China’s largest brokerage says the metaverse will be popularized in two decades

China’s largest brokerage firm, CITIC Securities, said in a research report the metaverse will enter an exploration stage in the next three to five years and could become a way of life in 20 years.

Fast facts

• The report said the development of the metaverse can be divided into three stages. The first stage will be completed in the next five to eight years, as a series of virtual reality platforms and games on social media will roll out. The second stage will appear around 2030. Some real-world behaviors, such as education, meetings and work will happen in the virtual world; the economic system of the metaverse will be established during this stage. The third stage will appear after 2030. For this stage, the separated virtual platforms will be connected through a standard agreement to form a more extensive system.
• The report says games and social networking may be the starting point for the metaverse. Still, the most worthwhile investment in the medium and long term lies in companies with technological and market advantages, such as GPU manufacturer Nvidia, and graphics engine companies Epic and Unity.
• In addition, companies with high-speed communication infrastructures such as cloud computing, Internet Data Center (IDC), 5G, and low-orbit satellites will benefit from the metaverse development process for some time.
• For the software, the report says the first breakthroughs may come from tech giants such as Tencent, ByteDance, Facebook, and Baidu, in the fields of gaming, social networking and advertising. 
• CITIC Securities is the largest brokerage firm in China, which topped the list of brokerage scale with 810,259 billion yuan (about US$125.68 billion) in 2020.
• Chinese technology companies are getting involved in the metaverse. On Aug. 29, ByteDance acquired Pico, a leading VR equipment company, at a price of RMB 9 billion (about US$1.39 billion), which was regarded as a signal to enter the metaverse market. Tencent became the China’s distributor of the Metaverse sandbox game Roblox in 2019.
• VR devices are rising along with the metaverse as an entry to the virtual world, and China’s VR equipment manufacturers are benefiting from the trend. One of Apple’s supply chain manufacturers, Goertek, in its semi-annual report in 2021, shows the revenue from smart hardware business led by VR equipment accounting for 37.01% of total income, and increased by 210.83% year-on-year, reaching 11.210 billion yuan (about US$1.74 billion). Meanwhile, another company that provides components for Facebook’s VR device Quest2, Suzhou Anjie Technology, said the company’s VR equipment business volume in 2022 is expected to be more than twice that in 2021.