Since the listing of Roblox in 2021 detonated the concept of “Meta Universe”, both the capital market and entrepreneurs’ interest and concern for “Meta Universe” have suddenly increased. A month ago, in an interview with the media, Zuckerberg directly announced that Facebook would become a “metauniverse company” within 5 years. Today, when the mobile Internet user dividend has peaked, the emergence of the “meta universe” concept has allowed people to see the dawn of the “next generation Internet”. As a new economic investment bank that always pays attention to the cutting-edge dynamics of technology, entertainment, consumption and health, Yikai Capital shared with you their understanding and thinking about the meta universe. Just as we first released the outlook for the VR industry in 2015, we believe that although the time will be sooner or later, the time will come, and all the future is worth looking forward to. There are 10,000 Hamlets in the eyes of 10,000 people, and the same is true of the meta-universe today.
Core point of view
1. The meta-universe is neither a parallel world nor a complete virtual world. It is a combination of reality and virtuality. It is a simulation world that exists parallel to the real world, interconnected with each other, and each is wonderful.
In our view, the meta-universe is neither a world completely parallel to the real world, nor a virtual world completely blocked from the real world. The foundation for the existence and development of the metaverse comes from its realization: a more extreme experience of personal entertainment; the improvement of personal efficiency; the improvement of social efficiency.
The virtual world focuses on meeting people’s entertainment experience improvement needs, and the parallel world focuses on meeting people’s efficiency improvement needs. Therefore, we believe that the meta-universe is more like a simulation world that exists parallel to the real world, interconnected with each other, and each is wonderful.
2. The meta universe exists not only online but also offline; in the future, there will be seamless integration and organic connection between online and offline, and the real world and the simulated world.
As a combination of the real world and the virtual world, Metaverse will start online at the beginning, but in the future, it will gradually transform the online and offline world from a partial connection to a comprehensive one by creating various offline immersive experiences. Connected. This ubiquitous sense of immersion will gradually extend from pan-entertainment experiences such as games and social interactions to online and offline integration of various real-life scenarios, maximizing people’s demand for ultimate entertainment experience and efficiency improvement.
3. The meta universe cannot be a monolithic and completely closed universe, nor can it be a completely flat and completely open universe, but an open and closed system coexisting, the big universe and the small universe are nested together, and the small universe has the opportunity to expand and expand. The universe has the opportunity to collide with the integrated universe, just like our real universe.
Just like Apple and Android can coexist, the future meta-universe cannot be a single one, but it is also impossible to have no super players. Super players will maintain a balance between closedness and openness. This balance may be pursued voluntarily, or it may be mandated by international organizations or governments. Therefore, we tend to think that the future meta-universe will be an open and closed system coexisting or even partially connected, the large universe and the small universe are nested with each other, the small universe has the opportunity to expand and expand, and the large universe has the opportunity to collide and integrate, just like ours. The same in the real universe.
4. From the perspective of commercial value, if it must be measured by quantitative indicators, Meta Universe means a larger user scale, longer online usage time, and higher ARPU.
5. The basic constituent elements of the meta universe include user identity and relationship, immersion, real-time and full-time, diversification and economic system, etc. Only when all these elements are satisfied is the meta universe in the true sense; what we see today What is just a meta-universe in the “breastfeeding period”.
The basic elements of the meta-universe include user identity and relationship, immersion, real-time and full-time, diversification and economic system, etc. Only when all these elements are satisfied can a true meta-universe be formed. Obviously, today’s meta-universe players have not fully achieved this, so the meta-universe we see today is only a very rudimentary prototype, a meta-universe in the “breastfeeding period”. Perhaps today’s meta-universe already contains the key to the future meta-universe, but we are still far from the real meta-universe.
6. Meta universe is a system engineering, which can be divided into three levels: data level, interaction level and technology level. Among the above three levels, the data layer and the technology layer will be the first to achieve breakthroughs.
The meta universe is a huge and complex system engineering, the core can be divided into 3 levels:
1. Data layer: people, things, environment
2. Interaction layer: interaction between people (social), interaction between people and things (transaction and economy)
3. Technical layer: all technical scenarios that provide technical support (5G/AI/Internet of Things/cloud/blockchain, etc.)
The evolution of the meta-universe follows the basic laws of social development: people are first created, and relationships between people are created, and then commodity and service transactions based on relationships occur. Finally, self-circulation, strengthening, and Evolution and improvement.
