Baidu defeats Yuanverse

Roblox once pointed out that the metaverse needs to have 8 key characteristics-identity, social interaction, immersive experience, low-latency communication, diversity, anywhere, economic system and civilization. Baidu's Xirang is obviously still far away from these eight requirements.

Author | Xie Zefeng

Source | Juchao WAVE

When the Yuanverse collapsed, it was also the day AIGC rose.

The trends of senior executives of large companies directly reflect the changes in the industry. Recently, Ma Jie, the former vice president of Baidu and head of "Xirang", resigned from Baidu and moved to the Innovation Factory, where he immediately established the AIGC company "Beijing Zero One Thousand Things". It is rumored that Ma Jie may be invited to participate in the preparation of Project AI 2.0 led by Kai-fu Lee himself.

As the founder of the first Yuanverse product in China, Baidu went from "Xirang" to Wen Xinyiyan only 444 days apart, and Robin Li quickly turned around and began to launch a fierce attack on large AI models.

The Metaverse, a business that has been heavily promoted in public over the past two years, had been gradually marginalized before the core person in charge left. It is reported that although the "Xirang" team has not been disbanded, its future is currently unclear, and some personnel have transferred or resigned.

As Ma Jie responded in the circle of friends, "it will take at least 5 years for the Metaverse". It is difficult to open the closed business loop, and the rapid collapse of NFT assets such as Metaverse real estate also confirms this statement.

Ma Jie’s circle of friends responds to resignation

The business prospects are unclear and computing resources are insufficient. Rebuilding a social network with XR as the entrance is an extremely huge project. What changes this parallel world built in the virtual universe will bring to the real business society is still a huge mystery.

What's more, there is currently no company that can operate such a complex and huge virtual world.

To this day, the once popular Metaverse has not even gone through the "three-year itch", but it has been photographed on the beach early and has become a front wave that no one cares about.

The craze cools down and the industry stalls

The time span from the heavy warehouse of the Metaverse to its demise was just over a year.

As popular as ChatGPT is now, the Metaverse is miserable.

Ma Jie has led the team to create "Xi Yang" since 2020, aiming to solve the plight of people being unable to meet face to face during the epidemic. One year later, on December 27, at the Baidu AI Developers Conference, the Metaverse product "Xirang" was officially released. Baidu positioned it as "an immersive virtual space parallel to the physical world."

According to Baidu’s official news and Ma Jie’s external statement, Xiyang has completed more than 120 commercial projects, covering more than 20 fields such as cultural tourism, art, automobiles and consumption, and “achieved hundreds of millions of yuan in revenue.”

At the beginning of this year, Baidu also launched a new product based on Xi Yang - "Xi Yang Metaverse Base MetaStack", which is equivalent to a tool that can quickly create a Metaverse world.

However, on May 19, 2023, Ma Jie, the founder of Baidu’s Yuanverse business, resigned from Baidu and joined the AIGC camp. Although he said that "the metaverse still has a bright future, it's just that it's not the right time," he has shown his true thoughts with practical actions.

The main creative director has left, and Baidu Yuanverse is at risk of shutting down. From heavy investment to being on the verge of marginalization, the time span is just over a year.

Baidu was also infatuated with the Yuan Universe. But what’s embarrassing is that, on the one hand, after a period of verification, it can be seen that the demand for both B-side and C-side is not strong, and many people are just temporarily interested or trying it out; on the other hand, due to technical constraints, the current The Metaverse is only a crude, preliminary version.

Ma Jie once said frankly that the current metaverse still needs to overcome the challenges of three mountains: visual, auditory and interactive technology. It is still far away from Spielberg's "Ready Player One"-style imagination.

Xirang’s download ranking in major app stores is low, and data shows that its performance in social apps is average. In the Apple App Store, Xirang's rating is only 2.3, and he was even criticized: "The game modeling ten years ago was better than Xirang, and World of Warcraft beat Xirang instantly..."

Source: Apple App Store

Duoduo has put many companies into a situation where they are trapped in a cage. Many products are actually "self-concealed metaverses", which are quite far away from the true metaverse.

In terms of user reputation, Xirang has encountered obvious doubts.

Some people think that Xirang only has one virtual image, and it is more about showing users the novelty of technology, and does not have interesting interactions and social functions. Some users reported that Xirang’s operations are complex, the content is monotonous, the interactions are cold, and the experience is poor, “Xikrang is an empty and extremely boring virtual world.” (This comment is quoted from "Metaverse" "A Brief History" article "Baidu Yuanverse Dream Broken? The resignation of Ma Jie, the head of Xirang business, caused internal shock" by Fun, the manager)

Currently, it is difficult for the Yuanverse business to open up the commercial closed loop, and its monetization ability is poor. What's more, various resources, including computing power, are already limited. After turning to AIGC-related businesses, Baidu is even more unwilling to invest more resources in the Metaverse.

