Metaverse Industry Deep Research Report: The Next Generation of Immersive Internet

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1. What is the Metaverse? Why Metaverse is the next generation Internet

Metaverse: the next generation of immersive Internet

Science fiction beyond virtual and reality: the source of the Metaverse concept

Metaverse, the ultimate vision beyond virtual and reality. After disassembling the word Metaverse, it is composed of Meta and Verse, where Meta stands for transcendence, and verse stands for universe, which can be understood as creating an artificial virtual space parallel to the real world to carry users’ social entertainment and creative display. All activities such as economic transactions, due to their high immersion and complete synchronization, gradually merge with the real world, extend and expand each other, and finally achieve a “Metaverse” that “transcends” the virtual and reality, and broadens the infinite living space for mankind.

The science fiction novel “Avalanche” opened the door to the imagination of the universe. In 1992, the famous science fiction writer Neil Stephenson put forward the two concepts of “Metaverse” and “Avatar” in the science fiction novel “Avalanche”. People communicate and interact in a virtual space (Metaverse) parallel to the real world through audiovisual complexes (avatars). Stephenson imagined that on top of the noisy and chaotic future world, there still exists another country of immensely vast freedom: a virtual space composed of computer networks.

In the future, the digital lifestyle of human beings will transform the Metaverse from science fiction to reality. Just like the scene in the movie “Number One Player”, one day in the future, people can switch their identities anytime and anywhere, freely shuttle between the physical world and the digital world, and learn, work, make friends, and shop in the “Metaverse” formed by virtual space and time. , Tourism, etc. The decentralized platform allows players to enjoy ownership and autonomy, and through an immersive experience, brings the virtual closer to reality.

New technologies are connected by point breakthroughs, the birth of mobile Internet successors

The listing of Roblox in 2021 brings the concept of Metaverse back to the public eye, and the popularity continues to rise.In 1980-2000, Metaverse-related concepts such as “incarnation” appeared, and formally proposed from the novel “Avalanche”; from 2000-2010, the realization of the prototype of the Metaverse was gradually explored, and “Second Life” became the first phenomenon level Roblox, the next “Metaverse First Unit”, was also established at this stage; from 2010 to 2017, Internet giants began to deploy Metaverse related concepts, and one of the key interactive hardware VR devices set off the first wave of investment; 2017- In 2020, the progress of the virtual reality industry has not met expectations, and the industry has entered a period of technology accumulation and dormancy. Since 2020, Oculus has released the epoch-making Quest2 all-in-one, which is expected to drive down the cost and price of VR equipment. Cross the “inflection point”.

To review the development history of the Metaverse, we divide the prehistory of the Metaverse into the incubation period (before 2002), the exploration period (2003-2011), the capital deployment period (2012-2016), the low tide (2017-2019), and the metaverse Early development (after October 2020), and quantify the maturity of Metaverse and its prototype products at each development stage from the following eight dimensions: hardware, network layer, computing power, virtual platform, protocols and standards, payment methods, Content, services and assets, consumer behavior.

With a full score of 8 points, we will give our evaluation criteria: 1 point: only the concept of the Metaverse is proposed for the time being; 2 points: the concept of the Metaverse is applied to the product; 3 points: the product with the Metaverse concept as the core; 4 points : Products that can be commercially promoted; 5 points: relatively complete Metaverse prototype products; 6 points: products that partially meet the Metaverse standard; 7 points: products that meet the meta-standard; 8 points: future Metaverse products may break through There are researchers’ imaginations. The sum of the scores of the eight dimensions is the maturity of the Metaverse prototype under our standards. We believe that Metaverse currently has a relatively complete product volume on the hardware side led by VR/AR, but it still needs a longer development period in terms of the openness and commonality of protocols and standards and the cultivation of consumer behavior.

Metaverse Industry Deep Research Report: The Next Generation of Immersive Internet

Metaverse is a collection of countless technology and application landing nodes. On the basis of the mobile Internet, Metaverse will put forward higher requirements for immersion, participation, and sustainability. Therefore, many independent tools, platforms, infrastructures, and protocols will support its operation. We believe that with the improvement of the maturity of AR, VR, 5G, cloud computing and other technologies, Metaverse is expected to move from concept to reality. The positive cycle of Metaverse will be gradually opened up, that is, the underlying technology promotes application iteration, and then the market demand increases to feed back the continuous progress and iteration of the underlying technology.

The five elements of the Metaverse: a permanent immersive social ecology, a vast and open parallel universe

On the basis of the extensive discussion of the Metaverse in the market, we further refined the five essential elements of the Metaverse:

The Metaverse will be large-scale. On the one hand, the number of DAU, MAU, and simultaneous online users of Metaverse will exceed all existing mobile Internet applications and platforms; on the other hand, Metaverse includes not only games, but also education, mobile office, digital industry and other broad-boundary Rich content, the size of the space that can be explored, and the richness of experience are even expected to exceed the real world.

The Metaverse will have a sense of immersion. With the advancement of technology, this sense of immersion can be achieved through VR/AR devices and even brain-computer interfaces. Metaverse ports such as VR glasses will become standard features like Bluetooth headsets in the future. At the same time, the virtual world and the real world converge and merge, and online + offline immersive scenes will become an important component of the Metaverse.

The Metaverse will be highly social. Beyond the real world and the virtual world of the Metaverse, social interaction is an essential function. Users in the Metaverse can play roles that they may not be able to play in the real world, and interact with other people in the Metaverse with this identity to produce collaboration and create value.

The Metaverse will continue to exist. Metaverse is not a platform operated by a certain organization or company. Its operation will continue to exist without interruption; as a user, Metaverse will continue to operate regardless of whether it is online or not, and will have an impact on the user’s Metaverse role; as a creator , The value of its creation in the Metaverse, and the assets held will not disappear due to the platform shutdown.

The Metaverse will be open. On the one hand, Metaverse needs to open up various independent games, applications, and social interactions to achieve mutual recognition and exchange of standards, protocols, and currency systems; on the other hand, Metaverse opens technical interfaces to all third parties so that they can be added freely content.

The Metaverse is not out of reach, and it has been the first to get involved in the application scenarios of the Metaverse.

Metaverse will profoundly change the organization and operation of the existing society through the integration of virtuality and reality. Instead of replacing real life with virtual life, it will form a new two-dimensional lifestyle of virtual and real life, thus giving birth to a new type of online and offline social relationship, from a virtual dimension. Give new vitality to the real economy. From the perspective of the carrying situation of human civilization: fiction has always been the underlying impulse of human civilization.

Metaverse Industry Deep Research Report: The Next Generation of Immersive Internet

Metaverse has profoundly changed the existing life and production methods, bringing a broad space of value

The Metaverse will truly change the way we interact with time and space, bringing a broad space of value to society and individuals. 1) The Metaverse includes the virtual world that can carry the real activities of human beings. Based on the immersive, real-time and diversified characteristics of the Metaverse itself, individuals can use the Metaverse to increase diversified life experiences in a short period of time; 2) the Metaverse Virtual digitization reduces the barrier of physical distance and the time cost of commuting, and reduces the impact of traditional urban pain points such as traffic jams on the overall well-being of the society. 3) Metaverse clears away the social barriers caused by physical distance, social status and other factors, and provides more means for individuals to realize their self-worth; 4) Metaverse is a reconstruction of social, life, and economic and social systems in reality And integration, put forward higher requirements for core capabilities such as hardware and computing, content creation, and service enhancement, based on this, it will transform the current social and economic ecology.

Why cloud games will be a reasonable road map for mankind to the Metaverse?

The game will become a killer application scenario, promoting the realization of the early form of the Metaverse. With the continuous development of the industry, games will increasingly promote the popularization of technology, lower the barriers to entry in the industry, and make large-scale, real-time content production possible in the future. It may also lead to the creation of new game narratives, game frameworks and production methods. As a super digital scene, the game will continue to promote the development of the technology behind it. As the problem continues to be optimized and improved, players can experience a high-quality hosting experience. Correspondingly, the creators involved will also get matching benefits, and then promote technological innovation.