We believe that among the above three levels, the data layer and the technology layer will definitely be the first to achieve breakthroughs. The development path of the data layer can be realized based on a single element, such as the digital on-chain of assets, Metahuman, and immersive movie viewing. The technology layer is cross-periodical and highly adaptable. No matter how the content end changes, the underlying technology can be applied to different scenarios. The requirements of the interaction layer are the highest, requiring a lot of content iteration, user relationship import, and asset collaboration. But only when the layout and breakthrough of the interactive layer are realized, will they move towards the true meta-universe. This is why everyone says Roblox is currently the closest form to the meta universe.
7. In the short term, the breakthrough point for Metaverse is gaming, social networking and immersive content; therefore, the company that has the most chance of getting the first ticket for Metaverse in China is Tencent , followed by Bytedance and iQiyi.
In the Internet and mobile Internet era, the top companies are the first to occupy one of the most core needs of users (such as information, social networking, entertainment, shopping, etc.), and then gradually expand their reach through the advantages of traffic to form an ecosystem. We believe that Metaverse will follow the same logic and must start with meeting the core needs of users. Among them, the most closely related to Metaverse 1.0 is the user’s entertainment and social needs, because only the immersion of Metaverse in these two areas will bring a more significant user experience improvement.
Therefore, we tend to think that the first two or three tickets of Metaverse will be shared by major manufacturers because they have mastered enough user scale and user duration. In our opinion, the company that has the most chance of getting the first ticket to Yuan Universe in China is Tencent, which has firmly established itself in the three immersive areas of gaming, social networking and long video content. In addition, iQiyi, which owns the bytebeat of short video content and live broadcast resources, has a large number of immersive content copyrights and certain VR content production capabilities, also has a considerable opportunity to compete for the second ticket to the meta universe. At the same time, we I also believe that other giants such as Ali and Station B will not stand idly by when faced with the call of the meta universe.
8. The starting point of the meta universe is not the platform, but the content. Metaverse needs to start with content and move from content to platform, instead of starting to build a platform as soon as it comes up. Therefore, Metaverse may become a booster to save and activate China’s entertainment content industry in the “post-epidemic era”.
In our view, the starting point of the meta universe is not a platform, but a content that can be independent, self-iterative, and multi-dimensional to attract users to participate in the experience and even participate in the creation. To build a meta-universe, you need to start with content, from content to platform, and expand the small universe into a large universe, instead of pulling up the platform and trying to create a boundless universe out of thin air.
Therefore, Metaverse is the gospel of content creators, the gospel of content industry, and the gospel of imagination and creativity. If there is anything that may become a boost to save and activate China’s entertainment content industry in the “post-epidemic era”, it may only be Metaverse today.
9. In the long run, the core of Metaverse lies in the formation of diversification and economic system.
Although Metaverse can be born and started from content and social networking in the short term, its long-term growth and maturity must rely on diversified development and the formation of an economic system. The future metaverse is not just a place where users get better entertainment and life experience, it must also be a platform for creating value, realizing value and sharing value.
10. The end result of the future is far more complicated than we thought. The biggest risk of uncertainty lies in government supervision and legal civilization. The ideal meta universe should be an open and interoperable platform at the bottom, without borders, without borders, and not belonging to any single company, but the road to the end is obviously long.
Although the governments of many countries today have a very rudimentary understanding of the metaverse, it is foreseeable that with the development of metaverse, a series of problems and challenges related to the country, society, rule of law, and civilization will surely arise in the future. When regulators raise problems, they will also have to face their own development problems because of their responses. In this process, relevant laws and regulations will be gradually improved, governments of various countries will gradually improve their regulatory capabilities, international cooperation and coordination will gradually be strengthened, and the responsibilities and rights of regulators, platform providers, value creators and users will gradually increase. Clear. This process of collision and game between the meta-universe and the real world is also the process of the meta-universe’s growth and maturity.
As early as 1992, science fiction writer Neal Stephenson’s “Avalanche” created and described the meta universe for the first time. Before the arrival of the mobile Internet, it predicted various human activities in the meta universe in the future. Then, “The Matrix” in 1999 and “Number One Player” in 2018 brought people’s interpretation and imagination of the metaverse onto the big screen.
In 2020, the arrival of the epidemic will bring about many changes in people’s lives. Travis Scott held an online concert in “Fortnite”, and 12 million people were online at the peak at the same time; UC Berkely held an online graduation ceremony in “Minecraft”; Facebook-operated VR social platform Horizon set off a boom; 2020 The ACAI Technology Conference in the United States was chosen to be held in the “Animal Crossing Friends Club” in 2021; in March 2021, the first Roblox stock of Meta Universe was successfully listed on the New York Stock Exchange.
