Tech giant’s latest move, regulatory action

Imagine this: metaverse with Chinese characteristics. That’s how the virtual world everyone is talking about will likely resemble the world’s second largest economy.

China’s tech giants are starting to invest in the metaverse – the latest buzzword in internet technology. It’s a term with no specific definitionbut mostly understood as the virtual world that people will play and live in.

Censorship is likely to be rife and regulations tighter as Beijing continues to closely scrutinize the activities of domestic tech companies.

US companies like the parent Facebook Meta walking all in metaverse conceptwhile Microsoft located it Proposal to buy back of the game company Activision as a play on the subject.

Chinese companies are taking a more cautious approach. So what are they going to do and how will the regulation play out?

In China, the total addressable market for the metaverse could be 52 trillion yuan, or about $8 trillion, Morgan Stanley said in a note published last month.

Companies like Tencent, NetEaseTikTok owner ByteDance and Alibaba could be the frontrunners in this field among China’s internet companies.

That has to do with the kind of apps that can be part of the metaverse. Analysts say that virtual reality, gaming and social networks may be some of the initial applications.

This could include things like buying virtual in-game items or creating your own digital avatar to join meetings.

“Metaverse is the future of social networking. All of China’s tech giants must embrace it to find new ways to attract the youngest generation of Internet users, which is very important in the future. their business models on smartphones and mobile internet have matured,” Winston Ma, managing partner at CloudTree Ventures, told CNBC.

During the November earnings call, Tencent CEO Pony Ma says the metaverse will be an opportunity to add growth to existing industries like games. Tencent is the world’s largest gaming company with a strong portfolio of PC and mobile games.

Tencent also owns WeChata messaging service with over a billion users that has social media aspects.

Ma said the company has “a lot of building technology and know-how” to explore and develop the metaverse.

Meanwhile, ByteDance has taken it positively expanded into gaming in the past year. In August, the company acquires virtual reality headset maker Pico. ByteDance also owns TikTok, the short-form video app, and the Chinese equivalent of Douyin. The Beijing-based company laid the foundations for VR, social networking, and games.

Alibaba this year said it plans to roll out augmented reality glasses for virtual meetings. Augmented reality refers to virtual images that overlay the real world. Again, this could be a game on the metaverse. The e-commerce giant has launched a “virtual influencer” named Dong Dong for the Winter Olympics in Beijing. The digital avatar can be found on Alibaba’s Taobao shopping app and provides factual information about the Olympics and also advertises Olympic-related items.

NetEaseone of China’s gaming giants, has set up a base in the southern province of Hainan, focusing on developing metaverse apps, local media report last year.

Giant search Baidu toss out a last year’s metaverse app called XiRang, a kind of virtual world that can hold up to 100,000 people at a time. However, Baidu executives downplayed the app’s expectations at launch and said many aspects were still inadequate. Ma Jie, vice president of Baidu, said it could be six years until a full launch.

However, there are signs that China’s biggest tech names are starting to experiment and lay the groundwork for future applications.

Charles Mok, founder of Tech For Good Asia, told CNBC: “Similar to the pitch we’ve seen from Meta, the concept of the metaverse could at first relate to VR/AR enabled games and social interaction environment”.

“These will obviously be the areas where the Chinese tech giants will go first, with cutting-edge features in China – such as payments and integrated online services like WeChat – having can be extended and integrated into the metaverse.”

China’s tech companies’ metaverse push comes after a years of rigorous testing on regulations technology sector of the country.

New antitrust law for internet platforms has been proposed, while a milestone The personal data protection law has been passed. Beijing also has cut the amount of time Children under 18 years old are allowed to play online games.

These existing regulations will likely be used to regulate metaverse applications, analysts say, even as new ones are developed.

Hanyu Liu, China market analyst at Daxue Consulting, told CNBC: “The sheer diversity of metaverse applications means that developing a ‘one-size-fits-all’ set of policies would not be feasible. .

“Each particular application will receive its own unique set of regulations, which build upon the existing legislature.”

China also continues to censor content on its tightly controlled internet.

“We should also expect to see tight censorship, which means there will most likely be an isolated Chinese supermodel, cut off from the world,” said Liu.

There are more specific regulations that analysts say could be used to govern the metaverse.

In January, the authorities approved a set of regulations governs how internet companies can use recommendation algorithms. Then there are the draft rules regarding the so-called “deep synthesis” technology. This involves software that can be used to create or edit voice, video or images, or virtual settings. These two rules overlap.

“This overlap with the recent algorithmic rule specifically required by the new rule will have an important impact on Metaverse companies in China,” Ma said.

Even Chinese cities and regions are finding opportunities for the metaverse. Last year, the big city of shanghai mentioned the metaverse in the 5-year development plan of the information technology industry.

“China is extremely smart when it comes to this issue. It knows well when and where to keep a hand; close enough for careful monitoring, but not to the point of irreparably damaging harm. for the industry,” said Liu.