Cloud gaming is a technical solution for the operation of online games: the parts that require higher hardware computing power such as game operation and screen rendering are transferred from the player side to the cloud server side, and the user side only retains the operation signal input and picture decoding display . 1) The original intention of the cloud game concept is to reduce the player’s hardware investment cost, “using bandwidth to convert computing power”, so as to increase the conversion rate of potential players as much as possible. 2) The technical architecture of cloud gaming itself is not complicated, but its implementation requires the cooperation of communication technology, computing architecture (cloud computing, edge computing), and algorithms (AI, audio and video decoding).

The growth rate of China’s cloud gaming market is significantly higher than the global average growth rate, and China will become one of the most promising cloud gaming market. From 2020 to 2023, the CAGR of China’s cloud gaming market will reach 135%. The CAGR of the global cloud gaming market will reach 101%. The main reason is that it is estimated that by 2023 there will be 913 million active smartphones supporting 5G in China, which will further expand the world’s largest 5G network. The 5G network has lower latency, higher bandwidth, and more connected devices. These are improving mobile The experience of cloud gaming under the network connection will play an important role.

Users look forward to new experiences, and the C-side imagination space of Metaverse is far more than just games. Users look forward to getting rid of the “thumb party” through physical interaction methods such as twin immersive worlds and somatosensory devices. Metaverse is now able to provide users with a comprehensive experience of virtual vision, hearing, and touch, realizing the comprehensive expansion of human sensory dimensions and creating huge C-side demand.According to VR Gyro, 20 years of Quest platform film and television content accounted for 12%, ranking third, second only to action and casual game content. Well-known websites such as Netflix and Youtube have entered the game. VR viewing is an important breakthrough for Metaverse in addition to games. In the future, it is expected that offline cinema and online flat-screen viewing experience will be upgraded.

Manufacturing virtualization applications to promote B-side efficiency

Compared with the current issues of data privacy and insufficient hardware equipment development in the C-terminal Metaverse, the implementation of the B-terminal Metaverse may come sooner. The B-side is different from the C-side, mainly focusing on solving practical problems, reducing communication costs, and accelerating project implementation.For engineering-grade AR smart glasses, it has three major advantages such as better skills training for the manufacturing industry, simplification of maintenance operations, and improvement of quality control. At the same time, there is no need to consider the aesthetics and comfort of the C-end requirements too much. The problem is that some products are already accelerating.

Nvidia is the pioneer of Metaverse B-side applications and has begun to gradually connect manufacturing and virtualization. NVIDIA’s Omniverse can be translated into the Almighty Universe, mainly for B-side client developers, and is a development platform that helps them turn reality into virtual. One of the most important features of Omniverse is that it follows the laws of physics and can simulate particles, liquids, materials, springs, and cables. Nvidia’s goal is to first design everything in the physical world as virtual products and test them, apply virtual rendering previously only used for games to all physical construction links, and finally create an industrial-grade B-end all-round Metaverse.

Nvidia’s digital car factory can greatly improve the efficiency of car manufacturers in design planning, assembly production, and vehicle testing. In Omniverse’s virtual car factory world based on physics and nature, robots can be continuously trained and learned. They come in various sizes and shapes and can simulate handbags, pick-and-place arms, forklifts, cars or trucks. BMW cooperated with Omniverse to build a digital factory in early 21st, in Omniverse to simulate the whole process, create a digital twin, and operate in a way that allows robots and humans to work together. This reduces the time required to produce a fully customized BMW car to less than one minute.

With the economic support of Metaverse, the digital asset NFT may “break the circle”

The full name of NFT is Non Fungible token, or non-fungible token, which is a special digital asset based on the blockchain. Compared with traditional virtual cryptocurrencies such as BTC (Bitcoin) and ETH (Ethereum) and homogenized tokens such as traditional currencies such as the U.S. dollar and RMB, they are irreplaceable and indivisible. The unique information of the NFT will be stored in its smart contract and recorded on the blockchain of the token.

Metaverse Industry Deep Research Report: The Next Generation of Immersive Internet

NFT has uniqueness, scarcity, and indivisibility, so that the assets created by creators have attributes such as collection, preservation, and circulation in the Metaverse, which may become a strong support for the establishment of the Metaverse economic system. Take the game “The Sandbox” as an example. Each piece of land in the game corresponds to an NFT. The owner of each piece of land retains the right to create and modify the land. The unique shape of the land makes the user’s creativity scarce. NFT can more effectively increase the profits of developers, thereby promoting the development of the Metaverse economy.

Virtual assets such as NFT have gradually become one of the payment methods used in fields such as games and UGC payments, with great development potential. 1) Compared with today’s game ecosystem (ie V-Bucks, COD points, Robux, etc.), NFT suffers from a much lower degree of currency fragmentation, and supports two-way exchange (NFT is exchanged for USD and USD is exchanged for NFT), And the same NFT can be used in different platforms (such as Axie Infinity Decentraland). 2) The characteristics of NFTs, including irrevocable ownership, open and interoperable economic models, and the ability to reuse virtual assets indefinitely, are expected to boost consumer spending.

When will the Metaverse revolution come?

Changes in the times often experience two separate waves of technological change, industrial and process change

The power revolution did not grow steadily within one wave. On the contrary, the power revolution has experienced two separate waves of technological, industrial, and process-related changes.

The first wave (1881-1909): Electricity is quickly commercialized, but it is still mainly used for lighting. In 1880, the incandescent light bulb was commercialized only a year after its invention. In 1881, Edison established power stations in Manhattan and London. But nearly 30 years later, the popularity of electricity is still low: less than 10% of the mechanical driving force in the United States comes from electricity, factories still use noisy and heavy steam generators, and industrial infrastructure has not been replaced by electricity.

The difference between the first wave and the second wave is not how much electricity is used by American industry, but the focus is on the depth of electricity used—and the degree of design around electricity. New technologies and cognition have enabled factories to gradually use wires instead of gear drives to transmit kinetic energy, and install customized special motors to complete sewing, cutting, stamping, and welding tasks. So that the same factory can have more space, better lighting, better air and fewer dangerous equipment. Factories can configure their production areas around the logic of the production process and reconfigure their work areas on a regular basis, thereby greatly improving production efficiency by arranging assembly lines.

The second wave (1910-1929): Electricity-based infrastructure, equipment, and technology began to harvest a lot of investment and innovation, and labor and capital production efficiency created the largest average annual growth in a century. In 1913, Henry Ford created the first assembly line, which can use electricity and conveyor belts to reduce the production time of each car from 12.5 hours to 93 minutes; within one year of production, the company produced more cars than other companies in the industry.

The change of the times is achieved by multiple inventions and contributions, and it needs to be iteratively driven to achieve a positive cycle.

Take the mobile Internet as an example. The mobile Internet is achieved by a collection of multiple inventions and contributions. The iPhone can be considered the beginning of the mobile Internet because it integrates and refines all the elements that we now consider to be “mobile internet” into a minimal viable product that we can touch, hold, and apply.However, the generation and driving of the mobile Internet is jointly created by a large number of innovations including 3G, App Store, Java and Html programming standards and chips.

The improvement of iphone hardware brings the possibility of a new user experience, and the high activity of users pushes up the performance of companies in the entire industry chain, thus opening up a positive cycle. Improved hardware drives user activity to reach a high growth rate, and brings higher revenue and profit growth to participating companies, thereby promoting higher quality products, applications and services. For example, higher-quality games use better GPU performance, and image social apps such as Instagram also make better cameras useful. The development of the iPhone requires innovation and investment in the entire ecosystem, most of which are not actually under Apple’s jurisdiction.

Metaverse Industry Deep Research Report: The Next Generation of Immersive Internet

We believe that the changes that can drive the entire market must be self-driven, with demand, technology, and products driving each other and spiraling upward. The user’s demand for new experiences and new products points out the direction for the development of new technologies; the advancement of multiple technologies is an important driving force for reducing costs in various important links and thus spreading the application; the benefits of large-scale applications for the enterprise and the whole are also Brings possibilities for the exploration of technological potential and all-round technological breakthroughs. For example, the public’s demand for low-noise, high-comfortable new energy vehicles, the decline in the cost per kilowatt-hour of photovoltaic and wind power generation, and the continuous iteration of energy storage and charging technologies are gradually forming our foreseeable self-driving cycle.

