ByteDance, Tencent, Alibaba Invest in China’s Regulated Metaverse

Chinese tech giants are beginning to invest more in the metaverse, CNBC reported Sunday (Feb. 13).

The ‘metaverse’ usually refers to a virtual world where people can adopt online avatars and interact with others. In China, censorship will likely be a factor, with Beijing continuing to keep a check on its domestic companies.

CNBC wrote that China’s total addressable market for the metaverse might come out to 52 trillion yuan, or $8 trillion, according to a Morgan Stanley report. Companies such as Tencent, NetEase, Alibaba and TikTok owner ByteDance could be the frontrunners in the space.

One challenge could be finding ways to hook in younger users, which the CNBC report says could come down to whatever types of applications might be part of the metaverse. According to analysts, virtual reality, gaming and social media might be parts of it all.

“Metaverse is the future of social network,” Winston Ma, managing partner at CloudTree Ventures, told CNBC. “All China’s tech giants have to embrace it to find new ways to engage the youngest generation of internet users, which is critical at the time when their business models on smartphones and mobile internet are matured.”

PYMNTS wrote recently that the market potential for the metaverse could hinge on China.

See also: $8T Metaverse Market Potential May Hinge on Regulation in China

The report cites the aforementioned Morgan Stanley, which says China’s market could dominate the sector. However, it will all come down to how things are regulated, and while Meta and Microsoft are already delving deeply into the metaverse, China is taking its time.

The metaverse might also see more regulation in the United Kingdom, which could cost Meta and other tech giants billions in fines. The Online Safety Bill will include an online duty of care for platforms and require removal of illegal content.

Morgan Stanley’s estimate might actually be lowballing it, as the bank excluded non-fungible tokens (NFTs).

“We expect the metaverse TAM [total addressable market] to be expansive and go beyond the current online consumption market, which is mainly dominated by eCommerce and online entertainment spending,” the company said.