Metaverse in English is Metaverse, in which Meta is “advanced” and has the meaning of deconstruction and reshaping, while Verse evolved from the word Universe. Metaverse embodies human beings’ exploration of the essence of things and the origin of the universe, and the pursuit of an idealized world.
In fact, meta-universe has always existed on the Internet. In the era of 2D content, QQ users will think that QQ Show is meta-universe, anime fans think “Sword Art Online” is meta-universe, and game players think “Dreams” is meta-universe. These scenes are basically satisfied. Human demand for the “virtual world” during the corresponding period. Entering the 3D era, the current existence of Metaverse is basically similar to the development status of consumer VR/AR, focusing on entertainment and games, and will continue to explore and develop other vertical industries in the future. At present, the exact definition of the meta-universe concept is still being actively discussed by all parties.
Learn from “Meta Universe, a New Era of Cyberspace” by Guosen Securities Economic Research Institute
Eight Questions about the Metaverse
Why is Metaverse attracting attention today?
The increase in attention to Metaverse is based on people’s demand for entertainment experience and production and life efficiency improvement on the one hand, and on the other hand, the achievable degree of including 5G, AI, blockchain technology and VR/AR display technology is getting higher and higher. . The 2020 epidemic is undoubtedly an accelerator. People’s life scenes are shifting more from offline to online. This “forced” transformation has instead made everyone think, discuss and pay more attention to the embryonic form of the future meta-universe. .
Throughout the development of information technology and media in the past, mankind has continuously changed the way of cognition of the world, and even later, began to consciously transform and reshape the world. From the era of newspapers, radio and television to the Internet era, and the mobile Internet era, the tools and platforms under the concept of meta universe are becoming more complete, and the steps leading to meta universe are gradually clear. Since 2020, major Internet companies from all over the world have developed a close layout around cutting-edge technologies such as VR/AR, cloud technology, and blockchain, and the door to the ultimate closed-loop ecosystem of the meta-universe is opening little by little.
What is the nature of the meta universe?
With reference to the real world, we can summarize the five elements that constitute the meta-universe: human (productivity), human relations (production relations), social production materials (materials), economic (transaction system) and legal relations, and environmental and technological ecosystems. The meta-universe is the full transformation and construction of these five elements, and finally forms an existence that can mirror reality, is independent of reality, and can return to the essence of the universe. Meta universe will be built by different companies and organizations that cross national borders and borders, and establish a simulated world with interoperability and portability based on open principles. The meta-universe is both connected and independent, both virtual and realistic. This charm has aroused people’s closer attention and exploration.
What are the characteristics of the meta universe?
All parties have different views, but there are certain commonalities. For example, Facebook believes that “Meta Universe is a vision that spans many companies and covers the entire industry. It can be seen as an upgraded version of the mobile Internet that allows people to participate in the Internet more naturally.” The well-known investor Matthew Ball believes that “there is one in Meta Universe. In the always-on real-time world, an unlimited number of people can participate in it at the same time. In the end, there will be a fully functioning economy that spans the physical and digital world.”
Through combing and analysis, we have concluded the following five characteristics. The ultimate form of the meta-universe needs to fully satisfy the following five characteristics:
1. Virtual identity (every person in the real world will have one or more meta-universe IDs and be responsible for them)
2. Social relations (the real-life social relations between each meta universe ID will be generated)
3. The ultimate sense of presence (low latency and immersion to ensure that people in the real world have sufficient “sense of presence”)
4. Extreme openness (people in the real world can enter at any place and any time, and enjoy massive content after entering)
5. A complete economic and legal system (guarantee of the security and stability of the entire meta-universe, and the continuation of the civilization derived from the meta-universe)
What are the underlying driving factors of the meta universe?
Human pursuit of the essence of the world is an eternal theme. The evolution of technology and the upgrading of human needs alternately move forward: whether the demand side is strong and whether it continues to exist, corresponding to whether the solutions provided by the supply side and the ecology are sufficiently prosperous, determine whether the industry can be upgraded, new production, life and entertainment Whether the method has the possibility of continuous breakthrough.
On the supply side: technological conditions are becoming increasingly mature, and industrial policies are steadily supported. The leading deployment of 5G base stations, the National Informatization Development Strategy Outline, and the implementation of blockchain application methods in various provinces, cities, and cities all reflect the rapid development of cloud computing, 5G, blockchain, and VRAR technologies. Meta Universe prepares for the underlying infrastructure.
