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Exclusive丨Byte vs. Tencent Metaverse: Laying out the social networking product Pixsoul and launching the game “Restart the World”

The popularity of the metaverse has given rise to a new battle between internet giants.

Tech Planet exclusively learned that Byte Investment's Code Qiankun has recently officially launched the metaverse game “Restart the World”. Additionally, some sources told Tech Planet that Byte may be developing a metaverse social networking product “Pixsoul” to create an immersive virtual social platform.

However, just two months ago, Roblox, known as the “first stock in the metaverse,” landed in China and changed its name from Tencent to “Roblox” as an agent distributor. On the day it went live, it reached number one in the free game list on the Apple App Store. In March of this year, Roblox, an American multi-player online 3D creative community, went public. The stock price skyrocketed 54.4% on the same day, and the market capitalization reached more than 40 billion US dollars.

According to an industry source, Tencent and Byte participated in the competition to acquire VR manufacturer PICO. In the end, Byte spent about 9 billion yuan to acquire the metaverse concept company “PICO”. This is the biggest acquisition of VR circuits in China this year.

Actually, the metaverse is nothing new. As early as 29 years ago, in the sci-fi novel “Avalanche,” the author proposed the concept of the metaverse, believing that the “metaverse” is a huge fictional digital world. People use digital bodies to live in this world. This world is a parallel universe of the real world.

Recently, a movie called “The Uncontrolled Player” set off a wave of buzz around the world. The film tells the story of real-life players who go on adventures by creating virtual identities in the game. The film scored 9.1 points on the Cat's Eye and grossed a total of 117 million US dollars worldwide, making it the highest-rated adventure film of the year.

Behind the popularity of the movie, in addition to the compelling story, it was more important to introduce the concept of the metaverse. With the metaverse as the main story line, real players need to wear VR and connect to a computer to enter the “virtual metaverse world”. In this world, players can have a brand new identity.

Today, the metaverse has gradually begun to be implemented in people's lives from an early theory, and is mostly used in social networking, games, film and television content. Capital is also crazy about the “metaverse” concept, which has become very popular.

The metaverse is still in its early days, and the revenue and traffic it will bring is still unknown, but if everything in real life, including consumption scenarios, can be replicated, the profits it will generate will be very attractive.

Through Byte's acquisition of PICO, it is easy to see that both Tencent and Byte are very interested in the metaverse field and are laying out next-generation content interactive platforms around the metaverse.

Byte and Tencent compete for the metaverse, and Byte and Tencent meet on narrow paths

Race to acquire PICO, Byte, and Tencent $TENCENT (00700.HK)$ The battle for the metaverse has begun.

As far as Byte is concerned, the metaverse, as an early concept that has recently begun to be popular, is certainly a source worth investing in, because all parties are in the process of 0 to 1 and are on the same track, and it is not yet known who will die.

Gaming is an important manifestation of the metaverse. As early as 2019, Tencent formed a joint venture with the American metaverse game company Roblox, and used “Roblox” and “Fortnite” as the next two trump cards in metaverse games. Byte, on the other hand, invested 100 million yuan in domestic mobile game developer Code Qiankun in April of this year.

Judging from the game's positioning and release time, both game companies intersect.

“Robles” distributed on behalf of Tencent is positioned as a multi-person online 3D creative community integrating experience and development, allowing users to enjoy creating content and experience communication with partners in a virtual community and grow together. The main work of Code Qiankun by Byte Investments, “Restart the World” integrates creative content, entertainment experience, and social interaction, and is a platform for young people to create, entertain, and socialize.

“Robles” landed in China in July of this year. More than a month later, Byte Investment's “Restart the World” was launched on August 24, reaching the highest number 20 in the free game list.

Both parties were very coincidental, both in terms of positioning and release timing. But in reality, behind this coincidence is the year 2021, which the industry refers to as the “first year of the metaverse,” making early plans.

What is most appealing about the metaverse is that it introduces real-world operation logic into the digital world. Through social interaction, everyone can experience a special experience between reality and fantasy, and games, as a carrier, can highly recreate a virtual scene close to reality. This is the reason why Byte and Tencent are similar to this kind of game.

In addition, the games offered in this type of game are all made by their users. In “Robles,” fun comes not only from playing games, but also from making games. Many games are developed independently of the Roblox company; they are all developed by users of the platform. Currently, Robles' official website is proud to say that its users have created more than 20 million games.

In addition to games, socializing is also an important field of wrestling.

Soul invested by Tencent is a label that focuses on the “social metaverse for young people”. According to its definition, by completing a 30-second “soul test”, users can find peers with similar interests, freely express and recognize the world, and establish their own “social metaverse.”

Furthermore, Tencent's self-developed “cm show” can actually be seen as a low-profile social metaverse. It has now been applied to QQ as a way for users to socialize virtually.

On Byte's side, some sources told Tech Planet that Byte may be developing a metaverse social app called “Pixsoul” to create an immersive virtual social networking platform, or another attempt at social networking after flashing and flickering.

Judging from now on, the clash between Tencent and Byte in the metaverse is still at a stage of their respective development and planning.

Everyone has their own plans

Tencent and Byte are successively entering the metaverse circuit, and the logic behind them is not exactly the same.

Tencent has always been known for his keen sense of smell. Ma Huateng wrote in the internal publication “Three Views”: “An exciting opportunity is coming. After ten years of development, mobile internet is about to usher in the next wave of upgrades. We call it the full Internet.”

Some people in the industry believe that the full-scale Internet is the final form of the metaverse. If you enter the metaverse, you can get a ferry ticket to the next Internet era. For Tencent, which already has two major trumps in gaming and social networking, you definitely don't want to miss it.