Metaverse has started a positive cycle, entering a period of technological change, and there is still a long way to go from the wave of industrial change

With reference to the two waves of the power revolution era, we believe that Metaverse is already in the early stage of the first wave of technological change, and there is still a long way to go from the second wave of industrial change. At present, the related applications of Metaverse include cloud games, NFTs, digital factories, etc., all of which remain at the stage of utilizing Metaverse related technologies, and Metaverse has not been applied as an industrial infrastructure. If in the virtual world brought about by the Metaverse, as various types of objective conditions in the real world weaken or disappear, new industries and industrial operation models can be produced, then it can break through the second wave of industrial transformation and become the totality of mankind. Quantitative economy brings brand-new growth.

Based on the above discussion, we believe that the development prospect of Metaverse will be divided into three stages, from “technical revolution” to “industrial reform” and then to “ultimate form”, Metaverse will gradually mature. The first stage is the technological transformation stage, which mainly focuses on the gradual rollout of consumer-grade VRAR hardware within 3-5 years as the main line of development. With the continuous advancement of technologies such as intelligence, virtualization, and decentralization, a number of independent virtual platforms using AI, VR, and blockchain technologies have emerged one after another, providing users with higher technical content, novelty, richness, and diversity The prototype product at this stage is mainly a pan-entertainment form of social + light games. The second stage is the stage of industrial transformation, and the main line of development is the gradual improvement of Metaverse infrastructure such as computing power, AI, and communication technology within 10 years. The industry will make deep use of the Metaverse to create a new production model and improve production efficiency. The Metaverse economic system is also established here, and the NFT that gathers a “consensus” is expected to become the “currency” of the Metaverse economy. The third stage is the ultimate form stage, which mainly looks forward to the possible applications of brain-computer interfaces and the interconnection of the Metaverse platform in the next 10-20 years. In the early stage, multiple independent virtual platforms began to converge and open up, and the completed standards and agreements were formed. Users are expected to achieve direct information connection through brain-computer interfaces, and the interaction with the virtual world will reach the level of symbiosis of virtual and real. The real Metaverse era will come.

Metaverse Industry Deep Research Report: The Next Generation of Immersive Internet

2. Industry chain progress: Metaverse moves from technological change to commercial landing

Metaverse research starts with eight core frameworks

The technical architecture of Metaverse itself is not complicated, but its implementation requires the cooperation of communication technology, computing architecture (cloud computing, edge computing), algorithms (AI, audio and video decoding) and other technologies, following the wooden barrel theory, so it has long been Always staying at the conceptual stage; but with technological breakthroughs in various fields, the metaverse will eventually move from concept to reality. We believe that the core frameworks for the realization of Metaverse are: hardware, network layer, computing power, virtual platform, protocols and standards, payment methods, content, services and assets, and consumer behavior.

The VRAR market is recovering rapidly, and the trans-epoch Metaverse terminal may arrive

The C-side acceptance of VR and AR equipment is high, and the cost reduction path has been proven. The commercial feasibility of Metaverse access equipment will soon be verified. There are two core elements of commercial feasibility: first, the demand is real; second, the revenue cost structure of the product can bring commercial benefits and support iterative upgrades; in the high-tech industry where supply drives demand, the two elements are mutually causal. 1) Demand side: Facebook’s oculus pricing plan has been released, and consumer acceptance is high; Apple’s entry is expected to create explosive products; 2) Supply side: The short-focus technology path and their respective cost reduction paths have been proven; commercial feasibility Has been basically verified by the industry.

VRAR: Rapid recovery after the trough, Metaverse access terminal is expected to roll out

2D computer screens cannot achieve true immersion. The maturity of AR (augmented reality) and VR (virtual reality) technologies makes virtual experiences more and more fascinating, gradually reaching indistinguishable from the real world, achieving “permanent immersion”, which is a Metaverse The first entrance. 1) AR refers to users directly or indirectly observing real scenes and superimposing digital elements on real-world objects and backgrounds. The AR game “Pokémon Go” captures the play process of “Pokémon” and projects it into the real scene, which is extremely substitutable and interactive. It has been on the line for five years and has been popular. 2) VR refers to a computer-generated virtual environment that fully takes over the user’s five senses, provides a closed experience that isolates their physical environment, and realizes information input and output through motion capture. For example, in the VR game “Rhythm Lightsaber”, along with the dynamic rhythm, cut the “oncoming” red and blue squares. There are also opinions that put forward the concepts of MR mixed reality and XR extended reality, which combine real and virtual scenes, similar to the combination of an upgraded version of AR and VR.

The shipment volume of VRAR equipment has surged, and the access terminals of Metaverse have been rolled out, helping the gradual penetration of the territory of Metaverse. In 2020, the shipment volume of VRAR equipment totaled 7.06 million, of which 6.37 million VR equipment, accounting for 90.23%; the largest shipment of VR all-in-one machines, at 3.09 million units; and 690,000 AR equipment, accounting for 9.77%. According to IDC’s forecast, by 2024, VRAR equipment shipments will surge to 76.71 million units, of which 35.61 million VR devices, accounting for 46.41%, VR all-in-one shipments are the largest with 25.25 million units; AR equipment 41.11 million units , Surpassing VR devices, accounting for 53.59%, and AR all-in-one machine shipments are the largest with 24 million units.

Technical barriers have pushed up the industry concentration, Oculus has a solid position, and Facebook has the first opportunity in the universe. According to Counterpoint data, in 2020 global VRAR mainstream manufacturers’ shipment market share ranking, Oculus takes the lead, accounting for 53.5%; Sony is 11.9%, followed by HTC (5.7%). , DPVR (5.5%) and Pico (4.8%), the top 5 together accounted for 81.4%, with a high degree of concentration. At the same time, among the top 5 devices with the highest sales in 2020, Oculus has 3 seats, which shows its position in the industry. Among them, Oculus Quest2 accounted for about 35% and ranked first in sales; Sony PlayStation VR and Oculus Quest ranked 2-3 respectively, accounting for 10-15%; Oculus Rift S and Valve Index ranked 4-5 respectively, accounting for 5% about.Domestically, the current mainstream VR manufacturers include Pico, iQiyi, NOLO, Core Vision, Thousand Magic Mirror, Da Peng, etc. The current share of PICO and Da Peng (DPVR) is relatively leading, and the industry is still showing a diversified development pattern.

Metaverse Industry Deep Research Report: The Next Generation of Immersive Internet

VRAR products are not up to the ideal type, Metaverse is waiting for consumer-grade commercial explosions

VR all-in-ones are in line with the long-term development trend of consumer electronics products, and the long-term penetration rate can be expected. The current VR products are mainly divided into three categories: external headsets, mobile headsets, and integrated headsets. As the computing power increases, the content ecology is gradually enriched, and the cost is reduced, the advantages of VR all-in-ones that can be used independently and free from external device restrictions are becoming more and more prominent. According to IDC estimates, the proportion of VR all-in-one shipments in the total shipments of VR equipment will increase from 48.5% in 2020 to 70.9% in 2024.

At present, mainstream VR all-in-ones still have a gap with the ideal Metaverse access terminal in terms of technical parameters, application scenarios, cost and selling price, and it is expected that it will take 3-5 years to develop before the commercial explosion.