Faced with the wave of the AI ​​era, Robin Li has stepped into the game and taken the lead personally. He has publicly declared many times that "big models have changed artificial intelligence, and big models will change the world." Under the general trend, the investment is huge and the returns are far away. It is reasonable for the indefinite "Xirang" to be marginalized and even disappear eventually.

Interestingly, when Ma Jie first became the head of Baidu Yuanverse, he also said boldly: "I am willing to give everything I have for this."

Market segment, total collapse

Social interaction is the foundation and core of the metaverse world.

The connotation of the Metaverse is too vast. VR/AR equipment, games, social networking, NFT assets, Web3... have all been regarded as its landing scenarios and channels for commercial realization.

Now, all the above-mentioned subdivisions are in danger of collapse.

VR/AR devices are the "entry" into the metaverse, but the IDC report pointed out that global AR/VR headset shipments in 2022 will be only 8.8 million units, a sharp 20.9% year-on-year decrease, far lower than previous expectations.

In the cold winter, META encountered embarrassment. ByteDance, which acquired Pico for 9 billion, was revealed to have laid off 20%-30% of its employees; Tencent’s game XR business will also change the hardware development path and make adjustments to the team...

However, the difficulties faced by XR equipment manufacturers have not been effectively solved for a long time due to the lack of content ecology, too niche target groups, and technology that needs to be perfected.

Global XR shipments are only 8.8 million units, and China’s shipments are expected to be less than 1.2 million units. Although the world of the Metaverse is huge, it cannot even open its doors to ordinary people due to low market sales.

Entertainment games were once regarded as the best landing scenarios for the Metaverse. After announcing the massive acquisition of Activision Blizzard, Microsoft CEO Nadella made no secret of his desire for the Metaverse: "The essence of the Metaverse is to create games."

After the industry pioneer Roblox went public, with the aura of "the first game stock in the Metaverse", the market value approached 80 billion US dollars in one fell swoop, surpassing Blizzard to become the game company with the highest market value in the United States. The stock price has continued to decline as Roblox's daily active users (DAU) numbers declined in March 2023.

Different from other metaverse game companies, Roblox is the creator of UGC platform (user-generated content). This model eliminates the high cost of game development and provides a platform for other game developers. According to its founder Dave Baszucki "Roblox is just a 'shepherd' for the users who create the Metaverse. We do not produce or control any content."

On the other hand, most of the domestic listed companies involved in the Metaverse have a single developer role, with single functions and limited value. For example, Zhongqingbao said that the so-called "metaverse" in "Brew Master" is actually "online brewing and offline wine picking", and its picture quality is more like a crude web game.

Zhongqingbao "Brew Master", picture source: Zhongqingbao official website

Tom Cat, a listed company, claims that the metaverse it realizes is realized using AR technology, and this technology is also used in the "My Tom Cat" product. But in fact, the IP of Tom Cat has been making money from advertising in the 12 years since its birth.

The metaverse craze lasted only a short time, but there are countless similar cases.

In fact, social networking is the foundation and core of the Metaverse world. From Facebook to Meta, Zuckerberg’s ambition is to reconstruct the social network. But today, Meta is expected to cost more than 150 US dollars, but in 2022 and the first quarter of this year, the Meta universe department lost a total of 17.72 billion US dollars.

Even with huge investments, Metaverse Horizon Worlds still falls short of expectations due to existing technology, computing resources, and the construction of a huge network. For example, whether in Horizon Worlds or Microsoft Mesh for Teams, the user's avatar does not have a lower body, floating in the air like the ghost of Hogwarts.

No wonder some users complained: Why don’t I deserve a pair of legs in the metaverse?

The reason is that the current AR/VR headset can track the head and hands and estimate the position of the arms and chest, but it does not know where the lower body is. Modeling the movement of the legs requires additional sensors, which are expensive and cumbersome. Due to technical and cost limitations, the Metaverse world had to "reduce" its lower half.

Meta MetaverseHorizon Worlds

This is still the case for leading companies. As a follower, the Yuanverse social app "Jel", which once topped the App Store download list in 20 days, has been removed from the shelves; the social app Party Island launched by Byte has ceased operations; Kuaishou's " The person in charge of Panoramic Video resigned and the project was suspended...

Fundamentally, these social applications are just Momo, Tantan or SOUL in the name of the metaverse. These products favor novelty over utility, often only visit once and lacking retention. Even Horizon Worlds has less than 200,000 monthly active users.