However, judging from the current situation, Tencent is still experimenting with this new field by means of investment. It's a bit like investing in a major company back then and then making an acquisition. Byte is just the opposite. In order to catch up with Tencent, they chose to buy and develop their own all-in style of play.

Tencent's multi-year layout in the fields of social networking, gaming, and live streaming in the film industry has made it a relatively complete layout. Foreign media have produced a complete industrial map of “Tencent's Metaverse” (Tencent's Metaverse). Among these are not only games such as League of Legends, but also e-commerce shopping platforms such as Pinduoduo and Meituan.

Although Tencent's metaverse layout is comprehensive, in the field that best embodies the “metaverse” concept, it is still slightly underwhelming. Therefore, Tencent actively buys those relatively pure “metaverse companies.”

For example, in Roblox's $150 million G-Series financing in February 2020, Tencent already participated and exclusively represented the distribution of Roblox products in China. Earlier, Tencent bought 40% of Epic's shares. Epic, which owns games such as “Fortnite,” received 1 billion US dollars in financing in April, mainly to develop the metaverse. They even bid with Byte for the acquisition of VR company Pico, but in the end, they failed to do so.

However, through nearly ten years of development, Byte has established a leading position in the short video field. It owns Douyin with daily activity exceeding 600 million, but businesses other than short videos, such as education and games, have improved much for the time being. On the other hand, Tencent and Ali, which have a stronger heritage, have blossomed a bit more.

Byte urgently needs a new growth point. The metaverse may be a good choice as a new outlet of the moment.

If we talk about capital, the economic foundation determines the superstructure. Well, for products and projects, technology is an important support that determines the operation of the metaverse. Currently, technologies such as computing power, AI, AR, VR, 5G, and blockchain all support the metaverse.

Since there is a certain technical distance from major companies such as Tencent, Byte chose to fill the gap by investing in related technology companies. In addition to the recently acquired PICO, according to Tianyancha, starting in 2020, Byte has invested in artificial intelligence service provider Moore Thread, AI creation service provider Bailian Intelligence, and 3D vision technology solution provider Entropy Smart Technology.

Simultaneously deploy various cloud and AI technologies, directly acquire VR companies such as Pico at a high price, and develop social and gaming products such as “Pixsoul” and “Restart the World.” These actions all show that Byte hopes to strengthen its business through technology, and the construction of the metaverse is even more necessary.

Roblox CEO Baszucki said: “In the metaverse, first, users need to have an image of a virtual identity, which can be a rock star or a fashion model. At the same time, you can also socialize in the metaverse, which must be 'immersive'. With low-latency links, you can be anywhere, anytime. A large amount of differentiated content supports people's long-term interest, a safe and stable economic system, and ensures that people can live in the metaverse.”

This interpretation is currently the most thorough definition of the metaverse at this stage. Simply put, users can enjoy the thrill of real life in the virtual world, which is equivalent to replicating a real world in the virtual world, including consumption scenarios such as e-commerce and new consumption.

As far as Byte is concerned, it is possible not only to integrate one's own business into the metaverse, but also to create new businesses within this world. Under established rules, the metaverse is a promising way out.

Internet ferry tickets for the next ten years

PricewaterhouseCoopers anticipates that the metaverse-related economy will experience significant growth, and the market size is expected to reach $1.5 trillion by 2030. Benefiting from the metaverse concept, Epic's valuation doubled, Roblox's market capitalization increased tenfold a year, and Facebook and Microsoft's market capitalization broke the threshold of trillion dollars and 2 trillion dollars respectively. These events have fueled the “metaverse” abroad.

As dividends and traffic on most domestic internet tracks peak, the new trillion dollar market may be able to support sufficient room for Byte and Tencent to grow.

Roblox, the first in the gaming metaverse, has gone through a full 17 years from its inception in 2004 to its current launch. Compared to the “No. 1 Player” oasis, Roblox has only completed the initial definition of the metaverse concept, and there is still a gap between achieving a true sense of “immersion,” “low latency,” and “openness.” As can be seen, the construction of the metaverse cannot be completed overnight; this is even more true for Byte and Tencent.

Some people in the industry think that the ultimate goal of the metaverse may be “I can't tell whether it's a simulated world or the real world.” The development of the metaverse is a gradual process, and it will also have different content and forms.

In terms of people, clouds, computing power, latency, etc., the existing technology is insufficient to support the implementation of the metaverse.

A Tencent architect told Tech Planet, “Today's VR, AR, and MR want to solve the problems “shown” to us by the virtual world to some extent. Not to mention how effective it is, this interface can only provide visual and auditory information. Although sight and hearing provide us with most of the information, other perceptual abilities, touch, smell, and taste, are also key to our sense of reality in the virtual world. How to make our hands and bodies feel objects in the virtual world seems like an inexplicable question.”

Also, in terms of “computing power requirements,” there are differences between users. For example, in the metaverse, the user only interacts with a small area of the world around him, but what if he picks up a telescope or sits in a spaceship to explore the universe? Therefore, the computing power requirements of each user vary greatly.

Delay is also a major problem. From receiving user input to outputting the user's world around them, there can be no detectable delay.

As can be seen from the above, the basic design requirements of the Metaverse require not only “star star” computing power, but also huge flexibility and very small latency. The current evolution of technology is not that easy to solve.

Other issues to consider are how to reduce costs, how to cultivate talents, how to issue digital currency for future platforms, and how to break the independent ecosystem between major platforms, all of which will be issues that need to be solved in the future.

With the current technical background, the metaverse is still in its infancy. Whether it's Tencent or Byte, the current layout lays the underlying foundation for the construction of the metaverse, but as a ferry ticket for the next ten years, fierce competition among many parties is inevitable.

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