1) The mainstream VR equipment represented by Quest 2 requires 3-5 years of technological iteration to reduce costs, so that various technical parameters can reach the required standards for an ideal Metaverse experience. To achieve the immersive experience required by Metaverse and to solve the dizziness problem of using VR devices, the screen display needs to be as close to the real world as possible. This requires the VR device to have as wide a field of view, high update speed and resolution as possible. At present, the most popular Quest 2 in order to reduce costs and open the market, it is not the most technologically advanced in the industry. For example, the Valve Index headset has reached 120Hz update speed, 130° field of view, and arpara has reached 5K resolution and 200g weight, but they sell The price is in the range of 4000-7000 yuan. We believe that the current state-of-the-art technology is very close to the ideal requirements of the Metaverse. With reference to the performance improvement and cost reduction of Oculus from Quest to Quest2, it is still necessary to continue to reduce the cost to reduce the performance of high-end machines to a thousand yuan machine. “This process may take 3-5 years.

Metaverse Industry Deep Research Report: The Next Generation of Immersive Internet

2) At present, the positioning of VR all-in-one is close to home game consoles, and some people who pursue high-tech gaming experience are the first to try it. It is still necessary to wait for a breakthrough in the direction of virtual keyboards to reach the public and become a productivity tool. 1) Oculus Quest2’s shipments (expected to be 7 million units in 21 years) and price (about 2,400 yuan) are close to those of the Nintendo NS (8.28 million units in the first half of fiscal year 22, about 2,500 yuan), try Quest2 Of users are mostly attracted by the novel experience of VR games. 2) The current VR all-in-one machine needs to use the handle to align the virtual keyboard on the screen to input keys one by one. The text input is cumbersome and not conducive to office work. Microsoft and Apple have applied for touch detection and other related patents in 19 and 20 respectively, which can realize efficient text input through projection keyboard and hand tracking, but there is no clear timetable for commercialization.

Brand-new interactive technology enhances the Metaverse experience, brain-computer interface is the future interactive black technology

Interactive technology is a bridge that connects devices and users. ARVR realizes experience upgrades through spatial positioning and motion capture. According to the human-computer interaction report of Tsinghua University, human-computer interaction has evolved from a command line interface to a graphical user interface in the past few decades, and then to the current touch interface and three-dimensional interactive interface. On the touch interactive interface, the user directly manipulates the interactive content on the screen with his finger, which mainly exists in smart phones and wearable devices; in the three-dimensional interactive interface, the user generally makes specific actions through the body to interact with the interface elements in the three-dimensional space. Interaction, mainly used in VRAR scenes. In the construction and development of Metaverse, the competitiveness is a brand-new user-machine interaction mode. The development of VRAR equipped with interactive technology can enhance the experience of Metaverse.

At present, VRAR interactive equipment technology is mainly divided into external laser image positioning, external image positioning and built-in image processing positioning. The external laser image or external image positioning is accurate, but cost reduction still requires iteration. 1) External laser image or image positioning is to determine the player’s movement trajectory and displacement through the communication and interaction between the external base station or camera, the handle and the helmet, which is fast, accurate in position, but expensive. The main programs include Kinect somatosensory, PS Move, Light House, etc. 2) Built-in image processing to locate the changes in the picture taken by the helmet camera, combined with custom algorithms to estimate the motion trajectory, does not require additional equipment, is more portable, and is the current mainstream choice of new products, such as Oculus Quest2, Pico Neo2, iQiyi Qiyu 2 , Huawei VR Glass uses the InsideOut positioning solution. InsideOut currently has a variety of sensor solutions such as multi-camera, infrared camera, and lidar. Usually, it is necessary to match the coprocessor in the helmet. The main direction in the future is to reduce power consumption while improving positioning accuracy.

Metaverse Industry Deep Research Report: The Next Generation of Immersive Internet

At present, the brain-computer interface has achieved some breakthroughs in subdivision areas such as information collection, information analysis, and feedback. In July 20, Neuralink, a two-year brain-computer interface (BCI) company under Elon Musk, achieved a breakthrough in brain-computer interface technology. By implanting proprietary technology chips and information strips, it can be read directly through USB-C Brain signal. In the same month, the “non-submersible” brain-computer interface technology also ushered in progress. The UCSF team proved for the first time that the deep meaning of a word spoken by humans can be extracted from brain activity, and the extracted content can be quickly converted into text.

The construction of key infrastructure is steadily advancing, and the future of Metaverse is not yet coming

Metaverse data transmission needs are high, and the commercial use of 6G may be a key node

The advancement and popularization of communication technology is the key to whether Metaverse can achieve large-scale expansion. The salient feature of Metaverse is the sense of large-scale participation. The hundreds of millions of interactive users will place higher requirements on the performance and carrying capacity of terminal servers. 5G/6G has the characteristics of high bandwidth, low latency, and massive connections. Therefore, the maturity of the underlying communication technology will greatly affect the number of users online at the same time, which will become the key to whether Metaverse can achieve scale expansion. The advancement and popularization of communication technology from 4G to 5G and even 6G will increase the transmission rate and reduce the delay, and promote the integration of virtual and reality.

5G technology combines the three-pronged approach of solving large bandwidth + reducing delay + equipment lightweight, providing a power engine for the development of the VRAR industry.

Metaverse Industry Deep Research Report: The Next Generation of Immersive Internet

1) Satisfy VRAR bandwidth requirements: 5G millimeter wave speeds can reach ten times or more than 5G Sub-6GHz, which is dozens of times that of 4G LTE networks, which can well meet the application requirements of VRAR content with huge traffic.

2) Satisfy the low-latency requirements of VRAR: It provides the possibility for the realization of ultra-large and high-quality (low-latency, low-packet loss) interactions between users and between users and the virtual world.

3) Meet the wireless and lightweight requirements of VRAR equipment: Through 5G/6G communication technology, the large computing requirements of VRAR equipment in the future will be transferred to the cloud for completion. The client only needs to complete the display and operation, which will greatly reduce the operating threshold and be effective Control the volume and weight of VRAR equipment.

Computing power will always remain scarce, and marginal computing power improvement is a more anticipated direction

The creation and operation of the metaverse cannot be separated from the support of computing power. In order to perform real-time calculations of epic data, strong artificial intelligence and full online, the required computing power of the metaverse is also unprecedented. We believe that, as a virtual world that carries activities, on the one hand, the creation of the virtual content and screens of the metaverse is based on graphics rendering and computing power support; on the other hand, whether users in the metaverse can interact with each other immersively The experience needs to be based on real modeling and powerful computing power.

The solution for the development of computing power will be the simultaneous development of cloud and edge terminals, and the development of edge computing power is more worth looking forward to. 1) At present, high computing power devices still account for a relatively low proportion. For example, less than 1% of computers or hosts can play “Microsoft Flight Simulator” at the lowest image quality. For Metaverse, which requires higher computing power, if you want to include as many terminals and users as possible, you need to reduce the requirements for device configuration. Cloud rendering and video streaming are an inevitable idea. 2) However, cloud computing also greatly increases the amount of data that needs to be transmitted with low latency. At the same time, it is necessary to plan for peak demand, and cloud servers usually face the problem of low utilization. 3) The improvement speed of consumer-grade processors is much faster than the speed of network improvement, and its replacement frequency is much higher. And the speed of cloud transmission has the speed of light as the upper limit, and the edge end does not have this limit. We believe that the true edge computing model in the future will be more and more powerful mobile phones in the user’s pocket, which will take on most of the calculations for other devices around the user, such as watches and AR glasses.

Metaverse Industry Deep Research Report: The Next Generation of Immersive Internet

At present, the cost of cloud computing is higher than that of the edge, and edge computing has a relative advantage. 1) Cloud computing supporting costs may be higher. In addition to the cost of GPU computing itself, cloud computing also needs to pay bandwidth fees, cloud hard disk data disks, system disks and other costs. Take Tencent Cloud GPU computing type GN6 as an example, the bandwidth cost will increase with bandwidth usage. If you use bandwidth above 40Mbps, the bandwidth cost even exceeds the cost of GPU computing itself. 2) Because edge computing is specially designed for different scenarios, it can effectively reduce costs. Taking the mainstream home game console PS5 as an example, by abandoning unnecessary functions for running games, and focusing on the subsequent sale of game content, the purchase cost is only 4,000-6,000 yuan per unit. However, domestic mainstream cloud computing service providers still have a monthly subscription fee of 2,600-3200 yuan under the condition of lower built-in GPU computing power.

