January 21, 2022

Why China is Investing So Much in the Metaverse

In the first week of December, Beijing University of Language and Culture (or BLCU, for its acronym in English) presented its list of the top ten most used words on the internet in 2021 and the website Yaowen Jiaozi (in Mandarin, means “popular terms” ) published its own top ten. The term “metaverse” appeared on both lists […]

The post Why China is Investing So Much in the Metaverse first appeared in the Bitcoin Portal .

In the first week of December, Beijing University of Language and Culture (or BLCU, for its acronym in English) presented its list of the top ten most used words on the internet in 2021 and the website Yaowen Jiaozi (in Mandarin, means “popular terms” ) published its own top ten.

The term “metaverse” appeared on both lists and was the only foreign language word on Yaowen Jiaozi's list.

According to trade data website Tianyancha, China has registered more than 7,000 trademarks related to the metaverse. Now, large participants have invested capital, creating a “gold rush” in the metaverse and fostering actions of metaverse concepts.

In the primary market, Chinese investment institutions such as Hillhouse Capital, Zhen Fund, Wuyuan Capital, Evergreen, Morningside and Xinghan Capital have started to develop their metaverse roadmaps, including portfolio investments of social media platforms and virtual idols for game companies and virtual/augmented reality projects.

Even Luo Yonghao , entrepreneur and internet celebrity, said his next venture will be in the metaverse.

An absurd amount of Chinese money is entering the metaverse

The number of trademark applications with the term “metaverse” exceeded 7,000 on December 9th. More than a thousand companies have registered trademarks related to the metaverse.

It is important to mention that 99% of these metaverse trademarks were submitted in 2021 – and most of them were made in the last two months. Before September 22, the number of companies applying was only 130; on October 22, about 400.

Judging by the distribution of registered cities for metaverse brands, Beijing is ranked first (810), followed by Guangzhou (637) and Shenzhen (519) and Shanghai (419).

From September to November 2021, there were 26 domestic metaverse-related investments of over ten million yuan, and 35 overseas, accounting for a total of over ten billion yuan.

Compare this to China's virtual/augmented reality industry funding, which totaled 2.1 billion yuan in 2020.

In other words, the total amount of investments in the metaverse in those three months exceeded the entire amount invested in the virtual/augmented reality industry in 2020.

The race of Chinese technology giants to secure their place

Globally, social networking giant Facebook has been renamed Meta . Microsoft released Mesh for Teams , which allows groups to create their own metaverses; Google is also betting on the metaverse with its revamped Google Labs .

Big names in the apparel industry such as Adidas and Nike are taking advantage of the metaverse hype: Adidas bought an NFT Bored Ape and partnered with Yuga Labs while Nike acquired the NFT shoe studio RTFKT .

Sequoia Capital signaled a new focus after changing his Twitter bio for a day , filled with crypto slang: "We help the fearless develop legendary DAOs, from ideation to token distributions."

Venture capital firm Sequoia briefly changed its biography to reflect its investments in cryptoactives (Image: screenshot by Colin Wu)

Chinese internet giants also don't want to be left behind.

Tencent has a large number of technologies and resources to explore and develop the metaverse and has applied for trademark registrations for “King Metaverse” and “Tianmei Metaverse”.

The company is also applying for a metaverse trademark for its QQ messaging app. Invested in at least 67 game companies this year. For Tencent, the metaverse is being developed in a “game + social” approach.

Alibaba has invested in the Sandbox VR offline virtual reality experience center and the Alibaba DAMO Academy has created a laboratory, announcing that it will explore the “four layers” of the metaverse: holographic construction, holographic simulation, fusion of virtual and real, as well as the union between virtual and real.

In late August, TikTok's parent company ByteDance took another step into the metaverse, spending nine billion yuan to acquire virtual reality headset maker Pico; was the largest national acquisition in the virtual reality industry this year.

It then invested in Guangzhou Semiconductor and other companies related to the metaverse concept.

Xiaomi invested in the virtual reality-backed metaverse company Sky Limit Entertainment , founded by filmmaker Zhang Yimou.

Chinese internet research giant Baidu boarded the metaverse tram with Xi Rang (Mandarin for “land of hope”), an app to showcase the metaverse at the tech company's own artificial intelligence conference.

Although large Chinese companies are getting involved in the metaverse, China's closed technology ecosystem makes it difficult to meet the basic demands for openness and free creation that the metaverse should promise

Education about the metaverse is criticized for capitalizing on the hype

Market demand has also generated several training courses on the metaverse.

In the Dedao educational app (得到), the price of the online course “6 Lessons on the Metaverse” was 29.9 yuan, and as of November 10, more than 26,000 people had taken the course. The course quickly generated revenue of over one million yuan.

Another course in the same app, called “Metaverse: First Class”, has thousands of active daily users and its daily income exceeds 90,000 Yuan.

Some netizens question the large amount of revenue these classes generated in a short period of time – all based on a concept still under development.

“As long as the concept is not clear, what is the point of selling this type of class?” asked one commentator .

Chinese press warns of risks related to the metaverse

It's no surprise that all this investment and hype has already caught the Chinese government's attention.

The state-run People's Daily newspaper has issued a warning about the metaverse as speculators interact in virtual real estate sales. The paper highlighted the risks of money laundering, volatility, fraud and illegal financing in the lawless land of the metaverse.

The alert concluded that, because the metaverse is still in the early stages, people must wait for its development to avoid “burning out”.

Although Chinese venture capital firms are allocating money to the market, the current definition of the metaverse is still elusive and the market as a whole appears to be overheated.

After this wave of enthusiasm wears off, a group of companies will likely disappear from the market and the industry will go through the process of returning to rationalization, but it will not impede the general development of the metaverse into a general trend.

While traditional Chinese venture capital firms are betting on the metaverse, their idea of a concept is far from the metaverse of the crypto world.

The metaverse that VC firms are interested in is a next-generation form of the internet that combines the virtual world with the real world.

In his opinion, virtual/augmented reality can be used as a connecting portal between the virtual world and the physical world, so many people consider it an “entrance ticket” to the metaverse.

At the same time, even if the metaverse is in its infancy, the changes it will bring are socially significant and will further advance our patterns and daily lives, as well as bringing a huge connecting effect to the market.

The metaverse is believed to be a new community and culture for Generation Z and crypto.

Future development of the metaverse will pay more attention to intelligent interaction between people and computers, user-defined experiences and breaking barriers between virtual and real.

*Translated and edited by Daniela Pereira do Nascimento with permission from Decrypt.co .

The post Why China is Investing So Much in the Metaverse first appeared in the Bitcoin Portal .

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