China: Leading the Way in Virtual Reality
Author: Heidi MartinThis announcement followed close on the heels of other Chinese provinces getting in on the action. For instance, the city of Suzhou recently disclosed its initiative to become an international metaverse center to create a virtual world, much like the popular video game, Animal Crossing. The role of the Henan Cultural Tourism Investment Group echoes a similar move by the municipal government of Shaoxing in East China’s Zhejiang province in 2021, when it initiated a 300 million yuan fund to assist companies in the region to develop projects related to virtual and augmented reality (AR) technologies.
Besides local governments, public sector firms have been playing a major role in the development of the metaverse ecosystem. In 2020, the state-owned China Merchants Bank invested in the virtual reality game development company, Fiery Summit Technology. After investing half a million dollars, China Merchants Bank gained a minority stake in Fiery Summit. More recently, in 2021, the state-owned GuiZhou Big Data Exchange invested in a metaverse development company, ByteDance.
The growth of the Chinese metaverse industry is being driven not only by public sector investors, but also by dedicated private equity funds. One of the oldest and largest metaverse specialised venture capital firms in China is Metaverse Club. They've invested in dozens of early-stage metaverse projects in the past few years.
Investment in the metaverse will only accelerate with the Chinese regulators taking a proactive stance towards blockchain and cryptocurrency. Recently, the China State Internet Information Office urged its citizens to embrace the cryptocurrency world with caution. These steps signal that more and more firms should continue to invest into virtual world projects, and the gaming industry should also benefit from the regulatory decisiveness.
China’s enormous population, a relatively open investing environment and massive tech infrastructure continue to serve as an attractive resource for companies looking to invest in metaverse projects. In the coming years, it’s likely that the Asian superpower will continue to dominate the field and become the leading player in the global virtual reality market. It is clear that the immense potential of metaverse and virtual reality technologies is being realised by forward-thinking investors and tech companies in the East Asian nation.