Analysis-A metaverse with Chinese characteristics is a clean and

By Eduardo Baptista

BEIJING (Reuters) – How will China’s metaverse evolve? Look to the letter “c”. Clean, censored, compliant and crypto-less is the view from experts.

The descriptions point to the long shadow thrown by Chinese authorities who have already intimated they will have a heavy regulatory hand in how it will develop – a shadow some China metaverse advocates fear will stunt its growth.

From Microsoft (NASDAQ:)’s $69 billion plan to buy Activision to Facebook (NASDAQ:) changing its name to Meta Platforms Inc, much of the tech world is leaping to build what many expect will be the next generation of the internet: immersive virtual worlds that replicate many aspects of real life.

Experts say China’s metaverse efforts lag countries such as the United States and South Korea, citing less investment by domestic tech giants. Industry-leading products like Meta’s Oculus virtual reality (VR) headsets are banned in China and the slow development of attractive domestically made VR headsets has meant China has yet to see a VR platform or metaverse gain significant popularity.

But interest has begun to surge. In the past year, more than 1,000 companies including heavyweights such as Alibaba (NYSE:) Group Holding and Tencent Holdings (OTC:) Ltd have applied for around 10,000 metaverse-related trademarks, according to business tracking firm Tianyancha.

Baidu (NASDAQ:) broke new ground in December with the launch of “XiRang”, described as China’s first metaverse platform though it has been widely panned for not offering a high-level immersive experience. Baidu says its app is a work in progress.

Start-ups too are seeing more investment. In the three months to end-November, more than 10 billion yuan ($1.6 billion) was invested in metaverse-related ventures, far more than the 2.1 billion yuan of investment that China’s VR and related industries attracted for all of 2020, according to Sino Global, a crypto venture capital firm focused on China.

“Investors and venture capital managers who hadn’t talked to me in years were suddenly messaging – asking if I want to go for a meal and talk. They all want to talk metaverse,” said Beijing-based Pan Bohang whose startup plans to launch a VR social gaming platform.

A REGULATED REALM

Experts say the infancy of China’s metaverse allows Beijing plenty of room to co-opt its development, particularly since the current metaverse buzz has coincided with an unprecedented regulatory crackdown on tech and other industries.

“Traditional Chinese internet businesses developed first and were then regulated. Industries like the metaverse will be regulated as they are built,” said Du Zhengping, head of the state-backed China Mobile (NYSE:)…