Demand side: entertainment and social methods usher in new breakthroughs. At the same time, generations change. Generation Z attaches importance to spiritual entertainment consumption and has formed the habit of online office, study and entertainment with the catalysis of the epidemic.
What is the future development path of Metaverse?
Looking forward at this point in time, we roughly look at the future development of the meta-universe with a period of 10 years. We believe that there will be several key stages.
The first stage is nearly 10 years. The concept of meta universe will still focus on social, games, content and other entertainment fields. Among them, immersive content experience is one of the most important forms of this stage, and it will bring a more significant user experience. promote. The software tools are based on the UGC platform ecology and the social platform that can build a virtual network. The underlying hardware support is still inseparable from the mobile devices that have become popular today. At the same time, VR/AR and other technologies are gradually mature and are expected to become a new entertainment life. a.
The second stage will take place around 2030, and the penetration of Metaverse will mainly occur in areas that can improve the efficiency of production and life. Based on VR/AR and other display technologies and cloud technologies, a smart city guided by the True Internet, a closed-loop virtual consumption system has gradually formed, a virtualized service form formed by organic online and offline connections, and a more mature digital asset financial ecosystem It will form an important part of the meta-universe.
The third stage, the final formation of the meta universe, may be in 2050. This is actually an open-ended proposition. Although various cutting-edge technologies are accelerating, and the pace of upgrading of human needs is accelerating, which has accelerated the progress of the metaverse to a certain extent, there are still many uncertainties. Just like us at the end of the 20th century, we would not imagine that 30 years from now, one mobile phone, paperless office, open social networking and digital shopping have been realized today.
Learn from Tianfeng Securities’ article “Metaverse First Share_Metaverse Leader”
What is the ultimate form of the meta universe?
We judge that the ultimate form of the meta universe will be a perfect fusion of openness and closedness. Just like Apple and Android can coexist, the future meta-universe cannot be a single one, but it is also impossible to have no super players. Super players will maintain a balance between closedness and openness. This balance may be pursued voluntarily, or it may be mandated by international organizations or governments.
Therefore, we tend to think that the future meta-universe will be an open and closed system coexisting or even partially connected, the large universe and the small universe are nested with each other, the small universe has the opportunity to expand and expand, and the large universe has the opportunity to collide and integrate, just like ours. The same in the real universe. The final meta universe will be composed of multiple metauniverses of different styles and fields to form a larger metauniverse. The identity and assets of users are originally synchronized across the metauniverse, and people’s lifestyles, production models, and organizational governance methods will all be reconstructed.
This full version of Meta Universe will carry greater merchant value. As far as the Chinese market is concerned, there may be new super players, and at the same time new start-up companies will emerge in the subdivision field and flourish.
Is Meta Universe an opportunity for major manufacturers or an overtaking curve for new players?
Before the meta-universe concept broke the circle, Dachang began active deployment of related upstream and downstream industries:
Facebook: After acquiring the VR headset Oculus in 2014, it has continuously improved the technical details, product experience and content richness. It is currently the world’s largest VR headset brand with the highest market share, and continues to lead the VR consumer-grade equipment industry. It was released in 2015. Spaces, the first VR social application, has now been closed, replacing the more refined, smoother, and more immersive Horizon released in 2019: an ever-expanding virtual universe designed and created by the entire community. Zuckerberg has announced that Facebook will become a meta-universe company, connecting all virtual, enhanced, and mixed entertainment content, business life and other application scenarios.
NVIDIA: By virtue of its technological advantages, the company will become the builder of the underlying architecture of Meta Universe. Omniverse will be released in 2020: a digital collaborative creation and digital twin platform, with a highly realistic physical simulation engine and high-performance rendering capabilities, supporting multiple people to co-create content on the platform, and being highly compatible with the real world.
Tencent: As the leader of domestic manufacturers in the meta-universe layout, they are working on infrastructure and C-side at the same time. In 2020, Tencent Cloud will launch the underlying smart city platform, marking Tencent’s entry into the era of true Internet. In addition, the company has invested in a number of key areas that make up Meta Universe, and the new round of personnel changes shows that Tencent will start with social media to develop the Meta Universe ecosystem.
Epic: As the developer of the Unreal series engine and the leader of CG technology, in April 2021 announced the completion of a huge $1 billion financing to build the meta universe.
In addition to the existing big factories, start-ups are also waiting for opportunities, hoping to break through in subdivisions by seizing the opportunity. At present, we have paid attention to the continuous emergence of new players in games, immersive content, VRAR, Metahuman and other fields.
