China's tech juggernauts form metaverse research institute
Meanwhile, Mark Zuckerberg's Meta spends billions on the concept
COMMENT While Meta has been hemorrhaging billions trying to bring CEO Mark Zuckerberg's metaverse to life with little to show for it, China has decided it too will take a crack at the virtual-reality concept.
This week reports emerged in China's state-owned Shanghai Securities Journal that some of the nation's most powerful tech companies have joined forces to form the "Joint Research Institute of Metaverse and Virtual-Real Interaction" in Shanghai.
Participating companies include Tencent, which owns a slice of most large game-makers in China; Huawei, the comms giant which is famously a favorite target of US sanctions; and Epic Games, of which Tencent owns 40 percent.
Also in the mix is China Mobile's Migu as well as top universities including Fudan, Peking, Renmin, Zhejiang, and Nanjing, which have been named the "the research co-construction units for the institute," Beijing news outlet Pandaily reported.
Professor Zhao Xing, from the Big Data Research Institute of Fudan University and the National Intelligent Evaluation and Governance Experimental Base, has been hired as dean.
According to Shanghai Securities Journal, Zhao said that "Shanghai has valuable experience in digital transformation and construction, as well as strong support from metaverse talents, technology, industry, urban environment, and consumption capacity, which constitute the core reasons for the establishment of the Institute in Shanghai."
China is now on its 14th "Five-Year Plan for Digital Economy Development" as of January, which has resulted in "new digital formats" being "laid out all over the country," Pandaily said, with the metaverse "one of the most important emerging growth points." Beijing, Shanghai, Guangzhou, Hangzhou, Xiamen, and more are all said to have launched metaverse development policies of their own.
Shanghai is at at the forefront of this movement, with metaverse-related industries in the city predicted to reach ¥350 billion ($51 billion), driving the software and information services industry to exceed ¥1.5 trillion and the electronic manufacturing industry to more than ¥550 billion. The Joint Research Institute of Metaverse and Virtual-Real Interaction is also calling Shanghai home.
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It looks like Meta has its work cut out. Zuckerberg announced Facebook's pivot to metaverse-related activities in October 2021 and described his vision thus:
In this future, you will be able to teleport instantly as a hologram to be at the office without a commute, at a concert with friends, or in your parents' living room to catch up. This will open up more opportunity no matter where you live. You'll be able to spend more time on what matters to you, cut down time in traffic, and reduce your carbon footprint.
Think about how many physical things you have today that could just be holograms in the future. Your TV, your perfect work setup with multiple monitors, your board games and more — instead of physical things assembled in factories, they'll be holograms designed by creators around the world.
Almost a year later, despite the advent of Nvidia's Omniverse for digital twins and other work in the space, Meta is no closer to stemming the flow of money into the project. Reality Labs, the division responsible to breathing life into the metaverse, recorded a $10.2bn loss, after spending $12.5 billion to earn $2.3 billion in revenue, in fy2021.
While it's not "nail in the coffin" territory for the social network, which made $39.37 billion in net income last year from $117.9 billion in revenues, investors are watching the Reality Labs numbers with concern, and Meta appears to be nowhere near a working metaverse that people want to spend any time in.
Domestic social media companies in China arguably have some advantages over their western counterparts. For example, heavily censored yet feature-rich Weibo has more users than Twitter and some research [PDF] has found that the former's userbase has a higher level of social reciprocity, meaning more of a user's followers will actually respond when they talk.
The foundation of this research institute could mean that Chinese citizens will be surfing the metaverse sooner than the rest of us. Although we're not sure which hellscape we're more afraid of – one that bows to the Chinese Communist Party or one born from the worst excesses of late capitalism.
We have asked Huawei for comment. ®