The virtual Metaverse platform forms a virtuous circle of creators’ economic output, and the game platform will still be the mainstay in the short term

The virtual platform is the development and operation of the environment and the world, in which users and enterprises can explore, create, socialize and participate in various experiences (such as racing, painting, class, listening to music, etc.), and engage in economic activities. These businesses are different from traditional online experiences and multiplayer video games because they have a huge ecosystem of developers and content creators that generate most of the content and collect most of the revenue on the underlying platform. In the foreseeable future, most users will interact with the embryonic metaverse through consumer-oriented, interactive and immersive virtual platforms.

The current leading virtual platform’s MAU maintains a high growth trend, and the platform is mainly based on games for the time being. Currently, the most popular virtual platforms are Roblox and Minecraft, followed by GTA online and Fortnite Creative Mode (both of which are just a subset of its main game). These leading virtual platforms all originated from games, because games are currently the most complex, largest, and most diverse simulation. We believe that other consumer-level experiences have not yet demanded similar computing power in a short period of time.

Metaverse Industry Deep Research Report: The Next Generation of Immersive Internet

After the virtual platform is built, it can promote a virtuous circle among producers, users, and content. The virtual platform provides technical infrastructure for creation (including engine + studio + tools), services that support creation (voice calls, player accounts, payment and other services), and consumer spending shared with creators and developers on the platform. Better technology and tools will bring a better experience, which will bring more users and more spending per user, which means that more platform profits can be generated, which can produce better technologies and tools, and attract more users. More developers and more users.

Metaverse is not a version of mobile Internet superimposed on virtual reality. Interoperability exchange protocols and standards are a must

Interconnected exchange protocols and standards, including various interoperable technical solutions, protocols, formats and related services, may be the most important aspect of Metaverse. Without them, there would be no real Metaverse, only the more virtual and immersive versions of today’s mobile Internet and application stores. More importantly, this kind of pale imitation and upgrade will be far from reaching the huge profit margins of Metaverse, nor will it be full of vitality and maintain a healthy ecology. Players are still unable to import the game content or assets they experience in Roblox into “Fortnite” or “Minecraft”. These products have not yet become a true Metaverse.

If the Internet is not open, the Internet penetration rate may be much lower than the current one. If the Internet was invented by a specific company, they may use it to sell products, place advertisements, and collect user data for profit. For example, downloading a jpg file may require a pay-per-use fee, and using IE or Chrome browsers also need to pay an annual fee . In this scenario, the Internet penetration rate may be much lower than it is now, and the commercial value of the entire mobile Internet will also be lower.

Metaverse Industry Deep Research Report: The Next Generation of Immersive Internet

At present, one of the initial realizations of Metaverse: games, does not yet support open exchange. In game development, Microsoft Xbox exclusively uses Microsoft’s DirectX programming interface, while Sony uses its GNMX for PlayStation, and Nintendo Switch requires Nvidia’s NVM. Different APIs may be more suitable for the proprietary operating systems and hardware of each platform, but will cause the lack of network effects and increase investment in content.

Economic prosperity has yet to be completed by independent platforms in the medium and long term, and the “play-to-earn” model of Metaverse is expected to develop rapidly

The digital value of Metaverse is mainly driven by virtual creation in the virtual world. The greatest profit should flow to the producers of virtual platform content, but currently hardware vendors and platforms share most of the benefits. It is difficult for Roblox developers to increase revenue, because Roblox only pays developers 25% of the user’s total investment in games, assets or virtual items, and 30% is paid to Apple. In the long run, Roblox’s economy will be affected. damage.The current major NFT and blockchain platforms are browser-based, and try to avoid the restrictions of platforms such as the App Store.

In the medium and long term, the independent Metauniverse platforms will connect to each other, and Metaverse users can exchange virtual goods between various platforms and games, thereby effectively promoting consumption and increasing the economic value of Metaverse. After the various platforms are opened up, the expansion of the use of virtual goods can effectively promote consumer consumption. If players’ equipment and props are not limited to a single game, users’ spending on games is expected to be greatly increased. In addition, consumers believe that no game can last forever, and their expenditure may be limited. The real Metaverse will change this restriction and greatly promote the prosperity of the Metaverse consumer economy.

Metaverse Industry Deep Research Report: The Next Generation of Immersive Internet

3. Market space: Metaverse will bring 500 billion-level incremental space

The Metaverse is from 0 to 1, which cannot be done by the mobile Internet

We believe that Metaverse will gradually replace some of the functions of the mobile Internet through its richer functions and experiences. We use the penetration rate of Metaverse to mobile Internet in social, gaming, mobile office and other subdivisions to measure the penetration rate of Metaverse to the mobile Internet. The universe’s domestic market space in the next 5-10 years. Formula: Metaverse domestic market space = number of domestic mobile Internet users * Metaverse penetration rate * Metaverse single-user ARPU. We believe that with reference to the improvement of ARPU by mobile Internet ARPU in the PC Internet era, the single-user ARPU of Metaverse is higher than that of mobile Internet. According to the calculation of the game company Century Huatong’s announcement, the ARPPU of the mobile games “Legend of Blood” and “Legend World” of the same IP and the same developer in 18 years was about 1.2 and 2 times that of the corresponding terminal game ARPPU, and an average of about 1.6 times. We assume that due to its high immersion, high user duration, and multiple monetization channels, Metaverse ARPU will be about 1.5 times that of the mobile Internet era.

Metaverse Industry Deep Research Report: The Next Generation of Immersive Internet

1) Mobile social networking: Domestic mobile social networking is becoming mature, and growth space is already limited. Metaverse will bring the next generation of social networking and gradually expand user time. According to CNNIC data, the number of instant messaging users in my country reached 981 million in December 20, accounting for 99.2% of all netizens. The penetration rate has not increased compared to March 20, and the growth of mobile social traffic will remain slow. Internet giants have begun to deploy the next generation of social networking. Facebook’s Horizon was renamed Horizon Worlds in October 21 to create a creator-friendly social space. Yao Xiaoguang, the president of Tencent Tianmei, personally takes charge of Z-plan and uses a 3D fully upgraded version of QQ as the next-generation social Metaverse product.

At present, traditional social products are still strong, and the penetration rate of social Metaverse is very low. We are optimistic that Z-plan will become a breakthrough product from 0 to 1, and the penetration rate is expected to reach 13.5% in 2025. Z-plan is the next-generation social + game product that Tencent Tianmei Studio + QQ team focused on. It has both Tencent’s social product genes and game self-research capabilities. We believe that Z-plan’s product form may be similar to a personal 3D virtual image The fully upgraded version of QQ is optimistic that it can occupy the niche of the next generation of social products through the Metaverse characteristics of higher definition, more immersive and interactive nature.

2) Mobile games: The quantity and quality of game content on mainstream VR game platforms have grown significantly, and games are the best carrier in the early days of Metaverse. According to statistics from, in September 2021, the total number of Steam VR content reached 6051, and the number of Oculus Quest platform applications was 308, a significant increase from the previous month. The VR game “Half-life: Alex” has become a killer product, and has repeatedly ranked third on the Steam game platform weekly sales list. Its large volume and high quality proves that 3A-level VR games have matured. We are optimistic that there will be more applause in the future. The popular 3A VR game comes out.

Metaverse Industry Deep Research Report: The Next Generation of Immersive Internet

We expect that the penetration rate of the domestic gaming universe will reach 25% in 2025, and the domestic field space of the gaming Metaverse is estimated to be RMB 139.7 billion.

1) The overseas VRAR penetration rate is already high, and my country’s VRAR penetration is expected to accelerate.According to Thrive Analytics data, 23% of American adults have owned or used VR headsets; Snap believes that the number of users who have used AR in 2021 is close to 30%; my country’s VR market penetration rate is still at a low level. , It is expected that market penetration will accelerate, driven by the introduction of high-quality overseas VR games. At the same time, we are optimistic about the future domestic user cultivation of Metaverse sandbox games. It is assumed that the penetration rate of domestic Metaverse games (including VR games and Roblox-like sandbox games, etc.) will reach 25% in 2025.