We judge that Dachang will be even better in the meta-universe competition with its rich family properties. In our opinion, the company that has the most chance of getting the first ticket to Yuan Universe in China is Tencent, which has firmly established itself in the three immersive areas of gaming, social networking and long video content. In addition, iQiyi, which owns the bytebeat of short video content and live broadcast resources, has a large number of immersive content copyrights and certain VR content production capabilities, also has a considerable opportunity to compete for the second ticket to the meta universe. At the same time, we I also believe that other giants such as Ali and Station B will not stand idly by when faced with the call of the meta universe.
What are the subdivision tracks in the meta universe that can be focused on?
From the perspective of recent investment or deployment, Meta Universe is still a concept, but both major manufacturers and startups have already begun active exploration and deployment. In terms of subdivisions:
Games: I am more optimistic about the long-term value of game engines, but it is the good content itself that will detonate the platform in the short term. The success of Oculus has proved the importance of content in hardware changes; however, there is a paradox in the development of domestic games, that is, Metaverse naturally needs UGC content to maintain the ecology, but the country obviously lacks UGC content genes, so the future will be based on AI energy. A platform that creates high-quality content in batches is also a subject worthy of attention.
VR/AR: The core barrier of hardware manufacturers lies in interactive algorithms + engineering capabilities, but they currently lack content genes and need to continue to invest in content output. They are more optimistic about the Oculus model. Based on certain hardware capabilities, relying on large manufacturers’ content and capital to help quickly achieve an explosion increase. At the same time, immersive experience content based on VR technology will also grow rapidly.
Metahuman: The establishment of character identity is the first asset of the meta universe, and it may be closer to commercialization.
Social: It is difficult to have new big DAU products in a short time. Excellent social products should have the three capabilities of relationship establishment, precipitation, and transformation. The current internal logic of social interaction is still to gather enough users to form a platform effect through interest or content. New products must also be based on the interests of new people. Provides a differentiated way of interaction.
Long-term optimistic about the underlying technology companies based on the above forms.
Analysis of the meta-universe subdivision track
Core point of view:
1. The game is the first meta-universe scene to grow up. Virtual social identity, openness, economic system, immersion, and sustainability of the world are the five characteristics of meta-universe games that need to be paid attention to.
2. Meta-universe games are still games. At this stage, the main players participating in meta-universe games are game enthusiasts. The new concept still needs the support of good game products. Team experience and technical ability are the core points of investigating meta-universe games.
3. The structure of the meta universe should be diverse. Most meta-universe games in China are Roblox’s followers. Meta-universe games give the player the mastery of creation, that is, the player produces maps and rules, and the architecture itself is king. This is the same as the “Warcraft 3” map 20 years ago. The editors are not much different.
4. The long-term development value of the game engine category is greater, but the good content itself must be detonated in the short term. The core advantage of Roblox is its open player creation mechanism, which in turn realizes a closed-loop ecology. At present, there is no obvious Roblox-like platform with high-quality large-scale UGC content in China. In China, in the past various entertainment forms, there is no large-scale platform for UGC content, but the core of the meta universe requires a large amount of content precipitation, so AI-based content creation will be a direction to solve this bottleneck.
5. With the development and penetration of the meta-universe concept, the degree of integration between games, social networking, and VR content will become higher and higher.
At present, the boundaries and definitions of meta-universe games are still vague in the market. Judging from the user data of Roblox, the first stock of Metaverse, DAU in 2021Q1 has reached 42 million, which has nearly doubled in the past year. The average number of online users of VRChat on Steam, which has become a big hit recently, is also nearly 200,000. In addition, blockchain games that are closer to the concept of meta-universe, the amount of financing will reach the peak level in the past year in 2021H1 alone, and it is expected that the blockchain game market will increase significantly this year.
Roblox is the game-type meta-universe project with the largest market share, with 7 million map creators, and is currently the closest game to the meta-universe concept (the user interface is shown above). The advantage lies in the rich content ecology, rich creative incentives, various playable themes, and the room can accommodate a large number of players so that it is highly social. However, the Chinese version of Robles has not yet launched the voice communication function, and social aspects are limited. Roblox’s million-level creators realized the closed loop of the game content ecology for the first time, almost completely abandoning the PGC model, which is unimaginable by traditional game manufacturers. To achieve its closed-loop feature, Roblox did three things right:
1. Stable economic system and excellent creator incentive mechanism: Roblox has a stable economic system based on Robux currency, covering content creation and consumption. Nearly a quarter of Robux recharged by players on the map will become creators’ income, which greatly motivates users to transform from ordinary players into creators’ enthusiasm.
