Should we expect variants of the Metaverse, say "Western" and "Eastern" ones? How will national laws in the real world impact such development?
Nelson Chow
??Sustainable supply chain | Partner, Argon & Co | President, Institute for Supply Management (ISM) Hong Kong | Lecturer, PolyU | Deeply love Asia | Bettering self & organizations ??
Let’s start again with a TV show…in one of the episodes of Black Mirror - Fifteen Million Merits, people were living in a world where they had to earn credits (called “merits”) by riding on stationary bikes. The merits were a currency for people to purchase normal day items, like food or groceries. In this dystopia, people lived in pods made up of screens and were forced to watch adverts and had to spend their merits on certain advertised products. By watching this science fiction, I wonder if we would end up with a similar Metaverse experience in 3-5 years time.?
Source: Online photo - a scene from Black Mirror "Fifteen Million Merits"
We don’t know how exactly the Metaverse is going to change our lives, but many agree that it is going to be ever-present in our daily lives, with its own characteristics, currency, standards and even laws and regulations. People will spend most of their time in the Metaverse, from work to education, socializing and entertainment.
So far, we have already addressed and shared our point of view on the 2 strategic questions:
In this last article, I will address the 3rd strategic question:
Let’s first agree one thing – the Metaverse is NOT a concept based on geographical divisions. Moreover, the Metaverse is not owned by any country, company or individual, similar to how the Internet is not controlled by one entity. It is instead a concept that is borderless and global where companies and individuals can co-create and participate in it.
However, when we talk about the “Western” Metaverse we inevitably think about those development in the West such as the North America’s one. Not only because some of the most popular and biggest players in the Metaverse market nowadays are American companies (Meta Platforms, Nvidia, Roblox, Epic Games), but mainly because statistics show that North America currently holds the majority of the Metaverse market share, reaching 45% as of 2021.
By “Eastern” Metaverse we could refer to the one in the Asia-Pacific region, which holds nearly 34% of the current market share. Yet, we could also refer to a “Chinese” Metaverse or simply Chinaverse, which arguably has a big unique market and if the key players are not based in North America, then they are almost based in China (Alibaba, Tencent, ByteDance, NetEase, etc).
In Article 1 of this mini-series, we already stated that Metaverse market is simply huge.?It is estimated that the Metaverse market is going to grow exponentially by the end of this decade, with some forecasting its increase from the current USD40bn to an impressive USD1.6tn (yes, trillion!) by 2030.
In line with these analyses, the Big Tech companies have been working not only on developing the hardware and software technology aspects (VR, AR, MR) itself but more strategically on expanding the scope of the Metaverse. From immersive gaming, socialising, to prototyping and testing, these areas (and probably many more) will generate new growth avenues for the Metaverse market, supported by the fast rise in business-to-business and business-to-consumer activities.
Currently, around a third of the forecasted market growth is expected to originate from the Asia-Pacific Region. China’s Metaverse market is already estimated to account for around USD 8bn, out of the USD 40bn total market size. It is clear that China plays a pivotal role in shaping the future of the Metaverse.
The Metaverse in China is predicted to reach around 37mn users by 2025. Although it’s still a very small share of the total China population (1.4bn) now, it has extremely high growth potential.?
Source: Online photo from SCMP - Chinaverse vs western ones?
So, what have the Chinese tech giants done to embrace the Chinaverse?
Many key players of the Chinaverse are already embracing the shift to this big market. To give a few examples:
These are just a few of the numerous instances of Chinese businesses looking into the Metaverse’s possibilities.
How real-life cultural differences between the West and East may influence the Metaverse development of use cases?
Use Case 1 - Karaoke vs Concert Performance
It is probably well known overseas that one of the favourable entertainment activities in the 80’s in some Asian countries is Karaoke. As such, the Tech firm XRSpace is launching PartyOn, a karaoke music Metaverse in China, while Inkverse is planning to launch “Panorama Karaoke”, to provide an immersive karaoke experience to the users. This might be an important step towards bringing the music industry to the Metaverse. Especially as the Western world has thought about the Metaverse in the context of pop star performances (like the Travis Scott’s Concert on Fortnite I mentioned in my second article ).
Eastern and western Metaverse “designers” have use cases to serve specific customer segments via different means.
Use Case 2 - Virtual Idol / Robot KOL
Another trend that has been developing more rapidly in Asian countries is the use of virtual idols or you can call them robot KOLs.