2) The user value of Metaverse is higher than that of traditional games. In Metaverse games, users will be able to create virtual assets such as game maps and game models by themselves, and obtain economic benefits by selling them, which will effectively promote the economic system of the universe. Being active, leading to higher single-user ARPU.

3) According to the Foresight Research Institute, the size of my country’s mobile game market in 2020 is about 209.7 billion yuan, and the 3-year CAGR from 17-20 is 21.8%. Considering that the housing economy has increased the growth rate of mobile games due to the 20-year epidemic, the subsequent growth will slow down. Assuming a 5-year CAGR of 12.2% by 2025, the scale of my country’s mobile game market is estimated to be about 372.5 billion yuan in 2025; 4) According to The Game Working Committee of the Music and Digital Association has 650 million mobile game users in my country in 2020, and the CAGR for the three years from 2017 to 20 is 5.7%. Taking into account the regulatory impacts such as the protection of minors, assuming a 5-year CAGR of 0.6% by 2025, the number of mobile game users in my country is estimated to be 670 million in 2025.

3) Short video and online video: Movie-watching VR has been widely deployed, and Metaverse online video may bring epoch-making changes. According to Huawei’s VR network white paper, the penetration rate of VR viewing is expected to be 3% in 2025. The content production of iQiyi helps Qiyu 3 VR headsets enhance their competitiveness. The immersive 4K high-definition video of Qiyu 3 VR brings a sense of immersion, which is comparable to the IMAX theaters of movie theaters. The viewing potential, assuming that the penetration rate of the domestic Metaverse viewing category can reach 4% in the future.

Short video may also be suitable for the Metaverse content form, and it is expected to be available in consumer-level VRAR products. According to the sensor tower, Facebook Lasso has been online for 4 months, with only nearly 70,000 downloads in the United States, and it went offline in July 20. Facebook lost to Tik Tok in the short video field, and may overtake the car through the VR short video curve. 3-5 years later, VRAR consumer-grade commercial explosions will be rolled out by gradually reducing the price, and the threshold for homemade VRAR content is gradually lowering. Domestic short video leaders Douyin and Kuaishou are also expected to produce short video applications in the form of VRAR. In 2025 The penetration rate may be close to the level of Douyin’s early penetration rate. VRAR content is easier to be immersed, and advertising is more efficient. Short videos are optimistic about the growth point of Metaverse content.

Metaverse Industry Deep Research Report: The Next Generation of Immersive Internet

4) Online e-commerce: Metaverse empowers e-commerce, 3D virtual modeling and virtual trials enhance the shopper experience and facilitate transactions efficiently. Take cosmetics as an example. The effect of cosmetics on each person will be different, and you need to choose the one that suits you from many colors, so if you can try makeup virtual, it will have a much better effect than the model. What the Metaverse can provide.

With reference to the early penetration rate of live broadcast e-commerce, we assume that Metaverse e-commerce can reach a penetration rate of 0.5% in 2025, and estimate that the domestic market space of e-commerce Metaverse is 108 billion yuan.

1) VR shopping has long been tried by mainstream manufacturers such as Alibaba and Amazon, but Metaverse fully empowers live broadcast e-commerce companies and needs to wait for Apple’s AR glasses and Oculus’ new lighter, lower-priced VR all-in-one machine to come out, and get it for 2-3 years Market cultivation. According to arithmetic data, the penetration rate of live e-commerce in 2017 (the second year of live e-commerce development) was 0.5%. We believe that by 2025, the penetration rate of cosmic e-commerce is expected to reach 0.5%.

2) According to the Foresight Research Institute, the scale of my country’s e-commerce market in 2020 will be approximately RMB 8,089.2 billion, and the 3-year CAGR from 2017 to 20 is 20.4%. Considering that the live broadcast e-commerce business in e-commerce is still in a rapid development stage, assuming a 5-year CAGR of 12.2% by 2025, it is estimated that my country’s online e-commerce market will be approximately 14.394.4 billion yuan in 2025; 3) According to iiMedia Consulting, my country in 2020 The number of e-commerce users is 790 million, and the 3-year CAGR from 2017 to 20 is 18.6%. We believe that the base of e-commerce users is already relatively large. Assuming a 5-year CAGR of 4% by 2025, the number of online e-commerce users in my country is estimated to be 960 million in 2025.

5) Online office: There is a clear demand for office Metaverse, waiting for consumer-grade commercial terminals to be released. Take white-collar users as an example. When dealing with a lot of tasks at the same time, they can quickly send and receive information and answer calls through AR glasses. Compared with picking up a mobile phone, they can skip multiple steps and improve a lot of work efficiency. Facebook’s virtual meeting application Horizon Work not only provides virtual meeting scenes and characters, but can also write on virtual whiteboards and conduct virtual presentations. The immersion is much higher than that of 2D meeting applications such as Zoom.

Metaverse Industry Deep Research Report: The Next Generation of Immersive Internet

Under the epidemic, the remote office penetration rate is still only 1%, and Office Metaverse is still a blue ocean. We estimate that the domestic market space of Office Metaverse in 2025 is 2.8 billion yuan.

1) According to the Mob Research Institute, during the 20-year epidemic in my country, the remote office penetration rate was still only 1%, compared with 10%+ in Europe and the United States over the same period. It is in its infancy and has great development prospects. We assume that by 2025, Metaverse’s remote office penetration rate can reach 3%.

2) According to the Foresight Research Institute, my country’s remote office scale will be approximately 46.9 billion yuan in 2021, and the 4-year CAGR for 17-21E is 24.5%. Considering the accelerated rollout of follow-up AR glasses and virtual meetings, assuming a 4-year CAGR of 7.7% by 2025, my country’s remote office market is expected to be about 63 billion yuan in 2025;

3) According to CNNIC, the number of mobile office users in my country will be 350 million in 2020, and 20H2 will increase by 42.5% compared to 20H1. We believe that remote office has real needs, and the number of users is still expanding, but the upper limit of the number of mobile office users should be less than e-commerce, social and other national-level application scenarios. Assuming a 5-year CAGR of 6.2% by 2025, the number of remote office users in my country is expected to be 470 million in 2025.

Deep links of the Metaverse, network effects create huge value

Metcalfe’s law believes that the value of the network shows a non-linear and rapid growth as the number of nodes in the network increases. In the era of videophones, Sarnov’s law states that the value of broadcast media is proportional to the number of users. The more users there are, the greater the value. After entering the Internet era, Metcalfe believes that Sarnov’s law underestimates the value of the network. The value of a many-to-many Internet network should be proportional to the square of the connected nodes in the network, which means that the value of a network increases with the number of nodes. Shows a non-linear high-speed growth. Academic research and historical data have verified the validity of Metcalfe’s law. In 2013, Metcalfe published an article in “IEEE Computer”, using Facebook’s ten-year actual data to prove that its growth trajectory in reality conforms to Metcalfe’s law.

According to Metcalfe’s law, we estimate that by 2025, the network effect value of Metaverse will be approximately RMB 640 billion. After fitting, the formula of Roblox’s quarterly value curve is: operating income = 0.4*DAU2. We assume that in the early days of Metaverse, the network effect is similar to that of Roblox, and the coefficient of Metaverse’s quarterly value curve is also 0.4. Assuming that in 2025, consumer-grade VRAR devices have begun to roll out, social + game applications such as Tencent Z-plan have also been recognized by the market, and Metaverse will gradually become a national-level application. Referring to the last Internet revolution-mobile Internet, according to CNNIC data, my country’s mobile Internet users in 2014 were 560 million. To be conservative, we will give a certain discount to the growth rate and user activity of Metaverse users, assuming 25 years of DAU It is expected to reach 250 million. According to Metcalfe’s formula, the market size of the Metaverse network effect is expected to reach approximately RMB 640 billion by 2025. We interpret this value as the ideal upper limit of the value of the early Metaverse network effects including social, gaming, and VRAR content ecology.