2. Low data volume reduces the hardware performance threshold and cloud gaming bandwidth threshold: Roblox’s simple screen ensures that the data transmission volume and hardware computing power are friendly. In this mode, the load carried by the user equipment is lighter, and the hardware standard of the game is reduced. Decrease, increase the number of potential players in the game. With the advent of 5G networks and the advancement of audio and video technologies, game creation platforms have begun to transition to the cloud game model, and traditional game distribution platforms have gradually become the role of software stores.
3. Roblox Studio lowers the entry barrier for creation: Roblox tries to simplify the developer editor (the developer interface is shown in the figure below). For a teenager, its no-code development mode can be used in 20 minutes, while enhancing the educational attributes.
Even if Roblox achieves industry leadership in many aspects, it is still not necessarily the so-called meta universe. Roblox is essentially just a UGC game platform, which has not yet fully met the conditions of immersion and virtual social identity of the meta-universe. In addition, Roblox’s UGC gameplay is not necessarily suitable for the Chinese market. The main reasons include the lack of UGC platform growth genes in the Chinese market and the low willingness of users to pay for content, so UGC’s profit prospects are uncertain. Therefore, we believe that in the short term, creating a large amount of consumable content based on AI is an important part of game development.
VR / AR
Core point of view:
1. Virtual reality technology is the bridge connecting the meta-universe and the real world, and is the key to the realization of the meta-universe immersive system, and the journey of brain-computer interfaces to replace VR devices is still very long. Therefore, VR is more likely to become the 1.0 form of the meta-universe hardware carrier.
2. The key word of VR is “entertainment experience”, and AR is “efficiency improvement”. From the perspective of the outbreak cycle, VR will explode earlier than AR, because entertainment naturally has the attributes of rapid promotion and can quickly reach more people.
3. The accumulation of VR technology has reached a foundation that can be applied on a large scale. At present, the core components mainly rely on mature manufacturers, and the differentiation is not high. The core competitiveness of hardware lies in interactive algorithms + engineering capabilities.
4. VR hardware devices have a typical smart hardware development path, focusing on game scenarios in the short term, and closer to smart phones in the long term. The core mechanism driving the growth of the entire VR industry in the future will be the content ecology.
5. VR and Metaverse are naturally related. Header content will increase the market penetration rate of 2C stand-alone products. In the short term, offline VR experience stores will still be the most direct path for ordinary consumers to accept VR experience.
Consumer-grade VR equipment will be the user’s gateway to the meta-universe, just like the movie “Number One Player”, wearing a headset will enter another world, and AR, MR equipment and technology will be the most efficient tools to build the meta-universe scene. In 2020, global VR headset shipments have reached 6.7 million units, a year-on-year growth rate of over 70%. According to IDC’s forecast, shipments will reach 15 million units in 2022. Mark Zuckerberg said that the market turning point of “smart hardware reaching 10 million units” is about to come.
The lack of VR/AR content is currently the biggest constraint on the industry. As more game manufacturers turn to VR content production, the market coverage of hardware devices will show exponential growth. We judge that the hardware-content industry growth flywheel drives industry growth, and the core element includes cost performance. Looking back at Oculus’s success in 2020, the extremely high price/performance ratio is the primary reason for the fire in the VR consumer equipment industry. With the massive increase in demand for VR content in the market, hardware vendors will also accelerate the construction of the content ecosystem.
Oculus Quest2 is an all-in-one mobile VR device launched by Facebook in October 2020, and currently has the largest market share in the world. In terms of hardware, cost-effectiveness, wearing comfort and noise problems have been well solved, and it has a fairly rich content ecology. Its exclusive VR game Asgard’s Fury and Orphans are all close to 3A quality. The quality of the game content on the Oculus platform is even expected to surpass that of V’s “Half-Life: Alyx”.
Top players in the domestic VR hardware market have emerged. Top players include Pico, iQiyi VR, Da Peng, etc. Players who can take the lead in building a complete content ecosystem in the future are expected to break through and achieve rapid growth.
Core point of view:
1. The character ID is the first asset of the meta universe, so Metahuman is the guarantee for realizing the virtual identity and immersion of users in the meta universe. There is no absolute technical threshold in this field, and there are rich business scenarios. At present, the profit model of high-fidelity digital people has completed the preliminary commercial closed loop through social account operation and traffic monetization.
2. Metahuman provides more inspiration and impression propaganda for the establishment of the meta universe. In the later stage of the meta-universe deployment, the integration of Metahuman and AI technology will be more obvious, and it will provide a more immersive virtual social identity.
