Profound Implications

JPMorgan has said that the metaverse will have “profound implications” for China and will affect gaming, advertising and e-commerce, according to a report from the New York City-based investment bank published recently.

This could benefit companies such as Tencent, NetEase, Bilibili, Sea, Krafton and Bandai Namco, important Chinese internet and entertainment stocks.

The report also said that the digital world will offer an improved user experience across various internet business models, leading to increased user penetration and average revenue per user (ARPU), also suggesting that the Metaverse could triple China’s online-gaming market from the current $44 to over $130 billion.

The investment bank also noted the metaverse “could digitalize everything in the long term,” with estimates at a $4 trillion total addressable market (TAM) for the metaverse in China from “converting offline consumption across physical goods and services.”

Tap into Services

A group of analysts, led by Daniel Chen, claims the metaverse could “help internet companies tap into business services and potentially double the internet time spent”, with a TAM of $27 billion in China for business services and software in the virtual realm.

The bank noted that the development of the metaverse will also have a notable impact on the entire technology, media and telecom (TMT) ecosystem.

JP Morgan also commented that headwinds to the development of the metaverse include regulatory risk around data security, and the technological preparedness and affordability of virtual reality (VR) and augmented reality (AR) devices, the network environment and AI.