The Metaverse, which has been neglected by Europe and the United States for a year, has the future in China?

It has been nearly a year since the concept of the Metaverse was thrown out. Generally speaking, during this year, the noise about the Metaverse is getting weaker and weaker:

Europe is eager to catch up with this wave, but the lack of technology accumulation limits the use of imagination; the United States still seems to have only one big company, Meta, continuing to invest, and other big companies always avoid this topic intentionally or not.

The Metaverse, which has been neglected by Europe and the United States for a year, has the future in China?

📸️ © Bing

In contrast, in China, from virtual idols, virtual spaces to digital collections, it seems that all categories of the Metaverse are thriving.

However, the differences in the policy environment are also affecting the development direction of the Metaverse in various regions-the concept has been born for a year, where is the future of the Metaverse?

01 Europe, it is difficult to really enter the game

In the age of the mobile internet, European companies are less present than ever, but as the Metaverse comes, European companies, investors and talent are all vying for tickets to the virtual world – even political heavyweights are taking action – or At least make a statement.

French President Emmanuel Macron has made it clear that he wants to create a “European Metaverse” to challenge American and Chinese tech giants, while European Union digital chief Margrethe Vestager is considering new antitrust regulations.

The Metaverse, which has been neglected by Europe and the United States for a year, has the future in China?

But their ambitions are still a long way from being realized, says Rolf Illenburg, co-founder of VRdirect in Munich:

The reality is that in the future of the entire virtual world, there are no big tech companies associated with Europe, and the Metaverse is currently defined by American and Asian companies.

This is indeed the case – in the US, tech giants such as Meta, Microsoft, and Apple will star, while Roblox and Decentraland are already popular primitive Metaverse platforms.

In Asia, ByteDance, owner of VR hardware giant Pico, is also a strong contender, with companies such as Huawei, Tencent, Baidu, and Alibaba also joining the fray.

The Metaverse, which has been neglected by Europe and the United States for a year, has the future in China?

📸️ Among the top 20 tech companies by market capitalization, the only European representative is Dutch semiconductor giant ASML © Bing

The European Metaverse, by contrast, is largely built on operators and startups — such as Finnish company Varjo, which makes high-end headphones, and Ready Player Me in Estonia.

The latter, a cross-game avatar platform, recently raised $56 million in a funding round led by venture capital giant Andreessen Horowitz.

But the European Metaverse has a long way to go, said Jake Stott, CEO of Web3 and Metaverse advertising agency Hype:

European startups have historically lagged their U.S. and Asian counterparts in producing unicorns, as well as Europe in terms of venture capital raised.

We’re not short of talent, that’s for sure, if you look at the history of mergers and acquisitions, a lot of the people that American companies have taken in are people from Europe… The big question is how do you keep those people in Europe?

The Metaverse, which has been neglected by Europe and the United States for a year, has the future in China?

📸️Rajahalme (right) was the Managing Director of Nordic XR Startups Fund © Bing

Talent tends to go to regions with the best pay and incentives—for example, Finland offers free and high-quality education, but the salaries offered after graduation are not comparable to Silicon Valley.

EU aid funding can provide some extended support, but applying for them is time-consuming and funding is limited, so U.S. resources can only be challenged if European investors work together.

Well-known investor Rajahalme said:

As VCs, we should be very cooperative within Europe, sharing knowledge, deal flow and insight – while also helping at the grassroots level, it’s a big wave, but it’s just beginning, we have to get more and more people get involved.

Rajahalme has been investing in this wave since 2016, but he also admits that the Metaverse only crept into the mainstream after Facebook changed its name to Meta.

But Europe’s hesitation doesn’t seem to have much impact, because the United States, which has always been the object of its comparison, is not optimistic about the development of the current Metaverse.

02 In the United States, enthusiasm is gradually declining

As Meta grapples with its first-ever quarterly sales decline, another question about the development of the U.S. Metaverse is starting to emerge: Jobs in the Metaverse are disappearing.

Less than a few months after Facebook changed its name last fall, the number of new monthly job openings titled “Metaverse” began to decline across all industries — and even dropped by 81 between April and June this year, according to Revelio Labs. %.

The Metaverse, which has been neglected by Europe and the United States for a year, has the future in China?