Digital celebrities that first originated in Japan are quickly becoming a big industry in China, an industry that has more than tripled in size in just one year, from around $540mn in 2020 to $1.7bn in 2021.
Technological improvements, the use of 5G networks, AR and VR are creating a fertile ground for new marketing tools in the Metaverse and the use of virtual idols is a perfect example.?
Taking Korea as an example, the SM Entertainment, home to popular K-pop groups have been pursuing the idea of Metaverse by centring largely around the girl group Aespa, which features four members who have their own virtual avatars serving as group members as well. These virtual “members” frequently appeared in Aespa’s music videos and performances.?
Source: Online photo from SM Entertainment - Aespa with their virtual counterparts
Similarly in China, Alibaba launched a first 'Meta-human' virtual influencer last year called AYAYI, who even attended a physical marketing event of Guerlain’s.?You can check out more details in the YouTube link below.
Virtual idols are artificially created digital celebrities and therefore are not at risk of being involved in scandals, or getting sick or resigning. This could be a whole new world for marketers to shape brands and events.
领英推荐
Will there be a social scoring as a standard tool to rate the users in different Metaverses?
Social Credit System that has been under trial in China since 2009 which has created many controversies. While it might be arguable whether such a scoring system should be implemented, we can notice that, if the Metaverse is going to develop as an evolution of the internet, there surely will be some sort of rating on its users down the road.
Source: Online photo - will social credit system also be applied in the Metaverse?
Maybe it will be similar to what we are already doing for Uber drivers and clients when we rate them after a trip, or maybe a more sophisticated system, similar to the one represented in another episode of Black Mirror – Nosedive, where all the people were receiving scores from other users and, for example, people were allowed to live in certain neighborhoods or be accepted by certain groups ONLY if their scores were above certain thresholds.
Source: Online photo from Black Mirror "Nosedive"
A kind of a trust scoring system is already being considered in gaming context in Web 3.0 by companies like Avarta, where users can remain anonymous and have control over their data in the decentralised environment. The scores the users get could even translate into real-life perks like access to elite clubs or better loan rates.
Looking at China’s example, Alibaba’s Sesame Credit uses its own scoring system to generate individuals’ credit score. If social scoring becomes a reality in the Metaverse, how would different criteria be applied in “Western or “Eastern” ones and how to prevent certain kinds of social stratification?
I mentioned Web 3.0 a couple of times but what is it exactly? To put it simply, while the Metaverse is concerned with how users will interact with tomorrow’s internet and how they will experience it (via VR, AR, MR), Web 3.0 is primarily concerned with who will own, rule and govern the internet in the future (i.e. tech giants or individuals). The objective of Web 3.0 is to keep the internet out of the monopoly of tech giants.
Web 3.0 and Metaverse development is in China's strategic agenda "The 5 Year Plan"
Web 3.0 has been seen as an opportunity in China, given recent changes by the government which has put an end to the monopoly of tech giants. Recently the director of the Science and Technology Supervision Bureau of China’s Securities Regulatory Commission Yao Qian has published?an article “Web 3.0: A New Generation of Internet that is Approaching” where he predicted that Web 3.0 will play a significant role in China’s future internet infrastructure and hence required more attention for its development. Yao also emphasized the need for a more decentralized and user-focused Web 3.0 while Fudan University professor, Zhang Cheng, called Web 3.0 the "technological cornerstone" for future applications including the Metaverse. There is clearly a substantial interest in the shift from Web 2.0 to Web 3.0 in China.
In terms of control or ownership, although big tech companies might attempt to acquire new Metaverse players, experts agree that public internet control would make it difficult for corporations to own the world of the Metaverse without potential government influence.
How will national laws and regulations, for example those in China, impact Metaverse development?
The Metaverse development in other parts of the world has been bottom-up, led by private companies while in China we can see potentially more “center-led policy driven” top-down approach, i.e. coordinated and guided by the government.
Most countries and governments observe the development of new technologies, trends and solutions and based on the adoption rate by the public they would wait for precedencies that slowly build up and only when it reaches a larger scale, the government will start to introduce new regulations.
A different approach is being followed in the case of Metaverse, where regulations to govern its development and control its functioning are being put in place since the dawn of its creation in China.
