China is in the grip of metaverse fever, with hundreds of new businesses being formed and regulators stepping in to combat soaring stock prices.

While stock prices cooled Friday after warnings from state media, they have rebounded this week as China's sentiment-driven market resumes course. At least nine metaverse-related companies received warning letters from securities regulators in early November, Economic Reference Daily reported.

Figure 1: So meta: China was racing towards the Metaverse before Facebook's change to Meta, as companies try to cash in.
(Source: Sipa US/Alamy Stock Photo)

Over the previous nine trading days, around a dozen metaverse stocks had increased their value by more than 30%, it said. Among those sent "please explain" letters was Shenzhen-based ZQGames, whose share price had increased 300% since September after announcing a new game with metaverse elements, SCMP.com said.

Shanghai-listed Inmyshow DigitalTech, which had also flagged up a metaverse-linked game, and IT firm Century Networks, were also asked to provide details.

Getting in early

The boom predates Mark Zuckerberg's public embrace of the concept; nearly 400 metaverse-related companies have registered since September. The zeal for the metaverse has spread to the telecom sector as well. China Telecom laid out some initial plans at a company event last week.

Li Anmin, chairman of China Telecom subsidiary Besttone, described the metaverse as "the next-generation Internet in the next 20 years, the virtual space of human digital life in the future, and an important production source of new digital assets."

Li said Shanghai-listed Besttone, a cloud gaming and entertainment firm that has built an integrated 5G XR platform, would provide an integrated metaverse platform and cloud to serve all types of virtual worlds.

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He believes the platform will develop by gradually combining a series of large and small virtual worlds based on the real world. In the second stage, after several years of development, "a super virtual world" would eventually form, he said.

China Telecom Vice President Tang Ke said the Besttone metaverse would leverage China Telecom's broad cloud and product content capabilities. China Mobile content unit Migu in October also set out its metaverse roadmap, but it has gone a step further releasing its first product – an immersive digital twin app centered on Chinese-American skier Eileen Gu at the forthcoming Beijing Winter Olympics.

China Mobile last week announced the formation of China's "first approved metaverse industry association," including China Telecom and China Unicom as members. It sees its job as to aid the "healthy and sustainable" development of the China metaverse industry.

That may sound underwhelming, but it does mean the operators have the government imprimatur on their metaverse strategies – especially important in today's hands-on regulation of the tech sector.

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— Robert Clark, contributing editor, special to Light Reading