📸️ © Bing

The drop coincides with a broader slowdown in the tech industry — job postings in tech hubs such as San Francisco and Austin, Texas, have fallen 8.4% over the past four weeks, according to job site Indeed.

Zuckerberg’s big bets on virtual reality and other emerging immersive technologies spurred companies across industries to seek out experts in these fields, creating a brief hype from the demand side.

And now, as recession fears mount, employers are recalibrating their hiring needs and workforce budgets:

Zuckerberg has previously said on Meta’s earnings call that he is “slowing down” on long-term investments and scaling back hiring plans due to a lack of revenue.

Apple, Meta’s emerging rival in virtual reality, also recently said it would be “more cautious” in hiring.

Meanwhile, Google’s parent company, Alphabet, has been shying away from grand futuristic claims about the next iteration of the internet — and while moving quickly in areas like augmented reality, Alphabet has also slowed hiring.

The Metaverse, which has been neglected by Europe and the United States for a year, has the future in China?

📸️ © Bing

But while full-time Metaverse jobs have become more scarce, the number of freelance gigs for virtual world-related services such as avatar development and 3D design has more than quadrupled, according to freelance talent marketplace Fiverr International.

So, could this be what the Metaverse calls decentralization.

Despite the hype, Americans, like Europeans, have not hopped on the train to the virtual world: In a study conducted by DEPT, only 16 percent of Americans understood what the Metaverse actually means.

At the same time, JPMorgan pointed out that China’s adoption of the Metaverse has also been slow, especially since cryptocurrencies have been outlawed — a key component of the West’s vision of Web3, after all.

But there are also opportunities for China, showing other possible directions for the development of the Metaverse.

03 China, moving forward while watching

JPMorgan’s analysis of China’s Metaverse suggests that Bilibili, Tencent and NetEase are most likely to make money as the virtual world evolves due to their strengths in gaming and social networking.

Previously, JPMorgan predicted that China’s online game industry could grow from $44 billion to $131 billion. Analyst Daniel Chen and his team wrote in the report:

The development of mobile internet and artificial intelligence over the past 5 to 10 years has shown that a company’s competitive advantage in one part of a technology ecosystem is often more important than which part of the ecosystem a company operates in in determining long-term value for shareholders.

The Metaverse, which has been neglected by Europe and the United States for a year, has the future in China?

📸️ © Bing

Analysts say that as the Metaverse grows, companies can make money in two main ways: games and intellectual property — which coincides with the strengths of the aforementioned businesses.

Both Tencent and NetEase have strong gaming businesses and partnerships with global industry leaders — Tencent holds a stake in virtual world gaming company Roblox, while NetEase has partnered with Warner Bros to develop a Harry Potter-based game. themed mobile game.

JPMorgan also estimates that the total potential market for business services and software in virtual worlds in China will reach $27 billion, while the digitization of offline consumption of goods and services will constitute a $4 trillion market in China.

For business services, NetEase already has a virtual conference room system called Yaotai, while Tencent operates a video conferencing app called Tencent Meeting.

Tencent also “has extensive experience in managing China’s largest social network WeChat/Mobile QQ” and could benefit from virtual item sales within these platforms, analysts said.

Likewise, Bilibili’s high user engagement will allow it to capture rich monetization potential in value-added services and virtual goods sales in the long run.

The Metaverse, which has been neglected by Europe and the United States for a year, has the future in China?

Bilibili has now become the “preferred entertainment platform” for Chinese aged 35 and under, with each user spending an average of 95 minutes per day on the platform in the first quarter.

At the same time, although the country is currently cracking down on minors playing games for a long time, major companies are promoting their own virtual world development plans – in addition, the different regulatory environment in virtual currency and NFT and overseas is also hindering the Metaverse development of.

Therefore, the practicality of these efforts from a commercial perspective is unclear.

Although there are indeed technical difficulties, it is clear that the difficulties faced by the development of the Metaverse, whether in Europe, the United States or domestically, are far more than just overcoming technical difficulties.

The future of the Metaverse may be in Europe, it may be in the United States, it may be in China – but only if the Metaverse has a future.

References for this issue

1. The business times Metaverse jobs are disappearing as Google, Facebook hiring slows book _

2. The next web Macron’s European Metaverse dream is far from fulfilled ger -meta

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