Heralding the Metaverse Era | Macau Business

More than a buzzword, metaverse  is seen as the next big thing. How is Macau jumping on the bandwagon? This explainer details the A to Z of the metaverse, from what it is to its possible applications in the city.  

The Covid-19 pandemic aside, one of the hottest topics worldwide in the past year is certainly the metaverse. From the change of the official name of technology firm Facebook to Meta last year, to the designation of 2021 as the “First Year of Metaverse” by the Mainland Chinese media, to renowned brands and corporations venturing into this virtual world for opportunities, all signs pinpoint it is the next big thing.

And this virtual wave has also arrived in this region — several local administrations across the border have included the development of the metaverse as one of their tasks from this year onwards, while activities of the metaverse and the related technologies like NFT (non-fungible token) are also brewing in Macau. Is the metaverse the future or is it just the scam of the century? Let’s get ourselves ready!

US$8 trillion

– Valuation of the metaverse market in China by brokerage Morgan Stanley

What is the metaverse?

Despite its futuristic nature, the term metaverse was coined three decades ago, when United States author Neal Stephenson wrote about this concept in his 1992 dystopian science-fiction novel Snow Crash to describe a virtual 3D world accessed by people via goggles and other terminals. Almost 30 years later, Mark Zuckerberg, co-founder and CEO of Facebook Inc-turned-Metaverse Platforms said at the rebranding and renaming of his company last October: “The next platform will be even more immersive — an embodied internet where you’re in the experience, not just looking at it. We call this the metaverse, and it will touch every product we build.”

“We’ve gone from desktop to web to mobile; from text to photos to video,” he said in a statement at the time. “I believe the metaverse is the next chapter for the internet.”

In other words, the metaverse refers to the concept of a highly immersive virtual world, where people can reside through their digital selves — such as avatars — as well as socialise and interact with others. Though many people talk about it, there’s not yet a concrete definition. “The concept of the metaverse is actually very broad, covering numerous aspects, so there is not yet any uniform definition,” says Zhou Jinquan, an associate professor at the Centre for Gaming and Tourism Studies of the Macau Polytechnic University (MPU). “The metaverse is the process of virtualising and digitising the real world.”

Also a member of the state-backed China Mobile Communications Association’s Metaverse Consensus Circle (CMCA-MCC) — a group founded last year to promote the development of the matter in the mainland — Prof Zhou uses the internet as an example to further explain why there are challenges now to visualise this novel idea. “We are still at the beginning stage of the development of the metaverse, just like what the internet meant for us twenty years ago — our definition of the internet was limited and narrow at the time compared with what it is now,” he exemplifies

Wen Linjian, president of the newly-founded Macau Metaverse Association (MMA), also offers his take on this new cyberspace. “The metaverse can be understood as a world composed by our digital selves, which is in parallel to our real world,” he illustrates. “There’s a popular saying about the metaverse on the social media [in the mainland]: ‘Everything in this world can be part of the metaverse’.”


– Proportion of people in the world will spend an hour a day in the metaverse by 2026 in an estimate by consultancy Gartner

What is the connection between the metaverse and NFT, VR and more?

Critics of the metaverse lament that it is just an old wine in a new bottle, branding the existing technologies and ideas like VR (virtual reality), AR (augmented reality), AI (artificial intelligence) under a new umbrella. But this might actually be what the metaverse is really about. “Again, just like the internet, the metaverse is the convergence of different types of technologies rather than a single technology,” says Prof Zhou.

Thomas Ao, co-founder and president of another newly-established metaverse group in the city, shares a similar perspective, describing the metaverse as “a master concept”. “It integrates high-performance computing, AR, VR, blockchain, gaming, NFT and more,” the president of the Metaverse Industry Association of Macau (MIAM) says.

Using the movie industry as an analogy, which has only gotten off ground following the screening of the world’s first commercial film in France in 1895, he remarks: “We had people writing scripts, we had factories producing [film] equipment [and] we also had actors way before [1890’s], but all these only turned into a big business — the movie industry — after the French had invented the first commercial movie.”

“The metaverse is similar — it’s not entirely new” but bundles some existing ideas and technologies, he says. “Many [tech] companies want to call themselves metaverse [-related] now just to get higher evaluation in the capital market,” he agrees.

Among an array of technologies, Mr. Ao, the founding partner of venture capital fund Mindfulness Capital, which is specialised in start-ups of fintech, blockchain and NFT, regards NFT as a key feature of the metaverse. Adopting blockchain technology like cryptocurrencies, NFTs cannot be replicated and can serve as proof of ownership of digital assets in the metaverse, including art, collectables and property.

“Without NFT, it is hard to encourage you to stay there [in the metaverse] and truly benefit or enjoy that experience. Without NFT, it [the metaverse] would just be like a big VR game or a big VR zoom,” he indicates. “So I think NFT is quite core to the metaverse.”

