O’Connell has now started his own business aimed at bringing “the metaverse of China” to the world. He’s just one of many internet entrepreneurs who see it as the next gold rush – an ever-active virtual world where people create, interact, and pay for what they want.

Big Tech enters the scene alongside many start-ups. ByteDance, the Beijing-based maker of the short video platform TikTok, took a step into Metaverse with the acquisition last month of virtual reality (VR) start-up Pico Interactive.

Meanwhile, Tencent Holdings, the country’s largest games company, has registered several trademarks around Yuan Yuzhou, the Chinese translation of Metaverse, for its QQ service and Honor of kings, its most popular online game.

The Metaverse as a concept dates back to the 1992 cyberpunk novel Snow accident by American writer Neal Stephenson. It was recently reworked by Steven Spielberg’s hit film Loan Player One – which depicts a digital virtual world where users can play, chat and just hang out.

The concept gained traction during the Covid-19 pandemic, as people confined to their homes embarked on games like Fortnite and Roblox socialize and create new worlds with digital goods and tradable goods. A recent Bloomberg Intelligence report said the metaverse industry will be worth $ 800 billion by 2024.

Interest reached new highs in China this month after a number of Chinese concept actions from Metaverse took off. Within a week, games company ZQGame saw its shares more than double on the Shenzhen Stock Exchange after announcing it was going into Metaverse trading.

Chinese state media took note. Titles time, a state newspaper, warned in a comment last Thursday that if people “blindly invest in concepts as grandiose and illusory as the metaverse, they will end up being burned.” However, that did not stop Metaverse shares from recovering.

Another entrepreneur who pursues the Metaverse dream is Alex Xu, the former general manager of Leyou. Xu sold his Hong Kong-listed games company Leyou to Tencent under a $ 1.3 billion cash deal last year and after leaving the company in May, Xu founded a new holding company. called MultiMetaverse, aimed at bringing the metaverse to animation.

“The truth is, a lot of people don’t have a clue what the Metaverse is,” Xu said. “But a lot of people are now betting speculative… there’s a lot of money pouring into what we call the metaverse ecosystem.”

However, the Metaverse hype in China comes at a time when the country’s entire gaming industry is under pressure from tighter regulations to prevent gambling addiction in children and a purge. content deemed inappropriate by state authorities.

Venture capitalist Matthew Ball, one of the Metaverse’s most vocal advocates and manager of the exchange-traded fund META, which manages around $ 100 million in assets under management, said that Chinese companies’ affinity for games video gave them a head start.

“The opportunity for China in the metaverse runs deep, especially given how the country has excelled in developing interactive products and technologies, and investing around the world,” Ball said.

Matthew Kanterman, senior analyst at Bloomberg Intelligence, wrote in a recent report that “Chinese consumers are among the most positive about the development of the metaverse” because they are already used to socializing in games. “Live events and brand connections can be the primary revenue opportunities, while user-generated content and decentralized technology play a small role,” Kanterman said.

Meanwhile, Hong Kong-based Animoca Brands, one of Asia’s most successful blockchain game companies, recently paid the ultimate price of having to pull off the Australian Stock Exchange last year for its push. aggressive in cryptocurrencies and non-fungible tokens (NFTs), as part of its journey to the Metavers.

Despite this setback, Animoca’s private valuation has increased tenfold north of US $ 1 billion with investments in some of the world’s most popular blockchain games such as CryptoKitties and Axie Infinity. Yat Siu, co-founder and chairman, said interest in the Metaverse has never been higher, with many venture capitalists trying to embark on fundraising for Metaverse companies.

“There are a lot of VCs trying to get into the metaverse right now. There are a lot of people trying to explore and understand it. The challenge is how to invest [correctly] in space, ”he said.

Xu said that some entrepreneurs and companies are trying too hard to bring everything into the virtual world.

“Some things can be moved in the virtual world and some things cannot,” said Xu. “If the real world was completely moved to the virtual world, I don’t think it would necessarily be a happy place.”

Xu said that the metaverse depicted in Loan Player One may in fact be a bad example because there was still a “class struggle” there. “If you still have to study, work, deal with office politics, and be penalized by the rich and powerful, this virtual world won’t have much entertainment value,” Xu said.

Siu d’Animoca said the kind of “Closed Metaverse” that many Big Tech companies now advocate – mostly backed by a Big Tech company – has already strayed from what should be “Open Metalverse.”

“In a closed metaverse, you have to charge a higher tax just to support the infrastructure, which means the catch rate [of the supporting company] is high, ”Siu said. “Just like the real world, this won’t be the most desirable place.”