An investor's view of the Metaverse: Investment in the future

Sep 15, 2021 Digital Gaming

About the author: Richard Xu is the US Head of Grand View Capital(GVC) focusing on the TMT and EAS industry. He is experienced in Chinese go-oversea and cross-broader business. GVC is a cross-border fund that has more than 40 portfolios in the US, South Asia, Africa, and China including Habby, Holla, OnePieceWork, Hiretual, News Break, the Passage, etc.


Metaverse is explained in Wikipedia as follows: The Metaverse is a collective virtual shared space, created by the convergence of virtually enhanced physical reality and physically persistent virtual space, including the sum of all virtual worlds, augmented reality, and the Internet. Simply put, it is a "real" virtual world supported by high technology. That is, the virtual world we conceived in "The Matrix", "Inception" and "Avatar". This innovation originated in the West, leaving aside the technology, I think it is also a cultural development of necessity.


The East thinks in terms of extinction while the West thinks in terms of substitution

I accept the view that the East, represented by China and Japan, accepts change with a more open-minded concept of being closer to nature and the unity of heaven and man. I call it "the thinking of extinction". In response to change, the West wants to replace the senses brought about by the original facts with material or sensory signals which is a kind of "alternative thinking". In short, it is the difference between the aesthetics of extinction in the East and the alternativeism in the West. This difference in the underlying thinking of the East and the West in dealing with change and futures greatly affects the attitude of artistic expression, people's behavior, and the life which can be seen in the means of Chinese medicine and Western medicine, the understanding of Chinese and Western religions, and so on.

How do we understand this? We are all familiar with the idiom of "the sea and the field". Magu has witnessed the East China Sea transformed three times to become a field of sand, and three times to be submerged, without intervening. At the height of the Chinese gods, this is nothing more than a casual conversation and observation. Extinction is more than usual. In Japan, there is a word called "wabi-sabi". It means that you can't decorate your house and live in a rough house.

Let's look at Western culture. Take Blade Runner for example, in the future world, the protagonist is in a miserable state but still spends much money to buy an AI girlfriend who can only exist in his home in the form of 3D projection. The AI girlfriend, who loves him dearly, found a call girl for her boyfriend before she was deleted, casting her avatar on this call girl's face throughout. I was both shocked and couldn't understand why the director wanted the AI to make such a play, but all the Western critics were delighted with this section.

When I read "The Wandering Earth", I found that in Chinese science fiction, even something as important as love can die out in the future. Connecting the two, I suddenly understood that this is not the difference between the two countries' sci-fi authors, but the difference between the two countries' underlying thinking. In a time when desires cannot be satisfied, traditional Eastern culture tells us to accept extinction, Zhuangzi said: "The supreme man has no self, the divine man has no merit, and the sage has no name". Western culture, on the other hand, will use all means to satisfy the corresponding senses instead. Skilled craftsman like Yanshi in China in thousands of years is regarded as strange power, while Boston Dynamic is the light of Western civilization.

This situation also led directly to the birth of the Internet and the Metaverse, in the Western world. The greatest alternative thinking is, in fact, the Internet. Many of my friends define the Internet as a projection of the present-day carbon-based world into the silicon-based world. In today's terms, the Internet is the original and largest Metaverse, although it may only be a rudimentary Metaverse of information interaction.


Gaming worlds turned upside down by Metaverse pioneers

In the realm of the Internet, there is one industry that may be the first to make the Metaverse more accessible to more people, and that is the gaming industry. If we only look at the mainstream single-player games in the past, most of them are like movies and anime. There are set levels and storylines (the popular post-80s games "Chinese Paladin" and "Warcraft" are the representatives), and a layer of self-awareness and imagination is needed for players to project themselves hypothetically on top of the protagonist of a virtual world, and this virtual character is often well designed.

Players are not satisfied anymore, and they want a different ending. Online games, sandbox games, and the open world allow players to play a role in the virtual world with higher freedom and be more like themselves. Just like Gen Z prefer Zelda, GTA, Spore, Minecraft, the prevalence of games such as Roblox and Dynamic Sen today, the maturity of technologies such as VR and Brain Machine (a track that Elon Musk in the US and Chen Tianqiao in China are trying to layout) seem to have sworn that gamers no longer need to live according to the script of the scriptwriter. We can completely create our worlds. And it can be asserted that the concept and technology of Metaverse will bring qualitative changes to the game industry which is growing in the category. In my opinion, traditional games and Metaverse are like the difference between movies and the present world, and this is even a new track.

Clubhouse has sparked a lot of discussion in China. People are also trying to understand the project from the perspective of product, content, epidemic, etc. So if we don't understand the project by this point, we can pull the telescope away a bit and look at the success of Zoom. Why has Zoom beaten so much remote meeting software? My answer is that Zoom is the most successful company for perfectly replicating offline meeting scenarios online. Clubhouse is the case. If you look at it from the perspective of a scenario, some people compare it to a university building, a Roman council square, a Beijing flyover stall, or anything, but in short, it's a Metaverse of an offline auditory scene.

Metaverse and what we used to call "online" are two different things. The so-called "online" brought by the "Internet+" wave is at best a very small part of it. Information flow is online while most of the senses and behavior needs still to be satisfied offline. For example, in e-commerce, what you buy is still an actual item, and you need to unpack the delivery. The Metaverse has now gradually begun to occupy different scenes of vision and hearing under the leadership of technology. Once all human senses can be simulated through technical means, the virtual steak-eating experience in the Matrix can be truly realized in the Metaverse.


There is no dichotomy in the flow of traffic

A friend told me that there is no real dichotomy on the Internet. I think this is a particularly good point. And discussions in VCs now tend to fall into a debate-style dichotomy with no end in sight. Many people also seem relatively agitated in discussing whether to accept the virtual world, to have conspiracy theories, to take sides, to label.

There are no good or bad users. We have inserted many labels for users, such as small-town youth, returnees, Eastern and Western, male and female, LGBT, but we understand that the world is not black and white, and the collision of product thinking is not one-size-fits-all anymore. In the end, everyone in the world is spending their time, not to say that reading is nobler than playing games, and everyone will eventually vote with their feet. And the Metaverse is born little by little to deprive us of our senses, we will have a long time, live in the real world and the virtual world in parallel. Everyone will thus have many identities and experience many lives, which I think is the ultimate human pursuit.

Today, when the collision of different ideas between the East and the West has existed for a long time. The vast new generation of youth who have received Western education is rather further away from the core of Eastern culture, and we are more interested in VR, virtual worlds, and the Internet. Here, again, I think there is no dichotomy, and the East is not opposite to Metaverse. I remember Osamu Tezuka drew his understanding of Elysium and Nirvana in the manga "Buddha". That is to transform into an aura and become one with all things. This is to forget everything and return to the Metaverse in the East, which is the same as Blizzard's understanding of the higher intelligence of the universe, and also, the Protoss in StarCraft: the spirit of all Protoss is connected to a spiritual body "Khala", and Zeratul is returned to Khala when he dies. From here, the Buddha's nirvana and Khala seem to be the ultimate form of the Metaverse, and such a thing, will this be our future?


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