“We are still at the beginning stage of the development of the metaverse, just like what the internet meant for us twenty years ago — our definition of the internet was limited and narrow at the time compared with what it is now,” says Zhou Jinquan, an academic

What gives rise to the metaverse? How big can the market be?

Mindfulness Capital has invested in more than 30 projects linked to the metaverse since 2019, and a few of them have become “unicorns”, referring to privately-held startups valued at over US$1 billion each. One of them is The Sandbox, a leading decentralised and community-driven gaming platform based on blockchain technology, and comprises programmes for users to create NFT assets, trade those assets, and build their own game experiences without coding. HSBC, one of the largest global banking providers, and sportswear conglomerate Adidas have announced in recent months partnerships with The Sandbox to dive into opportunities arising from the metaverse, for instance, the sports brand has bought a virtual land plot and launched NFTs on the platform.

“No one knew for sure a few years ago about the prospect of the metaverse, but we saw it coming and voted with our capital,” Mr. Ao says, adding the rise of this concept in the past year and more is also likely due to the Covid-19 pandemic, which has brought physical restrictions to our reality and made us yearn for interactions in the virtual world.

In Mainland China, the frenzy has particularly started after the name change of Facebook to Meta in last October, according to a news report by China Daily. Not only have companies from large corporations to small firms expressed interests in this virtual world, so have been the local administrations across the border. Shanghai was the first city and province in the mainland to include the metaverse in last December in its 14th five-year blueprint for the electronic information industry covering the 2021-2025 period; a month later, some other local administrations in the mainland, such as Hefei, capital of Anhui province, and Wuhan, capital of Hubei province, also talked about the development of the metaverse in their annual working reports.

In April 2022, the Huangpu District of Guangzhou in nearby Guangdong province even unveiled a proposal for support measures to “accelerate the innovation and development of the metaverse”, the first place in the Guangdong-Hong Kong-Macau Greater Bay to provide official assistance dedicated to the metaverse development. The measures include a housing purchase subsidy of up to RMB5 million (US$756,601/MOP6.12 million) for talents in the metaverse-related aspects, and a subsidy of up to RMB5 million for projects that boast iconic metaverse scenes with the characteristics of Haungpu.

Investment bank Morgan Stanley remarked in a research note in April that the value of this nascent virtual space could reach US$8 trillion (MOP64 trillion) in the Chinese market alone in the future, while another brokerage Goldman Sachs has put out a more subdued forecast, envisioning the valuation of US$8 trillion is only possible for the global metaverse market. Technological research and consulting firm Gartner has also predicted 25 per cent of people would spend at least one hour a day in the metaverse for work, shopping, education, social interactions and/or entertainment by 2026, when 30 per cent of the organizations in the world would have products and services ready for the metaverse.

“[The metaverse] integrates high-performance computing, AR, VR, blockchain, gaming, NFT and more,” Thomas Ao, the president of MIAM says.

How has Macau been prepared for the metaverse?

In view of the possible business and development opportunities, as well as the rising trend in the region, Macau has stepped in this uncharted water in the recent months. Local electronic gaming equipment supplier Asia Pioneer Entertainment Holdings Ltd founded a new subsidiary this year, APE Digital Creations Limited, focusing on the “development of the metaverse and related businesses”, which plans to launch a metaverse version of Macau, “Mini Macau” in the Sandbox, aside from a collection of Asia-themed NFTs designed by Portuguese artist Pedro Lourenço in June.

APE’s metaverse version of Macau will recreate renowned tourist attractions of Macau, including Macau Tower, Senado Square and Ruins of St. Paul’s, as well as entertainment venues, branded retail shops and nightclubs in the city. “As the worldwide backdrop has changed, preventing many travellers from travelling to Asia, our vision is to build Asia travel destinations on the metaverse. Digital travellers can virtually explore amazing Macau tourist attractions,” the company said of Mini Macau in its website. “Mini Macau will be launched with additional games in The Sandbox in the near future.”

The Macau Self-Improved Cultural and Creative Think Tank (MSCCTT) — a local association co-established by the prominent Association of Chinese Enterprises in Macau, the Institute for Cultural Creativity Tsinghua University, and the Macau Cultural and Creative Enterprise Federation — also announced in late April that a collection of Macau-themed NFTs by eight artists will be launched in June. The local think tank noted this first issue of Macau-themed NFTs would be important for the local metaverse development.

Also about NFTs, Mr. Ao’s association, MIAM, is holding the “Dream Space: New Wave in the Metaverse” NFT Art Exhibition throughout this month in Lisboeta Macau. The event, dubbed as the city’s first NFT art exhibition, showcases 37 NFT artworks from local and overseas artists, including Álvaro Barbosa, who is a scholar-cum-artist at the University of Saint Joseph, Macau.

As an extension of the exhibition, MIAM has also launched a grant fund of a total size of HK$1 million (US$127,425) to reward local creators in the fields of avatar architecture and games. “We are basically rewarding local creators who create fun avatar architecture or games on Sandbox,” the president says. “There will be more than one winner [grantee] for sure [and] there also isn’t a hard deadline… but if a lot of people apply and their works are good, the grant [fund] will then be gone.”