Coupled with the poor picture quality, laggy network and poor experience, users who try to play with something new will eventually return to traditional social software such as WeChat and QQ.

The slogan of ByteDance App Party Island is “Party Island, no one is an island.”

Nowadays, these metaverse worlds are like desolate and sad islands, no one cares about them and even disappear.

Yuanverse real estate speculator group, headed for destruction

"A rich man's game."

Yuanverse Virtual currency is simply a perfect financial “playground”.

Decentraland, the world's largest metaverse real estate sales platform, is actually a virtual "City of Desire". There are casinos with green tablecloths, luxurious art galleries, and dimly lit bars. , gaudy nightclubs and hidden sensual scenes. These scenes are modeled after the "Sin City" of the United States, Las Vegas.

In this virtual world, you need to trade using a token called MANA, which is a virtual currency running on the Ethereum blockchain.

With the rise of the metaverse and the support of entertainment stars, the virtual land in Decentraland exploded instantly.

MetaverseGroup, the world’s largest virtual real estate developer, purchased a piece of virtual land in Decentraland for US$2.43 million, setting an industry record. In November 2021, singer JJ Lin purchased three pieces of virtual real estate for US$123,000, also reaching his personal peak.

More than a year later, these virtual assets collapsed rapidly, and the average land transaction price in Decentraland fell from US$45 in 2022 to US$5, a plunge of nearly 90%. Previously, JJ Lin's three pieces of virtual real estate were worth only about US$10,000, a huge loss of 91%.

The currency system in the virtual world is about to collapse. The price of MANA has dropped sharply from a historical high of $4.4 to only 10%, and now only $0.48 remains. There used to be a lot of buzz, but now there are less than 20 daily active users. Decentraland seems to be completely "cool".

In China, Tianxiaxiu launched Rainbow Universe, which is similar to Decentraland, and Tencent also released the digital collection platform Huanhe. However, these virtual platforms have aroused nervousness among regulators. Shortly after the release of Hong Universe, the Shanghai Stock Exchange issued regulatory warnings to Tianxiaxiu Chairman Li Meng and Board Secretary Yu Yue.

Scams are rampant and chaos abounds in these virtual worlds. Some intermediaries charge commissions and then run away with the money, and trading virtual land may also be an important channel for money laundering.

And JJ Lin, Jay Chou, Yi Nengjing, New World Development Group CEO Adrian Cheng, etc. are involved. In addition to being curious, they can also get themselves involved in the technological trend and become more popular. These are just "rich people's games."

Looking at these virtual trading platforms, they are like a "casino" full of human greed. The gameplay is similar to that of Bitcoin. Under the guise of so-called "scarcity value", participants take advantage of the situation to make a lot of money, find a successor, cash out and run away. For example, there are only 90,000 pieces of land in Decentraland, and the platform promises not to arbitrarily increase the amount of land in the short term.

It can be seen that whether it is the entrance AR/VR equipment of the Yuanverse, or gaming entertainment, social networking, or even the virtual financial system that is easiest to attract capital, it has not yet found a stable business model, and there are even signs of complete collapse. .

As an Internet hard technology company that claims to be a leader in AI, the bulk of Baidu’s revenue is still online advertising. Robin Li urgently needs to build a technology-based business to support the facade of the next era, firstly to get rid of the label of "advertiser", and secondly, it is also the actual need of enterprise development.

However, the Metaverse, which has huge investments and slow returns and uncertain prospects, has been proven to be unsuitable and has become the target of active optimization.

Write at the end

Roblox once pointed out that the metaverse needs to have 8 key characteristics-identity, social interaction, immersive experience, low-latency communication, diversity, anywhere, economic system and civilization. Baidu's Xirang is obviously still far away from these eight requirements.

These are all doomed. The threshold of the Metaverse is too high, and today’s technological gap is like an insurmountable chasm. So after the advent of ChatGPT, Baidu did not hesitate to switch battlefields. After all, the underlying computing resources and technical requirements of the Metaverse are basically the same as those of AIGC.

People can find solace and a sense of accomplishment in the virtual world, but if they want to realize their business dreams in such a complex and grand metaverse, it is still difficult for META, Baidu and ByteDance to do so.

But if even these large and wealthy companies can't do it, who has the ability to cultivate this market?

At present, this wave of westward wind spreading eastward, with the once enthusiastic optimism and expectations of capital, enterprises and media, has completely gone silent. The metaverse of the future may bring new expectations to people, or it may not. What the world will be like in five years' time, at least we can't see this year.

(This article is for knowledge sharing only and does not constitute providing or relying on investment, accounting, legal or tax advice. Any investment decision based on this is at your own risk.)

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