Tencent says Beijing may support metaverse - as long as it obeys China

Chinese social media giant Tencent Holdings expects Beijing to allow 'metaverse' virtual environment services, now the talk of Silicon Valley, to operate in China - provided they fall in line with Chinese rules.

In some of its first public comments on the metaverse, Tencent, China's biggest company by market value, welcomed the potential for gaming business opportunities in a post-earnings call on Wednesday, but acknowledged China's version of the metaverse would need to be different to the rest of the world's.

"There's a lot of technologies that's related to the development of games as well as for the metaverse," Tencent president Martin Lau told analysts on a call peppered with questions about the metaverse.

Investors have pored over the prospects for the burgeoning virtual reality world ever since Mark Zuckerberg, CEO of Facebook, which recently changed its name to Meta Platforms Inc, announced that he would devote the future of his company on building a metaverse.

Microsoft and Disney have also said they are also working on their own metaverses.

"The Chinese government will be in support of the development of such technologies as long as the user experience is actually provided under the regulatory framework," said Tencent's Lau.

Amid the metaverse fervour, questions have been raised among tech investors about how it might evolve in China, where the internet is tightly censored and authorities have waged a wide-raging crackdown against its once free-wheeling giants, including Tencent since last year.

Regulators have banned all crypto transactions, tightened oversight of the gaming industry and also warned against "blind" investment in metaverse-linked stocks.

Lau said although there would be likely different sets of rules concerning the metaverse for China and the world, this was "not fundamentally averse to the development of metaverse".

Tencent, the world's largest online gaming firm by revenue, is by far leading the charge in China on the concept of virtual worlds, which has also attracted the interest of rivals such as NetEase and TikTok owner ByteDance, according to data firm NewZoo.

Lau said there were "multiple pathways" to the metaverse opportunity, such as through interactive games or a social network serving as a 'gamefield'.

"We have a lot of tech and capability building blocks that will allow us to approach the metaverse opportunity," he said.

Tencent owns a 40% stake in Epic Games and has a joint venture with Roblox Corp, both of which are working on their own metaverses.

The company, whose businesses also include China's dominant social networking and messaging app WeChat, has also registered over 20 metaverse-related trademarks for its apps in China and is working on more immersive, multi-player games.

 

(Reporting by Brenda Goh; Editing by Miyoung Kim and Kenneth Maxwell)