How could Tencent not jump on the metaverse bandwagon when Facebook is hinging its future on the new buzzword?
At this stage, Tencent’s approach seems more measured than Facebook’s $10 billion investment into its metaverse division. But any early hint from the Chinese social media and gaming giant will provide enough fodder for investor speculation.
During its earnings call on Wednesday, Tencent’s CEO Pony Ma unveiled the firm’s musings on metaverse for the first time:
Anything that makes the virtual world more real and the real world more rich with virtual experiences can become part of the metaverse.
The firm’s executives then took turns trying to flesh out this tagline. While their definitions lost me at times, the bosses agreed on three general “pathways” to reach “the metaverse”.
The current crackdown sweeping across China’s internet industry could cast a shadow over any metaverse in the making. Tencent believed Beijing is “not fundamentally averse to the development of metaverse,” as long as the user experience is “provided under the regulatory framework.”
But it’s hard to know what those regulations would look like when the country’s metaverses are still in their infancy.
Staircase to metaverse
The most obvious path to metaverse is video games, the firm’s largest revenue driver. It could be highly interactive games, multiple games under one common IP or infrastructure that enables users to make games, according to Ma.
Some of these ideas have already started to take shape at Tencent’s portfolio companies, such as Epic Games, Roblox and Discord. Yes, Tencent doesn’t try to do everything itself but has backed hundreds of businesses in which it finds strategic value.
“So it’s Fortnite together with Rocket League in the Epic example, or multiple different so-called game experiences within the Roblox example,” explained James Mitchell, Tencent’s chief strategy officer.
The second pathway, according to Ma, could be a social network that is “gamified and supports much more programmable experiences.”
Such a social network needs a suite of tools. “One needs to both provide the 3D graphics capabilities… the one with the server-based community” and “provide the UGC and PGC tools that the game companies need,” explained Mitchell.
“So while social networks such as Meta itself and Snap have the most capital resources, they also have a good amount of work to do,” he added.
Another iteration of the path could be “real-world experience but augmented by augmented reality and virtual reality,” noted Ma.
Mitchell reckoned user-operated communities “that already have a high degree of functionality technology bots,” such as Discord, could move “from a text and image basis to more of an immersive video basis.”
How competent is Tencent to carry out these three plans? The company believes it’s equipped with the right talent and technologies.
“The driving force [of metaverse] will still be software-driven and the technology that really helps us to provide the user experience, be it engine technology, be it the ability to provide better, real experience, high-fidelity experience across many — a large number of concurrent users, AI technology, for example, in order to customize the different experience for different people,” said Martin Lau, president at Tencent.
The company didn’t share a timeline for when its metaverse will materialize, but Lau admitted it will “probably take longer than people expected and would probably need a number of iterations.”
How about an Oculus counterpart for Tencent? Lau believed “hardware will probably be an assisting condition but not the necessary condition” for metaverse.