“Without NFT, it is hard to encourage you to stay there [in the metaverse] and truly benefit or enjoy that experience. Without NFT, it [the metaverse] would just be like a big VR game or a big VR zoom,” says Thomas Ao of MIAM

Opportunities for Macau people besides gaming?

The establishment of MIAM and its activities like the grant fund are to give support to local youngsters, who are keen to explore opportunities in the metaverse and related technologies. “We knew how hard it is for young kids or college graduates to pursue something that is not in the gambling business or hotel business [in Macau], like the creative industry,” Mr. Ao says.

“If they have questions about how to raise capital, what projects to join or whatsoever, we will basically share information [and] share job opportunities [with them], promoting the industry as a whole,” he continues. “So what we’re trying to do here is to make it a little bit easier for them [in their metaverse journey].”

Diversification is also what Mr. Wen and his partners had in mind when setting up the Macau Metaverse Association. The development of the metaverse, which involves an array of technologies and applications, could be beneficial to the development of the local economy, as the Macau government has underscored technological research and development and hi-end technology as new segments to diversify the local economy from gaming, the president of MMA says.

“Our association hopes to be a platform between the mainland and Macau in the area of the metaverse,” Mr. Wen says. “We have at hand some cutting-edge resources and expertise from the mainland and hope to share these with the local community.”

The association, which has only been founded earlier this year, plans to organise a series of metaverse-themed events in the near future to promote this concept among the local community. “Only when people understand more about the metaverse, will they be willing to get involved and work in the related areas,” he remarks. The association also plans to incorporate a firm in the second half of this year to facilitate the local metaverse development and attract local young people to engage in the field. “While Macau can rely on high-tech equipment and technologies developed elsewhere [for the metaverse development], the content needs localisation, which requires the participation of locals,” he adds.

“Only when people understand more about the metaverse, will they be willing to get involved and work in the related areas,” says Wen Linjian, president of MMA

What should Macau do to embrace the wave of the metaverse?

In the city’s second five-year development plan, which outlines the directions of social and economic development of Macau in the 2021-2025 period, the authorities pledge to advance the digital economy and the “smart +” development, which means incorporating advanced technology in multiple aspects, like tourism, governance, transportation, education, medical, elderly care and others.

For Prof Zhou of MPU, Macau can even take one more step forward, aiming for the “metaverse +” development, incorporating elements of this nascent concept in all industries, such as the local tourism. “The metaverse marks the 2.0 development stage of the local tourism and gaming sectors,” he claims. Similar to the concept of APE’s Mini Macau, the scholar thinks the authorities could come up with a metaverse version of Macau for tourists around the world to have a taste remotely of what the territory can offer. “This immersive virtual tourism experience won’t replace the genuine experience onsite, but pique the interests of travellers in Macau,” he explains.

Famous tourist sites in the city and local integrated resorts could also develop their own metaverse products. “For heritage sites like the Ruins of St. Paul’s [the authorities] could recreate what they look like in the past in the metaverse… to promote the heritage, stories and history [of Macau],” he illustrates. This cyberspace could also be utilised in education and training, for instance, integrated resort operators could reproduce the part of their casinos and other facilities in the metaverse for their staff to practise the day-to-day operation and interaction with guests, he adds.

Unlike the counterparts in Shanghai, Hefei, Guangzhou and others, the Macau authorities have so far not addressed or made any statements about the development of the metaverse, besides the recent statement by a tourism official. In the event organised by MSCCTT about the NFT arts in April, the deputy director of Macau Government Tourism Office, Ricky Hoi Io Meng, only expressed he believes the metaverse could bring new development opportunities and creativity to the local tourism.

Prof Zhou believes the Macau government should set up an industry development committee about the metaverse, which can guide the development of the related technologies and its applications, as well as devise measures to nurture local talents in multiple high-tech aspects and leverage the resources in nearby Hengqin and the Greater Bay Area.

A bubble, a scam or the future?

While this new virtual reality might be appealing and intriguing, it is no exception to risks, such as security and data privacy concerns and scams. The China Banking and Insurance Regulatory Commission released a statement in February, warning the public about the rise of allegedly criminal activities of illicit fundraising, frauds and others in the name of metaverse.

Chinese state-run newspaper People’s Daily also cautioned in a recent editorial that people should stay vigilant in regards to this nascent virtual concept. ‘Although there seems to be many possibilities and room for development in the metaverse, it is still a new concept in the making,’ the editorial said. ‘The debate about the metaverse will continue, whether it be supportive and doubtful… It remains to be seen whether it is just speculation by the capital market or a new playground, whether it is just an old wine in a new bottle or translates to new technological breakthroughs.’

In the perspective of Prof Zhou, the metaverse is the future with a bright prospect but the authorities should set up regulations in prevention of disputes and illegal activities in regards to the metaverse. “It’s a new thing — what we can do is take it step by step,” he adds.

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