Metaverse Industry Deep Research Report: The Next Generation of Immersive Internet

4. Investment analysis and analysis of key companies in the industry

The Metaverse blueprint is broad and infinite, and its growth and maturity will clarify the path of technological progress, and promote the positive cycle of hardware, services, and content. We believe that regarding the investment opportunities of Metaverse, the grand narrative should not be underestimated in the long run, and the pace of technological progress should not be overestimated in the short run. From steam locomotives to high-speed rails, no technology is perfect when it first came out. The iteration and progress of technology will eventually respond to all the nitpicking and depreciation in the bud. The evolution and synergy of technology is just the prologue of the Metaverse era.

From historical experience, C-side killer application scenarios—games and videos continue to impose stringent and increasing demands on hardware performance; and the increase in hardware computing power will eventually spill over to the field of productivity; we believe that similar logic will be in Repeatedly on the Metaverse. Cloud gaming is currently the most demanding application form for computing power infrastructure, Internet transmission bandwidth and latency. Once cloud gaming opens up all links in the industry chain, the subsequent migration to productivity will be a matter of course.

Metaverse Industry Deep Research Report: The Next Generation of Immersive Internet

1) First, it is necessary to secure the next-generation immersive Internet portal, and the VRAR industry is expected to usher in marginal changes and turning points. Zuckerberg believes that once the VRAR platform crosses the threshold of 10 million people using and purchasing content at the same time, the VRAR content ecosystem will develop by leaps and bounds. Steam VR has approximately 2.05 million monthly livelihoods in 20 years. We believe that with the reduction in the price of VR headsets and the continuous enrichment of VR content, the time node for more than tens of millions of people to use the VRAR content platform at the same time will arrive in about 23 years. At that time, VRAR content may have killer applications such as “PUBG” and “League of Legends”, which will promote the rapid growth of VRAR hardware and content.

2) Without the explosive content of the content industry, there will be no huge demand for the development of the entire industry. As a killer application for C-end users, games bring profits and can support the huge investment required for expansion in other areas such as network and computing power. At the same time, we need to pay attention to companies that have a deep accumulation in the game content industry. Games are the best early carrier of the Metaverse. The prototypes of the Metaverse such as sandbox games and open world games are expected to develop C-end user needs, thereby promoting continuous hardware progress and promoting C The end experience is improved, thereby cultivating a huge user group, and establishing a rich content ecology. The quality of Metaverse games is gradually improved in iterations, opening up the positive cycle of Metaverse content.

3) It is necessary to pay attention to the development of Metaverse infrastructure such as computing power and AI. Strong AI and high computing power are necessary conditions for Metaverse to grow and mature. Metaverse needs strong AI to provide a non-repetitive and freely explored gaming experience, and requires high computing power to support a large number of application innovations of Metaverse. High-performance AI chips that meet the high demand of Metaverse may be the main line of technological development in 5-10 years.

Tencent: The leader of the domestic Metaverse, the new Z-plan of the strong social Metaverse is worth looking forward to

Tencent Metaverse: Social-based, extensive layout

Tencent proposes the next wave of upgrades to the mobile Internet-True Internet. Since its establishment 23 years ago, Tencent’s organizational structure has gone through five stages, roughly divided into PC Internet (1998-2012), Mobile Internet (2012-2021) (Consumer Internet in the first half-Industrial Internet in the second half), and True Internet (2021) -?) Five stages. At the end of 2020, Ma Huateng first proposed the concept of “True Internet” in Tencent’s internal special issue, advocating the development of “combination of virtual and real”, and the boundary between online and offline society will become increasingly blurred.

Tencent is in a leading position in the layout of domestic enterprise Metaverse, with traffic ecology as the core moat.Tencent’s social ecology (WeChat + QQ), games (traditional games such as “Glory of the King”, and cloud game platforms such as Tencent Instant Play), video (Tencent Video), and live broadcast (Huya + Douyu) have formed an internal virtuous circle and iterative The economic system provides users with high-quality and high-volume immersive content.

Tencent’s investment covers all aspects of Metaverse, and its forward-looking layout spans AR hardware development, platforms, Metaverse content and services. Such as Roblox (obtained exclusive agency rights for Roblox China version of “Roblox”), Nreal (AR technology company), Awakin Life (similar to Second Life’s 3D virtual world), spotify (audio streaming service platform), wave (Virtual performance service), discord (network call software and digital distribution platform designed for the game community), soul (social), EPIC games (industry standard game production engine), Vemo era (VR game content provider), Lingxi Technology (open world game maker) etc.

Master the core Unreal Engine of Epic Games, leading the world in virtualization creation

Epic Games was founded in 1991 and currently has three main businesses: self-developed games, game platforms, and game engines. Tencent holds 48.4% of Epic Games and is its largest shareholder. 1) Its game “Fortress Night” is very popular, with more than 350 million registered accounts and 2.5 billion connected friends. 2) Unreal Engine provides support for excellent games around the world, and is also widely used in other industries, such as film and television, architecture, automobiles, and simulation. Epic uses Unreal Engine, Epic Store and Epic Online Services to create an end-to-end digital ecosystem for developers and creators to build, distribute and operate games and other content. In 2012, Tencent purchased 48.4% of Epic Games at a price of US$330 million.

UGC creators can earn income by creating content for many games in “Fortnite”, “Rocket League” and Epic Games Store, which is in line with a prototype of the Metaverse economy. 1) In Fortnite, approved creators will receive 5% of the value of in-game purchases created using their creator code. 2) For games on the Epic Games Store, creators can share referral links on their channels to get rewards for game sales. Each game has a different sales share, but all games have a minimum share of 5%. 3) In “Rocket League”, approved creators will receive 5% of the credits consumed in the game when using their Creator Code.

Roblox: The first stock of Metaverse, users and revenue are still on the rise

From the simulated physics laboratory to the “first unit of the Metaverse”, positive network benefits promote Roblox’s continued growth

Roblox was established in 2004. Its Roblox platform is currently the world’s largest multiplayer online game creation platform. In Q2 of 2021, daily active users have reached 43.2 million. Users can log in to the platform through a variety of channels, such as XBOX, mobile phones, PCs, etc., with the goal of creating a common experience platform for all people.The company focuses on investing in cultivating a community of developers and creators, as well as continuously improving the personnel, technology, and infrastructure required for the Roblox platform.

Development process: From the analog physics laboratory to “the first unit of the Metaverse”. In 1989, the founders David Baszucki and Erik Cassel wrote a 2D simulation physics laboratory; Roblox was founded in 2004 to replicate the inspiration of imagination and creativity displayed in the laboratory on a larger scale. Roblox has successively connected to iOS, Android, and XBOX, serving users all over the world. In 2019, the monthly active users exceeded 100 million. In the same year, it established a joint venture with Tencent to enter the Chinese market. The company was officially listed on the New York Stock Exchange on March 10, 2021, and its share price rose 54%, with a market value of 38.3 billion U.S. dollars.

Three core products support the digital world, and Daily Living and Booking are still on the rise

The Roblox platform consists of three products Roblox Client, Roblox Studio and Roblox Cloud. Roblox Client is an application that allows users to explore the 3D digital world. 1) Users can determine the size and body shape of their characters with the help of the editor, and equip them with costumes, equipment, animations, simulated gestures or expressions, and other accessories on the Avatar market. The way the character is displayed is exactly the same as the configuration in the editor, creating a lasting sense of identity for the character. 2) Users can use Roblox Client to connect with other players in various ways by detecting nearby players to realize social functions.

Metaverse Industry Deep Research Report: The Next Generation of Immersive Internet

Roblox Studio is a tool set that allows developers and creators to create, publish and operate 3D scenes and other content accessible through Roblox Client. From novices to professionals, you can use Roblox Studio to easily create 3D models, render and simulate scenes on the Roblox platform. Once the content is established, it can be copied and shared in multiple scenes. Roblox provides developers with sufficient reference materials, tutorials, community forums and analysis to create their works.

