The actual term metaverse was first put forward in Neal Stephenson's 1992 science fiction novel Snow Crash, in which he described a virtual world called the Metaverse, a computer-generated 3D world that is interactive, immersive, and collaborative. The 2018 movie Ready Player One, directed by Steven Spielberg, further clarifies the concept of the metaverse by portraying it as a virtual replica of the real world.
The metaverse has been part of daily life among China's younger generations as a gaming concept. However, a statement by ZQGame, a digital entertainment company listed on the Shenzhen Stock Exchange on September 6, completely blew up the metaverse concept. The company announced its new metaverse-based online game that merges virtual with actual reality. Online, every gamer can become a unique brewing master in the China of 100 years ago. When going offline, gamers can pick up the spirits they conjured up whilst gaming online.
The bulletin has stirred up quite a sensation in the capital market, pushing up metaverse-related stocks. Moreover, several capital companies have already announced their participation in the further expansion of this virtual environment.
However, the hype comes with a disclaimer. A number of industry observers have warned equity investors against the rising metaverse hype, stating the concept is vague and definitely still in its earliest stages of development. What's more, the related technologies, application scenarios and business models are far from mature.
Nevertheless, given the technology behind the metaverse, the concept is arguably more than just another hype and more of a new type of energy or a new angle for the digital economy.
Although the metaverse is about the virtual world, it is most definitely based on the physical technology offered up by the real world, with a combination of telecommunications, augmented reality (AR) and virtual reality (VR) serving as a major backstop. This virtual world requires the online speed from the telecoms sector as well as depends on AR and VR to present the imagery.
Thanks to the ultra-rapid online speed courtesy of the 5G network, novelties like automated driving and concepts like that of the metaverse, which used to exist only in science fiction, now begin to take form in real life. Meanwhile, the popularity of the metaverse in China implies China's leading status in terms of the development and application of 5G around the world.
Although some Western countries are boycotting Huawei in excuse of the "national security," 5G technology is triggering a revolution in China's social life. Huawei recently announced it would be launching its 6G products for commercial use in 2030. By that time, a virtual world like the metaverse will be closer to the real world, smarter even, and China's digital economy will have likely gone through a growth spurt.
The pouring of capital into metaverse-related businesses is injecting new vitality into the development of the virtual world as well as AR, VR technologies and other digital infrastructures. In 2020, the market value of the AR and VR sector in China stood at some 40 billion yuan ($6.2 billion), expected to surpass 100 billion yuan ($15.5 billion) in 2023. Shored up by the metaverse, AR and VR are likely to develop into the most important terminal products—following smartphones.
However, people must remember that the metaverse is still in its nascent period; it's very necessary to shield it from the wild intervention of capital, speculative hot money flows included. The China Securities Regulatory Commission has already delivered a letter of concerns to listed companies involved in metaverse development.
The development of the metaverse is a continuous process, free from tech giant manipulation. When the best of the physical world and digital world connects with the metaverse, a new style of human life will come into being, reshaping the entire digital economy system.
(Print Edition Title: Metaverse: Hype or Hope?)