Asia seen as ideal market for rapid metaverse adoption

Photo: Pixabay

With 90% of consumers in the region using smartphones to access the internet and average app usage of over four hours a day, Asia is seen as an ideal market for rapid metaverse adoption.

The metaverse – dubbed as the next internet revolution – blends aspects of digital technologies including video-conferencing, games, cryptocurrencies, email, virtual reality, social media and live-streaming.

“Gaming readiness is one of the characteristics that make Asia the ideal metaverse adoption market. Most of the world’s gamers are located in Asia, and the region has a strong online and social presence. Gamers have a good understanding of virtual worlds and digital assets, which represents a powerful advantage for the region as it enters the metaverse,” Yat Siu, chairman & founder of Animoca Brands, told DealStreetAsia in an interaction.

Animoca – a leader in digital entertainment, blockchain, and gamification – has over 150 investments in NFT-related companies and decentralized projects including Axie Infinity, OpenSea, Dapper Labs (NBA Top Shot), Bitski, Harmony, Alien Worlds, Star Atlas, and others.

In 2021, there were almost 1.48 billion gamers across Asia, making the region the largest market for video gaming worldwide, with Europe taking the second spot. There are an estimated 3.24 billion gamers across the globe, according to Statista.com.

The metaverse market is estimated to be worth $800 billion by 2024, according to Bloomberg Intelligence.

“I have no doubt that Asia will be at the front of the pack in embracing the opportunities it offers,” Dan Neary, vice president of Asia-Pacific at Meta (Facebook) told Campaignasia.

Early adopters

Greater China and South Korea are emerging as the two leading metaverse destinations in Asia, a trend that is reflected in active deal-making in the sector.

In November, Animoca Brands unit The Sandbox, a gaming platform that allows users to build a virtual world using non-fungible tokens (NFTs), raised $93 million from investors led by SoftBank’s Vision Fund 2.

The Japanese investor also invested $150 million in Naver Z Corp., the operator of South Korea’s metaverse platform Zepeto.

In Greater China, the metaverse is believed to be the driver behind ByteDance’s acquisition of China’s largest VR-headset maker Pico Interactive in August, as well as its 100 million yuan (S$21.38 million) investment in Chinese Roblox rival Reworld in April.

Expand Table

Company Metaverse project/NFT GameDetailsFunding amount (US$)Investors
Naver ZZepeto Zepeto is a South Korean metaverse platform that sells fashion items for 3D avatars$150m Softbank Vision Fund 2
Sky MavisAxie Infinity Axie Infinity is an NFT-based online video game developed by Vietnamese studio Sky Mavis which uses Ethereum-based cryptocurrencies, Axie Infinity Shards (AXS) and Smooth Love Potion (SLP). $152mAndreessen Horowitz (a16z), Accel and Paradigm among others.
Animoca BrandsThe SandboxThe Sandbox, a subsidiary of Animoca Brands, is one of the decentralized virtual worlds that has been fueling the recent growth of virtual real-estate demand, having partnered with major IPs and brands including Snoop Dogg, The Walking Dead, deadmau5, Atari, Rollercoaster Tycoon, Care Bears, The Smurfs, Shaun the Sheep, and Binance.$93mLed by SoftBank Vision Fund 2. Other investors included Animoca Brands, True Global Ventures, Liberty City Ventures, Galaxy Interactive, Kingsway Capital, Blue Pool Capital, LG Technology Ventures, Alpaca VC, Graticule Asset Management Asia,...
Faze TechnologiesFaze Technologies is a startup that creates exclusive digital collectibles for cricket on public blockchains. Its mission is to build the metaverse for cricket. $17.4mTiger Global, Sequoia Capital India, Coatue, Dapper Labs, Samsung Next, Courtside Ventures, and Bow Capital.
MOBOXFounded in April 2021, MOBOX is a Hong Kong-based blockchain gaming ecosystem built on the Binance Smart Chain (BSC) that combines of DeFi Yield Farming and Gaming NFTs to create a free-to-play and play-to-earn GameFi Metaverse, the MOMOverse.-Binance Labs
Whydad Whydah was founded by Tri Pham, co-founder and CEO of KardiaChain, which claims to be a decentralised interoperable and self-optimised blockchain infrastructure platform in Vietnam and Southeast Asia.
$25mMorningstar Ventures, Hashkey, Eternity Ventures, Bitscale, Youbi, and others.

