S: Hi everyone. Welcome to CBN Friday Special, I’m Stephanie LI.
R: And I’m ZHANG Ran. Today’s program will dive into a topic that has drawn the eyes of the world since last year: the Metaverse.
S: Let’s start with the latest. Microsoft announced this week that it was acquiring Activision Blizzard, the maker of video games such as Call of Duty and Candy Crush, in a deal valued at $68.7 billion.
The acquisition, Microsoft’s largest ever, would catapult the company into a leading spot in the video game industry and make it the world’s third-largest gaming company by revenue, behind Tencent and Sony.
R: Microsoft, the owner of Xbox, has been investing in games for years. But this time, it was the framing of the acquisition that caught the eyes. The company said in a press release on Tuesday that buying the game maker “will provide building blocks for the Metaverse.”
So, first of all, what is the Metaverse, anyway?
S: Well, Metaverse is widely defined as an alternative digital reality where people work, play and socialise. It is the convergence of two popular ideas: virtual reality (VR) and a digital second life.
In a Metaverse era, our virtual lives play as important a role as our physical realities. In theory, we would spend lots of time interacting with our friends in virtual space, which means we would spend money there, too, to buy things for our digital avatars.
R: To make it closer to our lives, think of examples like video games, social media, the trending non-fungible token (NFT), virtual-reality headset, and virtual humans.
China Media Group has recently unveiled an artificial intelligence (AI) sign language virtual anchor, which will be used throughout the upcoming Beijing 2022 Olympic and Paralympic Winter Games to assist with the broadcast of events in sign language. Well-known singer Teresa Teng, who passed away in 1995, was part of a virtual human performance at a recent New Year gala show on TV.
S: The term “Metaverse” is everywhere now. Global consulting company PwC has highlighted the Metaverse as the next “Wild West” and painted a rosy outlook for the Metaverse-related economy, which will grow to $1.5 trillion in 2030, mainly driven by AR and VR technologies.
And the race between tech giants has already started. Microsoft’s move came after Facebook’s founder Mark Suckerberg renamed the social networking company to Meta. And media report that Google has worked on Metaverse-related technology for years, while Apple has its own related devices in the works.
R: Internet giants in China are also scrambling to snag a spot in the Metaverse. The country's three online behemoths “BAT” — Baidu, Alibaba and Tencent, which have reaped large profits from the development of internet over the past decades, have got a head start towards the Metaverse.
For example, Baidu launched the country’s first Metaverse-related app called Xirang in December, 2021, by holding its annual flagship developers’ conference, also China’s first Metaverse conference, via its Metaverse platform.
S: But just as Microsoft CEO Satya Nadella said, gaming “will play a key role in the development of Metaverse platforms.” Tencent, which is already the world’s largest video gaming firm by revenue, aims to pivot to the Metaverse as it is ramping up efforts to invest in other gaming firms, and even gaming hardware firms. The tech giant owns 40 percent of US gaming firm Epic Games, which is building its own Metaverse platform, and acquired Black Shark, which makes gaming-oriented phones and accessories.
R: Alibaba took a step further by registering several trademarks, including "Ali Metaverse.” And media reported that Alibaba has invested 10 million yuan in a prospective company related with Metaverse.
Gaming giant NetEase also filed dozens of Metaverse trademark applications. The company signed a strategic cooperation agreement with Sanya municipal government in Hainan province last December. As a part of the deal, the internet giant will set up its Hainan headquarters and build a Metaverse industrial base project in the southern island province.
S: While many Chinese big techs and start-ups have also said they are keen on developing Metaverse products and services, state news outlets have cautioned against what they see as speculative behaviour.
The state-run Economic Daily warned against speculative trading in Metaverse concept stocks, sending share prices tumbling before going up again. In a commentary, the paper said that retail traders should avoid hastily putting money into an "immature" concept like the Metaverse, since it is a project that requires long-term investment and development. And People's Daily said last month that people who engage in the sales of virtual properties risk "getting burned”.
R: Right. Some experts have expressed concerns over a premature hype about the Metaverse, saying that “it’s important for investors to tell the difference between genuine trends and beautiful ‘bubbles’,” while others said that the concerns should not be a roadblock for exploring related opportunities in this global race.
S: Well, I choose to sit on the fence for the time being. The Metaverse, like every other novelty, needs to be treated with caution and objection, especially when you decide to go all-in with it.
Anyway, Ran, could you fill us in with today’s stock market before we end?
R: Absolutely. Chinese stocks followed three straight down days dragged by firms that conduct nucleic acid testings. On Friday, the Shanghai Composite fell 0.91 percent and the Shenzhen Component lost 1.19 percent. However, the Hang Seng Index edged up 0.05 percent while the tech stocks declined.
Executive Editor: Sonia YU
Editor: LI Yanxia
Host: Stephanie LI, ZHANG Ran
Writer: Stephanie LI, ZHANG Ran
Producer: XIANG Xiufang
Sound Editor: ZHANG Ran, Andy YUAN
Graphic Designer: ZHENG Wenjing, LIAO Wanni
Co-produced by 21st Century Business Herald Dept. of Overseas News & SFC Audio/Video Dept.
Presented by SFC
21世纪经济报道海外部 南财音视频部 联合制作