A Chinese think tank has warned virtual idol companies jumping on the metaverse trend to expand their investment and influence from risks amid an absence of relevant policies.
The People’s Daily Online Public Opinion Data Center, part of the state-run media outlet, said companies should be aware of risks, including information bubbles, capital manipulation, monopoly tension, and industrial ‘involution’ that may exist in the metaverse. Popularity in the metaverse, a digital concept using various forms of virtual and augmented realities to mirror social interactions, soared after social platform Facebook changed its name to Meta in October.
“The country has no clear guiding documents or guiding concepts about the ‘metaverse,’” the think tank said Monday. “In the digital utopian ideology that everything can be ‘metaverse,’ virtual idol companies, especially those that are new to the game, urgently need rational guidance from the government.”
Virtual singers and video streamers have been a popular Chinese subculture over the years, with the value of the virtual idol market reaching 3.46 billion yuan ($540 million) in 2020, up 70.3% from 2019, according to consultancy iiMedia research. With the hype surrounding the metaverse, its market value is expected to reach nearly 107.49 billion yuan in 2021.
However, developing virtual idols is pricey — 3D renderings could cost millions of yuan, with little prospect of an immediate return on investment. As of August, of the 3,472 virtual video streamers with relatively high followers on video-streaming platform Bilibili, 1,827 made no monthly income, according to domestic media.
And yet, experts said that the metaverse, promising people activities ranging from shared interaction and playing games to owning real estate, had attracted virtual idol companies to funnel more money into new virtual turf.
“Before 2021, the plight of virtual idols was the lack of suitable application scenarios, and they mainly appeared in livestreaming,” an industrial insider told domestic media.“But now the emergence of the metaverse provides a new application scenario for virtual idols.”
Tech giants such as Tencent, Alibaba, and ByteDance have already jumped on the bandwagon, investing in developing their own virtual idol IPs or technologies to enrich their existing e-commerce, gaming, and short video businesses. Some experts said that even brokerage companies might invest in virtual characters for brand endorsements in the future.
However, skeptics caution against overoptimism about the metaverse due to it still being in infancy. Some experts said that China’s ongoing campaigns against tech companies and excessive celebrity fandom culture may prove to be challenges down the road.
“The metaverse doesn’t exist yet — (the concept) is brand new, and there’s a lot of buzz about its potential,” Thomas Nunlist, senior analyst at Trivium China, told Sixth Tone. “China must want to lower all the risk, as it is already difficult to manage the internet as is.”
Editor: Bibek Bhandari.
(Header image: Popular virtual idol Luo Tianyi sings during a concert in Shanghai, July 23, 2016. People Visual)