(gentle music)
- [Narrator] This is how big tech in the US
envisions the future of the internet.
Avatars, like this one,
playing games,
buying digital assets,
socializing,
ah, yes,
the metaverse,
and Chinese tech companies are piling in too.
Their versions of avatars and virtual worlds
look pretty similar,
but because of China's strict regulations,
players in the two countries are set
to have very different experiences.
Analysts estimate the metaverse industry
could be worth as much as $8 trillion
in each country,
but it's still early days for both Chinese
and American tech firms.
(upbeat music)
The visual effects seen in promo videos
for a metaverse platform
being built by Chinese tech giant,
Baidu, are still pretty pixelated and Legolike,
♪ Yeah ♪
quite a ways off the smooth immersive world
some have in mind.
Similarly, Facebook's parent company,
Meta's avatars are still legless,
and not particularly realistic
in the early version of its VR platform,
Horizon Worlds,
which lets people build custom environments
to hang out or play games in,
and is already available in the US and Canada.
Both Meta and Baidu have said an official launch
for their respective platforms
will take another five to 10 years.
Microsoft in the US
and Tencent in China,
which both own a number of videogaming properties
are also gearing up to develop their own virtual worlds.
(lively bright music)
But for companies in China,
the transition to the metaverse is expected
to be a little more complicated.
- [Winston] The Chinese companies
are subject to more regulations than in the US.
- [Narrator] Winston Ma is the author
of China's Mobile Economy,
and managing partner
at New York-based CloudTree Ventures,
which invests in metaverse-related tech,
like 3D video recording.
- [Winston] Companies are taking
a more cautious approach,
because of regulatory considerations.
That's a big difference between the US and China.
- [Narrator] Compared to China,
companies in the US generally have more leeway
from regulators,
and people in the industry
say that gives metaverse developers more free reign
in terms of innovation,
meaning China's rules are expected
to affect the user experience,
in other words,
these two avatars won't necessarily be able to see,
say, and do the same things.
(bright music)
- [Serkan] I really think it's going to be
a night and day between Chinese metaverses
and the Western metaverses.
- [Narrator] Serkan Toto is a gaming industry consultant,
he says, video games offer a window
into what the metaverse will be like.
And in China,
games have to go through a rigorous approval process
by authorities before they can be released.
(gunfire cracking)
He pointed to a violent first-person shooter game.
(gunfire cracking) In the version of the game
available to play in China,
the blood is green instead of red,
because of Beijing's content regulations
that restrict gore and violence.
(gentle bright music) Rules in China also limit
how long the country's hundreds of millions
of kids under 18 can game,
as regulators have said they want to prevent user addiction.
- [Serkan] These rules and regulations
that are already in place
are going to be transferred over to the metaverse.
There's no motivation for the Chinese government
to soften their stance
just because a game is embedded
inside the metaverse.
- [Narrator] Chinese officials have already indicated
that some strict rules will apply to the metaverse,
and established a subcommittee
that, according to policy experts,
aims to create specific standards
for these virtual worlds.
Those authorities didn't respond to requests for comment.
And state media was quick to tamp down the hype
after a recent rally of Chinese metaverse-related stocks,
warning society not to get too wrapped up
in metaverse speculation.
(speaking in foreign language)
(quirky music) Chinese regulators
are also extremely cautious
about digital payment systems,
which are already how people buy things
in metaverse-like platforms available in the US,
such as Roblox,
Sandbox, or Decentraland.
- [Winston] In the US,
lots of metaverse plays
involve in-game crypto tokens and NFTs,
but in China,
cryptocurrencies are strictly regulated.
- [Narrator] Last year, the Chinese government
declared cryptocurrency transactions illegal,
saying it was concerned
that crypto's decentralized anonymous transactions
could give way to fraud and money laundering.
Authorities have instead promoted the use
of a central bank-issued virtual yuan.
So, buying art or digital concert tickets
with crypto isn't possible in China,
(lively dance music) and that could contribute
to further insulating China's own metaverse platforms.
- [Serkan] At the moment, at least,
if companies like Tencent are building metaverses,
there's not going to be any kind of tokens in them.
These companies are challenged now
to come up with alternatives
that the Chinese government is going to tolerate.
- [Narrator] In this context,
analysts say metaverses,
like Baidu's, probably won't face direct competition
from Meta or Microsoft in the Chinese market,
which, when it comes to the internet,
is already separate from the rest of the world.
Facebook and Google, for example,
don't operate in China,
because of strict censorship.
Microsoft and Meta didn't respond to requests
for comment on their metaverse plans for China.
- [Serkan] The future of the Chinese metaverses
will be a reflection of the Chinese internet today.
There's really going to be a huge war
between these metaverse.
(intriguing bright music)