China’s tech giants are hopeful of launching metaverse and non-fungible token (NFT) businesses despite suffering a torrid year at the hands of the country’s vehemently anti-crypto government. Heavy-hitters including JD.com and Alibaba have laid out plans that involve metaverse and NFTs, although regulations have forced them to make cosmetic name changes.
Under pressure from Beijing, which has shaved billions from their stock market worth by clipping their wings this year, tech firms have begun referring to NFTs using terms such as “digital collectibles.” They have also placed limits on secondary trading, and such items are traded on private blockchain networks, unlike NFTs elsewhere, which are usually traded on Ethereum (ETH) and other well-known protocols.
However, instead of sitting by helplessly and watching as their American, Japanese, South Korean, and European rivals forge ahead with their own metaverse and NFT projects, it appears that Alibaba and the like that even the limited progress they are allowed to make under Beijing’s tight controls is better than sitting still.
As such, Alibaba has rolled out a new subsidiary named Yuanjing Shengsheng, arming it with USD 1.58m in capital backing. “Sources familiar with the matter” (identified by the South China Morning Post as Alibaba employees) confirmed that the new subsidiary would be metaverse-orientated, but did not expand any further on the matter.
Other players may seek to use international avenues to push ahead with their own expansion plans.
As a gaming giant with huge entertainment industry operations, Tencent will likely feel that it simply cannot afford to be left behind in the metaverse race. The firm’s domestic NFT (or “digital collectibles”) business line is already open, but more inclusive metaverse plans could well be on the horizon. Chinese media outlets pointed out the fact that Epic Games, an American gaming firm it owns a 40% stake in, is pushing ahead with its own metaverse plans – quite possibly with Tencent’s backing.
Tencent also owns minority stakes in a whole host of other gaming firms. In October, the Korea Times reported that the Chinese giant had made an undisclosed investment in South Korea’s NXN, following an earlier investment in the Japanese-South Korean chat app operator Line’s Line Games.
The Tencent CEO “Pony” Ma Huateng was quoted as telling investors:
“The metaverse is an exciting topic. I believe Tencent has great technologies and capabilities to explore and develop the metaverse. For instance, we have rich experience in sectors like gaming, social media and AI.”
Meanwhile, the e-commerce behemoth JD.com has released its very first NFTs (appropriately naming them as new “digital collections,” however) – and will have been pleased with their reception. With very little fanfare, the firm listed five series of the JOY Dog character-themed tokens on its Lingxi platform via its fintech and blockchain technology subsidiary JD Technology.
The latter firm unveiled 2,000 pieces in each series, pricing them at just over USD 1.50 each. The whole lot was sold out by Monday, media outlets reported.
The search engine Baidu, meanwhile, has been looking to up its involvement in “smart hardware” – earmarked as a key cornerstone in metaverse developments – by “heavily” backing its Nasdaq-listed iQIYI video streaming subsidiary’s efforts on this front.
The latter may be forced to revise its plans after Chinastarmarket reported that the firm had been forced to execute “substantial” staff layoffs, and raise subscription fees – a sign that all may not be well
Another Chinese gaming powerhouse, NetEase (which also has stakes in a number of overseas gaming firms) has “filed dozens of trademark applications related to the metaverse,” the Global Times remarked.
Regardless, the firms will take careful note of Beijing’s attitude to both NFTs and metaverse developments. The Chinese Communist Party (CCP) is committed to rolling out a digital yuan early next year and will not take kindly to anything in the digital space that threatens to upstage its new token. It considers crypto as a “tool of speculation.”
CCP-endorsed media outlets have already spoken about a “huge bubble” swelling up in NFT markets and have suggested more NFT-related regulations may be needed in China.
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