After being away because of a pandemic, the best tech show in the country came back. For example, the most popular booth looked like it had been transported from the early 1990s. Hundreds of high school students were waiting to use a virtual reality headset to climb neon-colored walls in a dream world. Branding: metaverse.
Japan may have an advantage in creating immersive online worlds because of its love of anime and virtual idols: Hatsune Miku and Kizuna AI are two Avatar-style YouTube stars who have a lot of fans. Metaverse supporters think that the fact that people love digital versions of things is a good sign for the future.
It is hard to explain what the word “metaverse” means, but it has to do with online technologies like shared virtual reality experiences and augmented reality services that put images on top of video feeds from the real world. Some people say that online video games like Fortnite, Roblox, and Animal Crossing: New Horizons are also part of the metaverse.
In any case, the goal is to create a place where people want to spend their time and money, but that seems like a faraway dream right now, especially since Japan offers its own cautionary tale.
Chance?
The next big thing is the metaverse, which brings together social media, games, and other electronic platforms. Bloomberg Intelligence said it could reach $800 billion in 2021. (108 trillion).
The Japanese government is open to this idea, and the economy ministry has opened a policy office for Web3 and the Metaverse Trial Space. Web3 is a vision for a new, distributed form of the internet based on the technology that powers cryptocurrencies. Prime Minister Fumio Kishida promised to grow metaverse services in a speech to parliament.
Japanese companies are trying to make money off of people’s love of avatars and virtual worlds at home.
At CEATEC, Metaverse Expo Japan hosted a space with about 15 exhibitors. These companies ranged from new ones to ones that have been around for a long time.
Hikky, a VR and AR company in Tokyo, has Vket. It’s a big online event that can be reached through browsers or the VRChat platform. It shows off a wide range of virtual places with a lot of detail. Many places in fantasy look like Tokyo, Paris, or Rio.
In all worlds, users can play as anime girls with big eyes or other fantastical characters. They can play games, dance, and move from one world to another while seeing real-world commercials. For first-timers, the metaverse can be scary, and if you’re not used to wearing headphones, it can even make you feel like you’re going to fall.
The Eiffel Tower, Mary Quant cosmetics, and the Daimaru Matsuzakaya department store are all places where people can buy anime princess avatars.
Over a million people went to Vket, the largest VR event in the world. Hikky also holds the Guinness World Record for having the most booths at a VR market.
Early in 2022, Hikky’s first big investment round brought in $7 billion, which was a lot for a Japanese company. No one knows how much brands have to pay to be on the platform.
At its 2022 winter Vket, 70 companies, such as Yamaha and Mitsubishi UFJ Morgan Stanley Securities, and 540 creators will show off and sell their work.
The Environment Ministry and the city of Yaizu, which is in the Shizuoka Prefecture, are taking part.
Sony, another participant, has started working with Hikky to develop the metaverse. The gaming giant’s Mocopi is a wearable 3D motion capture sensor that lets an avatar copy the user’s movements.
Mobile phone companies NTT Docomo and SoftBank Corp. were also at the CEATEC metaverse booth. So were companies from the printing industry, which seemed a little out of place at first.
Toppan Printing showed off metaverse services for businesses. One was MiraVerse, a virtual space that can show conference rooms, museum galleries, car showrooms, and castles that look just like photos. MetaClone lets people use their own faces to make 3D animated avatars. Both services are offered for money.
“From the beginning, Toppan has been a printing company that helps clients share information. This grew into videos and digital marketing,” says Masanori Kobayashi, who works in marketing for Toppan. “The metaverse is the latest change in how people communicate.
Avatar land
Japan’s complicated relationship with social media and its love of fictional characters like Doraemon and Hello Kitty could help the metaverse grow in the country.
Matt Alt, author of “Pure Invention: How Japan’s Pop Culture Took Over the World,” says that Japan is in a unique position to take advantage of metaverse-style experiences because of its character culture.
People in the country don’t trust each other, so they choose to be anonymous on social media. In a white paper from 2018, the Ministry of Internal Affairs found that more than 60% of people polled in the U.S. and U.K. said they could trust people they met online, but only 12.9% of people in Japan said the same.
This may not be surprising, since the first stories about the growth of the internet in Japan were mostly about crime and gave it a dangerous feel. So, it made sense to stay anonymous online and maybe use a cartoon name.
“Create your own character and go live! Reality is free virtual YouTuber software in the style of Metaverse. Its slogan is “Your identity stays private!”
The site has 3D avatar entertainers in the style of anime to help connect virtual celebrities with their fans. In this online community, people can change their avatars, send virtual gifts to famous people, and hang out with their friends.
The focus of reality is shared
“Hikky’s Virtual Market was made because many VRChat users wanted to be able to show off and sell their avatars,” says CEO Yasushi Funakoshi. “VRM, a common format for avatar data in Japan, has led to a lot of different avatars.”
