Stephenson describes a virtual reality similar to the matrix in which people as avatars lead an escapist second life. “The Metaverse has its own economy. Companies and individuals can invest, buy, sell and get paid for work within the Metaverse, ”writes tech investor Matthew Ball in his essay“ The Metaverse: What It Is, Where to Find it, Who Will Build It, and Fortnite ” .

Mark Zuckerberg, who recommends the text to his employees as compulsory reading, sees in the metaverse * above all a “successor to the mobile Internet” that is no longer consumed only on screens, but in which one is actually present as a person. One scenario would be, for example, that a user buys a piece of clothing in the real world, and the avatar in the metaverse receives a virtual equivalent that he can then wear in a wide variety of digital spaces. Individual Internet platforms such as Facebook or Weibo are then no longer isolated from one another, but rather merge into a huge digital space supported by cloud servers.

The Metaverse is “not there yet, but we already have a few fundamental building blocks,” explains Zuckerberg in a one and a half hour keynote video. This includes live streams, social networks and computer games, which already form an interface between the digital and real world.

With Chinese equipment into the virtual world

In the future, for example, virtual reality glasses will enable access to the Metaverse. This is where Chinese companies come into play at the latest. According to the American consulting firm IDC, China’s market for virtual reality applications (VR) will grow by 68 percent in the next five years. The startup Oculus, which was acquired by Facebook in 2014, is still the world’s leading manufacturer of VR headsets with a global market share of two thirds, but the Chinese companies DPVR and Pico are closely following. Pico from Beijing was only dated in August Tiktok *– Acquired parent company Bytedance for the equivalent of around 1.4 billion US dollars. According to Bytedance, it intends to concentrate more on the development of “consumer-oriented VR devices” over the next few years.

The so-called augmented reality applications (AR) form an intermediate stage between the real and the virtual world. These can be glasses or windshields, on which additional information is displayed, as in the film “Terminator”, from the outside temperature to personal information about the person opposite. China also has promising players such as Nreal in the field in the field of AR. In September, the Beijing-based company, which was founded in 2017, raised over 100 million US dollars in a C financing round and now has a valuation of around 700 million US dollars. The company’s AR glasses already look like cool sunglasses. In the near future, devices could shrink to the size of contact lenses. IDC predicts that the global AR market, which is projected to hit $ 30.7 billion this year, will be worth $ 300 billion by 2024.

5G and gaming are the pillars of the metaverse

The fact that VR glasses have not yet caught on was not only due to their clunkiness, but also to the so-called “motion sickness”, a kind of seasickness that is triggered by the fact that one’s own body sensation does not coincide with the programmed world. In the past, vomit bags were handed out with glasses at many VR presentations.

The 5G cellular standard is intended to solve this problem. The fast data transfer rates make the VR experience smoother and more immersive: In the best case scenario, the feeling of immersion is so convincing that the simulated environment is perceived as real. China has set out to achieve 5G penetration of 56 percent in the next five years. According to an estimate by Ericsson, there were around 175 million 5G users in the People’s Republic at the end of 2020. Measured against the global number of users of 220 million, this corresponds to a share of 80 percent.

Immersive 3D worlds with their own currency already exist in computer games such as “Fortnite” and “Roblox”. Therefore, market observers assume that the foundations of the Metaverse will be laid in the gaming area. Dominated as the world’s largest video game company by revenue Tencent * this sector already now. The tech giant from Shenzhen owns shares in the world’s largest game publishers, including Fortnite developer Epic Games, Activision Blizzard, Ubisoft, Roblox and the online concert promoter Wave.

“Everything that makes the virtual world more real and the real world richer in terms of virtual experiences can become part of the metaverse,” says Tencent boss Pony Ma, explaining his company’s metaverse strategy. These are vague words, but the fact that Tencent already has a kind of proto-metaverse with the universal app Wechat is very real. The approximately 1.24 billion users of the service can chat on Wechat, shop and visit concerts or medical practices via live streams. These functions can be seamlessly linked in a digital universe.

China: Virtual idols are easier to control

The so-called NFT – Non-Fungible Tokens, are an important milestone in building an economy of their own in a metaverse: Anyone who buys such a “non-exchangeable token” buys a digital object. This can be art, trading cards, weapons within a computer game or even virtual land. At the end of November, a virtual property in the Metaverse game Axie Infinity for cryptocurrency was sold for 2.5 million US dollars. The ownership rights of an NFT are stored on the blockchain and are therefore unique, authenticated and forgery-proof. In this way, NFT can become a fundamental form of property in the digital world. In 2020, US $ 55 billion was spent on virtual goods worldwide.

The numerous virtual influencers who already have pop star status in China seem to have sprung from a metaverse. There is, for example, Ayayi programmed by the Shanghai startup Ranmai Technology. For Singles Day on November 11th, the strictly parted AI model presented a “Metaverse Art Exhibition” on Alibaba’s e-commerce platform Taobao, where global brands such as Burberry and the Chinese e-car manufacturer Xiaopeng exhibited NFT works of art.

The blue-haired Luo Tianyi, who was created in 2012 and has around 500 million followers on Weibo, even made it to the New Year’s gala on the state television broadcaster CCTV, one of the largest television events in the country, in the past two years. There she performed a traditional Chinese folk song, among other things. Virtual celebrities are not only undemanding brand ambassadors, they are also easier to control than stars like Kris Wu or Zhao Wei. Real singers are prone to scandals.

Beijing is also decoupling in the Metaverse

Despite all these good basic requirements, Beijing has so far responded skeptically to the idea of ​​a metaverse. The state finance newspaper issued a warning in September Securities Times from investing “blindly in such an illusory concept as the Metaverse”. Decentralized cryptocurrencies, which should also play an important role in the Metaverse, has already banned Beijing *. The non-exchangeable tokens, NFTs, are also having a hard time in China. Because the government regards them as an object of speculation, trading in them for profit is prohibited. Companies like Tencent are only allowed to offer NFTs in China as “digital collectibles” and only accept payment in the local currency, the yuan.

China will probably strive to go it alone in the Metaverse as well, which is decoupled from western products. In November, the country established its first “Metaverse Industry Committee,” led by state-run telecommunications giants China Mobile and China Unicom. The committee is supposed to coordinate the efforts for a Chinese metaverse concept. If the vision of a global metaverse is really to come true, however, international cooperation between governments and companies is required. As with e-mobility, the motto for Beijing also applies here: whoever comes first, sets the standards.

By Fabian Peltsch

[15:10] Christiane Kühl

as Fabian Peltsch came to China to study in the 2008 Olympics, the sky was nicotine yellow, but the old world empire was noticeably on the upswing. The Chinese cultural scene in particular became a second home for the sinologist. His reports appear in Rolling Stone Magazin, Deutschlandfunk Kultur, SZ, Fluter and WELT – and since August 2021 also in China.Table Professional Briefing. Peltsch lives in Berlin again today.

This article was published on 3. December in the newsletter China.Table Professional Briefing – As part of a cooperation, it is now also available to readers of the IPPEN.MEDIA portals. * Merkur.de is an offer from IPPEN.MEDIA.

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