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Despite a decline in projects in the Metaverse and virtual worlds, a recent report by DappRadar, a Web3 monitoring site, revealed that venture capital firms have invested $707 million in them since the beginning of 2023.
This indicates that despite the rise of meme tokens and artificial intelligence (AI) as predominant narratives, 43.68% of these investments have been in metaverse-related ventures. See below for full details.
Interest in the Metaverse according to analytics site Web3
As anticipated, interest in projects on the Metaverse continues to exist among some investors and venture capital firms that continue to invest millions in such initiatives since the beginning of 2023.
According to the aforementioned report published by DappRadar, the well-known Web3 monitoring site, interest in virtual worlds has declined significantly, with trading volume reaching $56 million in the second quarter, registering an 80% decline from the first quarter.
The report attributes this decrease to public interest shifting to topics such as meme tokens and artificial intelligence (AI), which have now become mainstream.
This, unfortunately, is also confirmed by the drastic reduction in funding raised by startups dedicated to this field.
According to Dappradar, the total funding received by metaverse projects since the beginning of 2023 stood at $707 million, representing less than 10% of the $7.6 billion raised by metaverse projects in 2022.
However, the metaverse continues to hold a prominent position in the Web3 environment, resulting in 43.68% of all investments in the sector, according to data presented in the report.
In which regions will the Metaverse thrive? DappRadar experts’ opinion
Despite the above news, DappRadar’s report identifies Asia, including regions such as Hong Kong, Mainland China and Japan, as a continent where the metaverse will thrive.
In fact, governments and companies are investing significantly in this sector and its development. Hong Kong is specifically cited as an international center of the metaverse.
This is due to the government’s commitment to creating an environment conducive to innovation, with the real estate and luxury goods sectors playing a significant role in this nascent metaverse industry.
Dappradar also notes that mainland China is one of the few countries to have formulated a ‘metaverse plan’ that includes the implementation of initiatives in the education and tourism sectors.
Not only that, Chinese companies such as Bytedance, Alibaba, Baidu and Tencent have invested in developing hardware and software for the metaverse.
Japan, recognized as a leader in entertainment and games, is also poised to benefit from the metaverse by integrating national intellectual property (IP) into virtual and augmented reality applications, such as in the case of Pokemon Go.
Will China lead the metaverse industry in 2023?
Although interest in the metaverse is waning globally, as we have seen, China is maintaining its commitment to become a leader in this industry.
In particular, according to a recent report prepared by Globaldata, a consulting firm, China is planning to surpass the West in terms of metaverse technology through continued investment in associated technologies.
The report states that China has attached significant importance to these connected technologies, enabling the country to emerge as a center for the metaverse:
“Growing emphasis on VR, AR, AI and 6G aims to overtake advances in the West and position China as a global hub for the metaverse.”
In addition, Globaldata suggests that there are signs of China’s continued commitment to investing in virtual reality and artificial intelligence, with the goal of promoting national economic development.
Indeed, several Chinese provinces and cities, such as Shanghai and Zhejiang, have already unveiled plans to become major technology hubs for the metaverse.
Although the metaverse is often associated with consumer software and hardware, the report suggests that the metaverse in China focuses more on industry and the benefits of integrating metaverse technology into its processes.
Recently, China’s Ministry of Industry and IT released a report on the application of VR and metaverse technology in industrial processes, demonstrating how the two can be combined efficiently.
Finally, according to Globaldata, the metaverse in China will be valued more than other technologies because of the many opportunities it offers.