According to Mario Stefanidis, vice president of research at Roundhill Investments, China is likely to adopt a similar approach to Web3 trends as well. He said:
“It will be much easier for China to oversee the development of a local metaverse rather than allowing users to access the ‘global metaverse’ and spending significant resources censoring and blocking certain experiences.”
The split will be particularly obvious between China's metaverse and the United States, according to Nina Xiang, writer, and creator of Asian digital intelligence and data company China Money Network. In her book How the US, China and the Rest of the World Are Shaping Different Virtual Worlds, she wrote-
“....the materialization of the Metaverse will take place amid persistent US-China geopolitical and technological rivalry. This means there may be greater divergence among the two countries' metaverse ecosystems related to major players, content creation, infrastructure outlays, applications, product formats, laws and regulations, and investment opportunities.”
Both the Chinese government and the country's main IT companies have invested heavily in the development of the country's metaverse. Many of the Chinese government's strategic ambitions, such as supporting the development of domestic and self-sufficient cloud computing and blockchain technologies, need the establishment of an inward-facing metaverse. Chinese tech companies can tap the enormous market potential afforded by more digitally savvy Chinese consumers by beefing up their digital services.
The Metaverse's potential has piqued the curiosity of Chinese businesses. More than 10 billion yuan ($1.6 billion) was invested in Metaverse-related companies in the three months leading up to the end of November 2021. According to Sino Global, a Chinese crypto venture capital firm, just 2.1 billion yuan was invested in the entire year of 2020.
Baidu, the Chinese search engine powerhouse, announced its metaverse app, XiRang, which means 'Land of Hope,' in December. Despite the app's stated concentration on digital infrastructure, Baidu vice president Ma Jie made it clear that bitcoin and NFTs will not be supported.
Tencent, a Chinese entertainment corporation, is the world's largest video game firm by investment. In January, it announced plans to buy VR gear developer Black Shark, and in a recent earnings call, the company's president Martin Lau termed the Metaverse a 'serious opportunity.' Tencent does not require decentralized infrastructure to realize its metaverse vision, according to the Intro to the Metaverse report, because of its market dominance. They stated:
“Tencent can theoretically achieve high interoperability without decentralized infrastructure because the Tencent ecosystem itself already covers most vertices in the game and tech services industry.”
According to a study conducted by local media outlet IPRdaily, Tencent filed a total of 4,085 patent applications for virtual and augmented reality technology in 2020 and 2021. It was by no means the only Chinese company to do so, with China accounting for six of the top ten corporations in terms of VR and AR patent applications filed in the last two years.
According to a Reuters analysis published on January 27, China's efforts in the Metaverse are still lagging. It cited 'less investment by domestic tech giants,' as well as 'industry-leading products like Meta's Oculus virtual reality (VR) headsets being banned in China.'
User content creation is also one of the Metaverse's main foundations, although it's famously tough in China due to the country's harsh limitations on expression. Companies like Tencent, according to NewZoo, will most likely create their Metaverse content through 'reusable game modes, live-ops, and IP collaborations.' Gaming is an important component of the Metaverse, but it is also subject to strict Chinese government censorship, which prohibits everything from graphic violence to depictions of anything that could be considered 'obscene.' The government has also begun to enforce time limits on how long minors can spend playing video games in the last year.