3. At this stage, Metahuman is still serving social platforms such as Internet celebrities and star chasers. In the future, Metahuman’s breakthrough point will lie in brand cooperation, celebrity cooperation, and online original drama series, which will break the flow of traffic.
4. Virtual idols and digital people have natural IP security advantages. Compared with artists who frequently “collapse”, virtual characters run by teams will never be afraid of overturning as idols. Compared with traditional idols, Metahuman’s core competitiveness lies in its purely market-oriented human design, which perfectly fits various business scenarios in theory, but it still needs to wait for consumer education in the market.
According to iResearch Consulting, the size of the virtual idol market in 2021 may exceed 100 billion. Miku Hatsune Miku (below left) is a representative of the first generation of virtual idols. As the predecessor of high-fidelity digital humans, the virtual humans of this period only had simple modeling and could not be regarded as realistic movements and materials, and were mainly characterized by synthetic sounds. Moreover, Hatsune Miku can almost only adapt to online scenes, and offline is limited to performance scenes such as stages, concerts, and comic exhibitions. With the improvement of technical level, virtual characters have gradually separated from the two-dimensional field and moved offline. The concept upgrade from virtual idols to Metahuman began in 2015. Virtual characters have moved towards high fidelity, and the trend of publicity focusing on offline scenes is also increasing. The more obvious, Jiyuanmei is the representative figure of this stage. In the short film and pictures of its promotion, the main character and the fusion of the real scene. Thanks to the advancement of motion capture technology, the real-time interactivity of virtual idols has now been significantly improved, and its monetization methods have also expanded from virtual performances to live show and game live broadcasts. One of the most popular virtual anchors on station B, “Leng Yuan” has With more than 3 million followers, A-Soul, a virtual idol group under Lehua Entertainment, has more than 4 million fans on the entire network.
Epic’s Metahuman Creator is a cloud-based application that can help anyone create a photo-realistic digital human Metahuman within a few minutes. It can be used to make animations in Unreal Engine projects, almost completely replicating a real life Human appearance. High-fidelity digital people have a wider business scene, opening their own social accounts, playing kings with teammates, riding bicycles to the streets, visiting trendy brand stores, etc., and even real social networking. Miquela from California broke up with her boyfriend at the time in 19 years. Education in the domestic market has just started. When AYAYI first appeared, many fans thought it was a real person. After knowing the “real body” of her avatar, the traffic of her social accounts declined. The domestic Metahuman market has yet to mature, and because it completely relies on human settings to serve business scenarios, the market has higher requirements for the IP operation capabilities of virtual human teams.
Core point of view:
1. Social products under the concept of meta universe pay the most attention to the establishment of virtual identities and social relationships. At this stage, it is still difficult to bring a sense of identity offline.
2. The key point to quickly open up the social relationship chain and improve social efficiency is to establish a platform with a large enough user base. Therefore, the opportunities in the social field of Metaverse are concentrated in large factories.
3. Interest-Based Social (Interest-Based Social), Many-to-Many (Many-to-Many) and Virtual Dating (Avatar) are the innovations of Metaverse’s social products.
4. Meta universe social products are more of refurbishing the functions and gameplay of previous products, or carrying out a certain degree of micro-innovation or partial innovation, and there is no essential change.
Social under the current meta-universe concept can be divided into three types of modes:
1. Many-to-many links are used to match and establish relationships between small groups by increasing the number of members of the smallest social unit or teaming, with more than 1 person as the most basic social unit. The innovations of Clubhouse, Zoom, and Discord are more based on quantitative changes (capacity) rather than qualitative changes in technological progress.
2. Interest social activities are mainly carried out between semi-acquaintances or strangers in the unit of fun circle. For example, different themed rooms in VRChat, road shops and interest tags in Soul are all mediums of signal transmission between non-acquaintances.
3. Virtual dating uses VR/AR to generate virtual images to create virtual characters and simulated stars (simulated images and voices). The software represented by VRChat can import and share player-made personal avatars (Avatar), so it is favored by ACG enthusiasts. Widely acclaimed, the most popular avatars are often related to famous animation and game IP. The virtual dating software represented by “Baby” relies on a wealth of clothing and accessories to attract young people who love to wear and develop characters. At present, the application of digital people in the social field still has a certain distance from the new user immersion experience (high technical threshold and insufficient hardware capacity), and large-scale commercialization has not yet been achieved.