Booking revenue has grown rapidly and hit new highs repeatedly. Roblox mainly earns revenue by selling virtual goods on the platform, namely Booking revenue. Since 20Q2, Booking has grown by more than 150% year-on-year for four consecutive quarters. Among them, 20Q2 Booking revenue exceeded the year-on-year growth rate of 229%, and the month-on-month growth rate reached 98%. The growth rate in 21Q3 slowed to 28%, which may be due to the higher base in 20Q3.

Facebook (Meta): The most determined Metaverse explorer, optimistic about maintaining the leading position of all-in-one VR

From a social media company to Metaverse, Metaverse’s strategic importance is rising

In September 21, Facebook changed its CTO, and the importance of Metaverse continued to rise. Bosworth, the long-term head of Facebook Reality Labs, will succeed Facebook’s CTO. Bosworth joined Facebook in January 2006. He previously led the company’s hardware department and advertising department, and was recently responsible for AR/VR operations. After taking over as CTO, he will continue to be responsible for VR/AR operations, reflecting that Metaverse is becoming Facebook’s most important Concerns.

In October 21, changed its name to META, a determined explorer of the Metaverse. Facebook officially announced at the Facebook Connect conference on October 28 that due to the expansion of Metaverse’s business, it officially changed the name of the group to Meta to highlight the diverse business structure. Mark Zuckerberg reiterated his vision of eventually turning his company into a Metaverse enterprise through the development of AR and VR software, hardware and ecology.Zuckerberg said that in the next five years or so, people’s perception of Facebook will be transformed from a social media company to a metaverse company.

Facebook’s focus is to build a complete user community to help them understand the Metaverse and new platform technologies, such as virtual reality (VR) and augmented reality (AR). In the long run, we believe that Facebook has the opportunity to establish a Metaverse community and virtual economy. The business model of Metaverse does not center on selling hardware devices. On the contrary, Facebook can serve as many users as possible. Its role in Metaverse is to develop basic technical architecture, social platforms and development tools, similar to Apple and Google in the mobile era. .

Metaverse Industry Deep Research Report: The Next Generation of Immersive Internet

Oculus, the leading VR hosting company, leads VR to a phenomenal level

Oculus continues to iterate technology and reduce costs. The birth of Quest marks the entry of Facebook VR into the 2.0 era. Oculus, formerly known as Oculus VR, was founded in 2012. Its main product is VR head-mounted display. In March 2014, Facebook acquired it for US$2 billion in cash and stock. 19 years ago, due to the imperfect underlying technology and application scenarios, and coincided with the rise of smartphones led by Apple, Oculus did not break a blood path. In May 19, Oculus released a new generation of product Quest, which also marked a major shift in Facebook’s VR strategy-a full transformation from a PC platform to a VR all-in-one machine.

The lower price of Oculus Quest 2 facilitates commercial promotion, and the hardware is improved in many ways. Oculus Quest 2 was officially released on September 16, 2020. Compared to the previous generation of Oculus Quest, Quest2 is priced lower and has a larger capacity. The performance of the Quest2 processor has been significantly improved. Equipped with Qualcomm XR2, it is a chip designed for XR devices. Its CPU and GPU performance doubles the Qualcomm 835 used by Quest. The screen picture is clearer, 50% more pixels than Quest. In addition to the 72Hz supported by Quest, the resolution also supports 60Hz and 90hz, and the picture is more delicate. The endurance of Quest2 is similar to that of Quest; without major changes in ergonomics, the weight is reduced by about 12%.

Metaverse Industry Deep Research Report: The Next Generation of Immersive Internet

The most comprehensive Metaverse layout, Facebook is expected to maintain its leading position

Facebook announced in 21M5 that the number of paid users of its Workplace enterprise communication software has now reached 7 million, an increase of 40% from the 5 million in May last year, and has maintained steady growth since 19M2.Workplace is an enterprise software that companies can use as an internal social network to communicate with employees.The service was launched in 2016 and its customers include companies such as Spotify and Starbucks.

“Immersive” “Zoom” opens a new mode of VR office. Workrooms is an important step for Zuckerberg to realize the vision of the Metaverse. It includes a fully functional virtual desktop, avatar gathering, screen sharing, head/gesture tracking, spatial audio processing and other functions. The immersion is much higher than that of 2D Zoom, and Other sensory interactions can be carried out, such as shaking hands with other participants, and the touch is close to the real world.

We are optimistic about the application prospects of Spark AR in shopping and advertising. 1) Advertisers and brands are optimistic about the interactivity of AR advertising. Users scan the AR logo on Facebook with a camera to preview the 3D model of the product, so that consumers can spend more time to understand the details of the product, and can also customize it according to themselves. Personalized products. 2) The visual preview function of AR helps to improve user satisfaction. Users can have a sufficient understanding of product color, texture, style and other details before purchasing. They can also try on shoes, try on clothes, and try on furniture.

NetEase: The game giant cuts into the Metaverse, and the new game goes online to open up room for growth

NetEase Shadowcore: Pioneer of domestic VR content, open up the “last mile” of VR games

NetEase Shadowcore, a pioneer of VR content in a major domestic game maker. NetEase Shadowcore was established in 2018 by NetEase Games investing millions of dollars in a joint venture with Survios, a top VR content developer in the United States, and was spun off from NetEase Games in December 2020. Shadowcore has published a number of VR games developed by NetEase, Survios and other outstanding overseas developers in China, and through localization and operation of these games, it provides Chinese players with high-quality virtual reality game content. Releases include: “Rhythm Space” (Steam VR’s first week revenue exceeds one million US dollars), “Wilderness Lurker” (self-developed by NetEase Viva Studio) and other VR games.

From VR kiosks to e-sports, “NetEase Shadowcore” will create a VR content ecosystem that integrates software and hardware. NetEase Shadowcore has opened up the data system between the various platforms of its published games. Players can use their own VR headsets or use the LBS applet to locate the nearest VR offline site for play and join the competition ranking mechanism. In addition to building an e-sports event system to improve the repurchase of VR content and user participation, Shadowcore also launched a VR self-service machine with an integrated accounting and operation system for the offline market, with low cost, low footprint and unmanned The feature of duty is to lay down offline formats and reduce business operating costs.

NetEase Games: Flagship games contribute stable output, new explosives open up room for growth

NetEase officially established its online game division in 2001. After nearly 20 years of rapid development, NetEase has become one of the seven largest game companies in the world. NetEase currently offers more than 140 mobile and PC games. Including mobile and PC games developed internally by NetEase, as well as games authorized by world-renowned developers. Mobile game revenue mainly comes from the sales of in-game virtual items, which account for 71.9% of NetEase’s 2020 online game service net profit. PC gamers can purchase points to pay for game time, virtual items, and other fee-based services, which can enhance the gaming experience, such as special abilities, clothing, weapons, and other accessories. In the global market, NetEase has published more than 50 mobile games since 2015.

The long-term operation of Ace Games lays a solid foundation, and innovative and explosive models lead the increase. 1) NetEase’s masterpiece “Fantasy Westward Journey” has been successfully operated for more than 17 years since the terminal game public beta in December 2003, and still maintains a stable and high popularity, and has produced “Fantasy Westward Journey 3D”, “Fantasy Westward Journey Pocket Edition”, etc. IP derivative works. According to Qimai data, since October 20, “Fantasy Westward Journey” has fallen out of the top 60 iPhone role-playing lists in only two days.According to sensor tower data, in September 21, the mobile game “Fantasy Westward Journey” ranked No. 3 in ios China in terms of revenue. 2) Since its official launch on September 9, 21, “Harry Potter” has taken advantage of the nationalized IP and has a low threshold The advantages of card strategy gameplay and the exquisite art effects of the magic world quickly occupy the first place on the iPhone free list of Qimai Data, and maintain the popularity for a long time. According to gamma data, the first month of the launch of “Harry Potter” exceeded 1.1 billion yuan in revenue. At the same time, “Harry Potter” has a high degree of internationalization and a wide global coverage, which is expected to become a breakthrough in NetEase’s internationalization strategy.

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