The Chinese government has big plans for Web 3.0 and wants to move fast and set the standards. Many technologies that are needed for Web 3.0, such as VR, AR, AI and cloud computing have been included in the current government’s five-year plan for developing the electronic information industry, labelling it one of the four frontiers for research.
The Shanghai municipal government even made the Metaverse a focus of the city’s five-year plan in relation to public services, entertainment and manufacturing. Following this lead, other municipalities, such as Hebei Province and Wuhan City, swiftly followed suit. The Metaverse development seminars and talks have been organized by various municipal governments.
Source: Online photo - Web 3.0 is part of current China 5 year plan
Despite hints of caution and state-affiliated think tanks warning of national security issues, China’s leaders also see the Metaverse as a prospective technology that may be used to support economic growth. Moreover, experts believe that the benefits of developing a Chinaverse outweigh the risks.
Developing key infrastructure for a Metaverse, such as development clusters or supercomputing centres, will have beneficial spill-over effects on adjacent technological industries while also boosting economic growth and attracting talent, all without allowing other countries to dominate China’s Metaverse. However, while China is regulating the cyberspace, any potential banning of the Metaverse could be detrimental to the country’s aims to become the?global leader in AI by 2030.
Probably the main visible difference between the Chinaverse and other Metaverses, will be the accessibility of some content, or availability of some features that could be different in China, similarly to the internet sites that today are not accessible in China. Also, since China has banned the use of cryptocurrencies and decided to focus on the digital RMB instead, naturally there will be a different currency model that is going to be adopted.
According to market research, as many as 78% of Chinese consumers aged 14-50 are interested in the idea of socializing within virtual worlds, compared to 57% in the US and 47% in the UK. Amongst those interested, 82% are positive on the possible advantages of the Metaverse vs 72% and 67% in the US and UK respectively. The public interest in Metaverse in China is also obvious when we look at other numbers – the hashtag “Metaverse” had more than 340mn views on Weibo.?
Once there is a robust infrastructure in place and the government decides for a widespread adoption of the Chinaverse, it is possible that its development and mass adoption will be unprecedented, by far faster and more widespread than in the West.
In summary…
Firstly, there is a big Metaverse market and obviously tremendous value to be unlocked.
Secondly, the current Metaverse development is still in its early stage and we should collectively think of how to build a sustainable online and offline worlds for generations to come - i.e. not only focusing on commercial value but also social ones. ??
Lastly, we need to notice real-life realities such as laws and regulations will impact the development of the Metaverses, so we should observe how that would impact us as potential users and co-creators.
Echoing back to the original Black Mirror episode, I would be very disappointed if we created new worlds where human beings ended up sitting in confined space using merits to buy items in the Metaverse. Or we end up defining our values based on popularity (a bit like how many likes we got in IG). We already observed the good and bad of the Internet of Web 1.0 and Web 2.0. So ultimately what we would like to call-out is to give a think on the 3 strategic questions of the Metaverse and how you could influence its development. I hope you enjoyed this mini future-back series on the Metaverse. Please join our conversation!
The views reflected in this article are the views of the author and do not necessarily reflect the views of the global EY organization or its member firms.
Article contributors: Anna Chlebowska, Brandon Choi, Yanni Wong, Yannie Tsoi, Yannes Yau, Natalie Wong and Vivian Qian
References:
Managing Director and Country Practice Leader | Performance Improvement at Alvarez & Marsal Australia
2 年Greta insights Nelson!
?? Connecting People, Opportunities and Success | Future Energy | Future Subsea | Future Telco | Creator | Mentor | Host @ Thursday Solar
2 年Thank you for the insights, Nelson. Your mini-series on metaverse is at once informative and thought-provoking. This quote resonates me: "I would be very disappointed if we created new worlds where human beings ended up sitting in confined space using merits to buy items in the Metaverse. Or we end up defining our values based on popularity..." I think with any new innovations or inventions like the metaverse, their values should be based on whether and how they would help us solve any of the crises we are all facing—ranging from environmental pollution to food crisis, global inflation, arms trade, etc. If they serve none of those causes, we should question whether?we would allow these metaverses to have their tendrils in our marketplaces, our daily conversations, our get-togethers with friends, our news, and our understanding of reality.
Professor | Christian Scholar | Accountant & Advisor | Biz Historian/Observer/Analyst | Innovator | Bridgeman | Biz Theologian | Podcast Producer
2 年Good thought Nelson! It reminds me Lennon’s song “imagine there is no boarder … “
Retired
2 年????