Core point of view:
1. NFT and Defi are the main applications of blockchain in the meta-universe world, and both can effectively support the economic system of the meta-universe. Represented by Tencent’s “Magic Core”, domestic NFT projects have emerged, but their functions are relatively conservative. In the field of digital collectibles and games, the market size of NFT is limitless, and the total market value of global encrypted assets has exceeded 2 trillion US dollars.
2. The Defi market continues to be sluggish, but due to the natural encryption properties of the blockchain, there is still a long-term development trend.
Blockchain is the underlying protocol that supports the ultimate form of the meta universe, and NFT encrypts assets with unique value (non-homogeneous value) and endorses it with blockchain technology to make it 100% non-counterfeit or pirated, thereby ensuring digital The safety of artwork. The only factor that affects the price of an asset that is made into an NFT is the relationship between supply and demand in the market. Defi is built on the blockchain and can be combined like Lego blocks. Use blockchain technology to replace all “intermediary” roles in traditional financial services with codes, so as to maximize the efficiency of financial services and minimize the cost.
The scale of the NFT market is limitless, and the pan-digitalization of the real world has begun to take shape. The OpenSea platform received continuous large-scale financing in 2021. The CryptoKitties platform gave birth to Dragon, the most expensive crypto cat in history, with a transaction price of approximately US$170,000.
In the NFT art world Cryptovoxels , the encrypted land is almost sold out. The project is favored by crypto artists. By creating a gallery, users can directly purchase the displayed NFT works. Every crypto artist hopes that his work can be better displayed, so the location of the gallery is very important, and these lands themselves are also NFTs.
In addition, the domestic NFT project “Magic Core” initiated by Tencent, currently encrypted and released the “Thirteen Invitation Quotations Records” collection, and Alibaba has also launched a trading market dedicated to NFT art, which has already displayed many NFTs. , Such as the Star Wars illustration and the painting of the West Pearl Tower. Although the two do not meet the attributes of decentralization and secondary transactions, and only provide collection value, they can be regarded as active attempts by major domestic manufacturers in the direction of NFT.
Due to the volatility of the cryptocurrency market and policy influences, the current total lock-up volume of the Defi project is stable at about 1 billion US dollars. Based on the liquidity conversion and smart contracts realized by blockchain technology, the meta-universe economic system will be more efficiently empowered in the future. In the mid-to-long term stage of the meta-universe development, much will be done.
Author | Ma Gangyi, Lu Mengxuan, Liu Huanyu
Editor | Peng Xiaoyi
13603 words in the text | Estimated reading time 35 minutes
Appendix 1: Comparison of related games & social software experience
Appendix 2: Main reference materials
1.‘The Metaverse primer’ — MatthewBal.vc
2. A Framework for the Metaverse — MatthewBal.vc
3. The Metaverse：What It Is, Where to Find it, Who Will Build It, and Fortnite — MatthewBal.vc
4. Fortnite Is the Future, but Probably Not for The Reasons You Think — MatthewBal.vc
5. 2020 Meta universe in-depth research report — Huaan Securities
6. Meta universe, a new era of cyberspace-in-depth research report on media and Internet-Guosen Securities
7. Meta Universe, the next stop of the Internet — Guosheng Securities
8. Metaverse Metaverse, the Ark of Game Department Leading to Virtual Reality — Tianfeng Securities
9. Tech giants content hard technology new battle, Tencent NetEase byte bets on the future — competition
10. Metaverse development conjecture: starting from social, finally digital immortality — Fengrui Research Institute
11. The market value exceeds 40 billion U.S. dollars! The hottest [Meta Universe] in 2021 will let the Internet come to an end? — New Wisdom
12. NFT: When Art Meets Blockchain — Southern People Weekly
13. About Metaverse, Everything I Know — Internet Weird Thieves Group
14. Define your world: how to understand Metaverse/True Internet? — 5Y View
15. The much-discussed Metaverse, the neglected status quo, big opportunities and hidden worries — The Catcher
16. Talk about NFT and Metaverse as I understand — Vincent222
17. VR shines into reality: Metaverse-Tiger Sniff
18. Social: Will there be any explosions this year? — Venture Capital Stop View House
19. After Tencent, Sony came, and the NFT market continues to boom — Music Finance
20. ChinaJoy: Metaverse is very hot and far away — Qingting.com
21. The meta-universe will fall into a low tide after the big boom, and the virtual and real Internet will be more accurate, and it will be fully popular until around 2030—Artificial Intelligence Scientist
22. Next World Culture has completed a series of millions of dollars in financing, and “virtual people” enter the 2.0 era? — Diaojiao Yutou
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