Thursday, 2024 July 18

Chinese game developers jump on metaverse bandwagon, sending stock prices soaring

The metaverse carries different meanings for different people. For some, it’s where clans are built to work toward common goals in video games. For others, it represents a new way of collaborative work. In any case, metaverses are being built as shared virtual environments that will challenge the way our minds and bodies interact with digital spaces.

While the metaverse concept has begun to shape some forms of entertainment, like in the video games Fortnite and Roblox, Facebook’s Mark Zuckerberg has also said his firm will “transition from… being a social media company to being a metaverse company.” Not ones to be left behind on the latest consumer technology, Chinese firms are also carving out their own version of the metaverse—or at least claiming to.

One of the latest Chinese game studios to hop on the trend is Zhongqingbao, a company listed on the Shenzhen Stock Exchange. Last week, it released a teaser video of its Brew Master game, which is being developed for players to build and operate their own wine-making operation. What’s more, the wine that is made by players in the game can be purchased in real life; it will be made by wineries that partner with Zhongqingbao.

Brew Master doesn’t have a target release date yet, and the teaser was light on details about how the game will function, yet that hasn’t discouraged investors from issuing buy orders for Zhongqingbao’s stock. Upon its announcement on September 6 about its entry into the metaverse, the company’s stock triggered trading halts due to its rapid climb. Its price has increased by 120% over the past week.

While Zhongqingbao is a relatively small studio that made a splashy announcement, major tech companies have been more measured about their role in shaping a metaverse for Chinese internet users.

Last week, Tencent applied for two relevant trademarks: “Kings Metaverse” and “TiMi Metaverse.” The former may refer to its hugely popular but strictly scrutinized mobile game Honor of Kings, while “TiMi” points to the Timi video game studio, a subsidiary of Tencent Games. Tencent’s major rival in gaming, ByteDance, is also marching deeper into the metaverse through the acquisition of the world’s third-largest VR headset maker, Pico, in late August.

Even so, Chinese regulators are urging caution as investors pile into stocks that invoke the metaverse concept.

On September 6, when Zhongqingbao made its announcement about Brew Master, the company issued a statement to say the company was merely “exploring” the metaverse concept, and there was a long way between its initial plans for the game and the final product.

Then, two days later, Zhejiang Jinke Tom Culture Industry Co., which owns the video game title Talking Tom, said it was developing metaverse games, leading to a 20% jump in its stock price on the Shenzhen Stock Exchange, triggering trading halts. Another online game developer, Boton Technology, made a similar announcement that also induced a 20% gain in its stock price.

The Shenzhen Stock Exchange then issued queries to Jinke, demanding an explanation about actual progress in its game’s development. It offered a reply that was similar to Zhongqingbao’s.

In the meantime, state media is advising caution for the metaverse fever, warning retail investors about a potential bubble. “The metaverse is an illusory concept,” said the author of one article published by Securities Times on September 9. “Blindly pursuing it will only hurt your wallet.”

Read this: Game account rental businesses prosper under 3-hour playtime restrictions for minors in China

Jiaxing Li
Jiaxing Li
Report on China’s turbulent tech scene with deep context and analysis: cover tech policies and regulations; write about major internet firms like Alibaba and Tencent, and a range of tech-driven sectors from the chip, edtech, EV, to metaverse and gaming industry.

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