Meta Platforms, the company that owns Facebook, has a branch in Japan. At their booth at CEATEC, there was a long line of people waiting to put on a Quest headset, grab some controllers, and talk to an avatar of a potential business partner. Meta Platforms also sees potential in Japanese pop culture.
“Japan has a lot of intellectual property, and avatars have been popular there for a long time,” says Ryuhei Ogawa, director of mobile partnerships for North Asia at Meta. “This makes the transition from 2D to 3D a little bit easier than in other countries.”
Back to the future
People in Japan and other places who like online communities know about the metaverse, while older virtual worlds show their limits and flaws.
Meet-me, an online interactive simulation of Tokyo made in Japan, used the word “metaverse” in 2007 before it became trendy.
It was a recreation of Tokyo Station, the building where the city government is located, Shibuya 109, trains, subways, and other famous places. Meet-me was a safer, G-rated alternative to Linden Lab’s four-year-old Second Life. Avatars and homes in the game were made to look like anime characters.
“Like Disneyland, this will be a place where people can have fun and feel safe,” said Kunimasa Hamaoka, CEO of Transcosmos.
Meet-me was successful enough to attract brands like Toyota, which set up a showroom where customers could try out virtual cars and the Winglet, which is like a Segway. Some people didn’t have enough experiences to want to come back. After more than 10 years, Meet-me was shut down on January 31, 2018.
A Meet-me and Second Life user who goes by the online name “mouse dell” and spoke on the condition of anonymity said, “It had a sense of playfulness and comfort created by the subtle inconveniences and lack of purpose, as well as a system that facilitated communication and temporary content. I especially liked the fact that users had less freedom than Second Life and the modern metaverse — I felt like I was able to be a virtual being free from reality, not bringing any real attributes into the virtual world.”
Mouse Dell spent a lot of time on Meet-me making long-lasting, close friends. Even though the service stopped years ago, many of these friendships are still going strong on Second Life and Twitter.
Serkan Toto, CEO of the game consulting company Kantan Games in Japan, thinks the idea was ahead of its time. Meet-me, unlike today’s metaverses, didn’t let people make their own content or virtual creations.
“Interesting vision, solid execution, but no thought-out long-term planning.”
Risky business
Mark Zuckerberg, CEO of Meta, talked about the metaverse as a replacement for social media and the mobile internet in a 2021 video. This started the hype cycle. This year, Zuckerberg is likely to lose more than $10 billion on his huge bet on metaverse research.
Meta’s stock has dropped, and the company has fired more than 11,000 people. Analysts think that Meta could become another IBM or even fail.
Paul Cohen, an Australian technology strategist who lives in Tokyo and has been using Second Life for a long time, says of the current generation of services, “The devices are still too heavy, and the resolution is not what it should be for them to be a viable substitute for a full day’s work in front of flat-screen devices. This dream of the metaverse for everyone is years away.”
VR and AR metaverses are useful for designing cars together and fixing planes, but most people aren’t likely to use them. Cohen talks about the most recent Gartner Hype Cycle, which is a ten-year forecast of disruptive technologies that includes the metaverse.
“Second Life has been a survivor, kind of as an under-the-radar, $650 million-a-year (gross domestic product) ‘failed business,” says Cohen.
Japan also has problems.
Yushi Okajima, a professor at Chuo University’s Faculty of Global Informatics, says that Japanese companies are easily outdone when it comes to building platforms. Platforms give foreign Big Tech companies economies of scale that allow them to dominate.
Japan has the upper hand when it comes to the metaverse and platform content. Okajima says that the Japanese anime and game industries value worldviews and characters that are like those in anime. But Japanese companies, which are known for being badly run, haven’t been able to take advantage.
“Since this is also a field where China, Taiwan and Vietnam are rapidly playing catch-up, I don’t think Japan can maintain its advantage for long.”
Toto says that Japanese metaverses don’t work or look good. He says that these homegrown simulations are threatened by platforms from other countries.
Toto is worried that Hikky and other Japanese companies that focus on metaverses for an audience in Japan will fail, just like homegrown social networks. “I believe that in the end, just like Facebook eventually beat Mixi on its home turf back in the day, international metaverses will use their scale and clout to dominate Japan as well.”
Japan’s best chance in the metaverse market may be to give these online worlds raw cultural materials.
Alt believes that “I don’t think the future is going to be made in Japan, it’s going to be made everywhere else with sensibilities borrowed from Japan and that’s a double-edged sword for Japanese creatives.
“It means there’s a hunger for, say, Hello Kitty or ‘Gundam’ or ‘Demon Slayer’ avatars/items in a metaverse-type setting. But whether Japanese companies have the imagination and ambition to be the ones who develop those digital products is another matter.”
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