The metaverse has also received attention from the government and internet infrastructure providers. In May 2021, South Korea’s Ministry of Science and ICT created a “metaverse alliance” to boost the development of virtual and augmented reality platforms. So far, 500 firms including Samsung, Hyundai Motors, SK Telecom, and KT have joined the alliance.

China’s big three telecom carriers – China Mobile, China Unicom and China Telecom – have partnered with several tech companies to form the country’s first industry focus group on metaverse. Video streaming and gaming platform Bilibili partnered Tencent Holdings and NetEase to develop the metaverse.

In SE Asia, meanwhile, Vietnam, Singapore, the Philippines and Indonesia are expected to drive adoption as proactive communities are likely to get involved in early-stage metaverse projects and tokenomics.

Vietnam-based VC firm Lucky Ventures managing partner Cris D. Tran told DealStreetAsia, “there have been several projects from SE Asia going international… they have either integrated to reform their business model or followed the trend to acquire a wider funnel of the audience.”

The potential of Metaverse

Leveraging AI, AR/VR and blockchain, metaverse represents infinity in terms of physical space and experiences.

“We believe metaverse has the potential to be the next evolution of the internet and companies are racing to unlock the early opportunity,” Greg Moon, managing partner, SoftBank Investment Advisers said in a statement when the firm invested in Naver Z Corp., the operator of South Korea’s metaverse platform Zepeto.

As the metaverse goes beyond entertainment and gaming, global tech giants are betting on investments in the space.

Social networking giant Facebook took a step in that direction by rebranding itself as Meta, reflecting the company’s ambitions beyond social media. Facebook has spent billions of dollars to build the metaverse, recruiting 10,000 workers in the EU.

Microsoft is entering the race to build a metaverse inside Teams. Meanwhile, Tencent Holdings has registered two trademarks “Timi Metaverse” and “Kings Metaverse” to pave the way for the future of QQ messaging service and online game Honor of Kings.

The metaverse is changing the way people earn money, shop, or engage.

Blockchain-based games and NFTs have enabled the play-to-earn gaming model. Axie Infinity, a game developed by Vietnam-based Sky Mavis, is the perfect example of how metaverse can change things in the physical world.

During the pandemic, thousands of Filipinos took to the game, grew digital pets – called Axies – traded them online to make more money than they did in their real-life jobs.

“In rural Philippines, more people have a crypto wallet than a credit card,” Siu said at Business of Design Week (BoDW) 2021, noting strong metaverse adoption in the Philippines.

Hype or reality? 

The level of use of metaverse technology is “still in its early stages” with its focus limited to services providing cultural experiences.

While the metaverse is designed to show that a company is on the cutting edge of future technology, consumers have yet to fully embrace virtual-reality goggles or smart glasses in significant numbers.

Siu predicts that “by next year, we’re going to be hitting hundreds of millions of users. The growth is going to be just explosive,” he said at the BoDW event.

Siu also disclosed that Animoca Brands’ upcoming Phantom Galaxies project represents a space-based universe that will feature player ownership and governance.

“Our goal is to facilitate true digital property rights. These characteristics are what we define as the real metaverse,” he added. Siu believes that the ownership paradigm will be more broadly understood.

Vietnam’s Do Venture co-founder and general partner Vy Le believes investors are being exposed to the risk that the evolution of Metaverse core technology may not be on par with the growing number of users on it mostly for speculation. “Therefore, we do believe in the potential of Metaverse but will only focus on fundamental projects instead of following the trend,” she added.

Meanwhile, the value of crypto digital assets now stands at over $2.8 trillion, PwC Hong Kong crypto leader and partner Henri Arslanian said at the BoDW event.

With decentralized finance, people are able to borrow, lend and even buy insurance without intermediaries by leveraging the same technology that is making blockchain. “Some of these innovations we’re seeing in the broader metaverse,” Arslanian added.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.