Why Chinese tech giants are embracing the metaverse despite state media warnings
- Bilibili says it has great potential to develop the metaverse after Tencent and NetEase made similar declarations
- The People’s Daily cautions investors against falling into what it sees as a market hype around the metaverse
Tech giants in China are feeling pressured to assert their presence in global discussions about the metaverse to avoid losing out to Western peers despite caution from authorities, analysts said.
Also this month, telecoms juggernauts China Mobile, China Unicom and China Telecom partnered with several tech companies to form the Metaverse Industry Committee, China’s first industry group dedicated to the concept.
Amid the rush by Chinese companies to embrace the metaverse, however, state media outlets in the country have been warning investors against buying into the hype.
On Thursday, People’s Daily, the Chinese Communist Party’s mouthpiece, warned against what it sees as a market frenzy, saying that “everyone still needs to stay rational in understanding the current metaverse mania”.
Last week, the state-run Economic Daily also cautioned against speculative trading in metaverse concept stocks, sending share prices tumbling before paring losses this week. In a commentary, the newspaper said that retail traders should not hastily put money into an “immature” concept like the metaverse since it is a project that requires long-term investment and development.
Still, Chinese tech firms are now racing to embrace the metaverse because they cannot afford a slow start, said analysts.
It takes years for companies to build sophisticated metaverse experiences, putting late starters at a disadvantage once the concept becomes mainstream, said Serkan Toto, chief executive of Tokyo-based consultancy Kantan Games. The metaverse industry is forecast to be worth US$800 billion by 2024, according to Bloomberg Intelligence.
