China: Virtual Red Star Rising

I don’t know if you are aware of the various virtual world activities that have been taking place in China in the last several years… if your not – you should be because there is one gargantuan virtual project that has the potential to “rock” the status quo of western economies and transform product development, sourcing, distribution and retailing on a global scale.

Chinese Second Life Competitors

There is an excellent review and detailed comparison of the two primary Chinese Second Life competitors, Hipihi and Novoking in the Masters of the Media blog post dated 10/24/07 by Pieter-Paul Walraven  titled,  Virtual Worlds in Modern China.

Novoking allows users to integrate popular 3D graphics software like Maya and 3DMax. Hipihi as lots of features and a fast learning curve compared to Second Life. It’s going to be interesting to see how the Chinese government regulates virtual worlds.

The Paul Walraven post has multiple links to additional sources for both Hipihi and Novoking.

Linden Lab entered into an agreement with RTMAsia recently to have RTMAsia act as direct representatives for Linden Lab in China, responsible for the development of business partnerships, management of business operations and liaison with media and industry bodies.

VIRTUAL RED STAR RISING: CRD

The Beijing Cyber Recreation District is the one gargantuan virtual project that has the potential to “rock” the status quo of western economies. There have been posts about this project since the beginning of 2007. This virtual mega project currently underway in Beijing incorporates partnerships between private industry and the Chinese government. I guess government “partnerships” are the way the Chinese government will solve the virtual regulation issue.

The Beijing Cyber Recreation District is the “online counterpart” to Beijing’s China Recreation District (CRD), a real-world mega-project that will boast entertainment and shopping; the center is set to open in time for the 2008 Olympics, according to the AP, the Beijing Cyber Recreation District with support from the Chinese government is currently undertaking the worlds largest (80 square kilometer complex) virtual world development. As of 11/26/07, over 200 game and multi-media content producers were currently working on site in western Beijing.

According to an article in the Virtual World News 11/26/07 titled, “China’s Grand Virtual Worlds Plan – A First Hand Look.”

“The CRD’s goal is to create a virtual economy providing infrastructure and platforms through which any business – not just those based in China – can come in world and sell their real-world products and services.  While a concerted effort will be placed on bringing Chinese businesses and consumers in world, the effort is worldwide and open to businesses and consumers from any country.  The entire project is expected to launch in June 2008.”

Here is a link to an article from Gigaom titled, “Chinese Government Gets Into Virtual World Business,” by Wagner James Au, 11/27/07 that has more information on the project.

An article in Computer Weekly titled, “China uses virtual worlds to transform business,” by John Riley, posted 11/02/07 states that the CRP project currently underway in Beijing plans:

“- to use virtual worlds to supply customized goods to consumers across the globe. So far 200 manufacturers have ­located to the physical CRP site, ready to receive orders from virtual world customers when the project formally opens next summer, prior to the Beijing Olympic Games.”

Clothing manufacturers will be the first group to offer the service. On 11/14/07 it was announced that the CRD signed Berkam Group, one of the world’s largest clothing makers and the first entrant into the Virtual Economic Zone.  The CRD is committed to developing an open, secure and accessible environment that can easily handle currency conversions. Wow this is really a big deal that can totally transform product design, development, sourcing and supply chain.
The article the goes on to say:

“Swedish companies are leading the way in collaboration. Paynova is providing international online payment services, and MindArk, which produces the Entropia Universe virtual world, is helping provide a virtual world infrastructure. CRP is also working with MasterCard, Visa and the China Everbright Bank to build a financial platform, and with suppliers including IBM.”

Gemma Simpson in her article titled, “China’s virtual plans are out of this world,” 06/06/07 in silocon.com states:

“An estimated 10,000 jobs will be created in China on the back of this deal, with staff working from home inside the Entropia Universe.”

According to an AP article in MSNBC, 10/15/07 titled “China plans virtual world for commerce,” the Beijing CRD will evolve into a “far bigger” version of e-bay.

In fact, the CRD founders state that this virtual world project “will help the manufacturing superpower evolve into an e-commerce juggernaut.” Whew, that is a scary concept because a “juggernaut” is a force that is unstoppable and will crush everything in it’s path. Read that last sentence defining a “juggernaut” over – slowly – several times.

A primary goal of the project is to promote just-in-time manufacturing and to get rid of the middleman by providing “direct links between tens of thousands of Chinese manufacturers and millions of individual customers around the world. “

In the AP article in Linexinsider by Rachel Konrad posted 10/27/07 titled, “China’s Virtual World Plans,” Chi Tau Robert Lai, chief scientist of the virtual world states that the ambitious Beijing CRD virtual world project,” in addition to connecting factories with people outside China, the project will allow businesses outside China to tap the nation’s burgeoning middle class.”

The Victor Keegan article I posted earlier from the Guardian  titled, “Virtual China looks for real benefits,” expresses concerns about what will be left for the western world to do to generate $$$ if this Chinese virtual world directly connects  manufacturers to the consumer and eliminates the middle man.  Right now the western worlds are benefiting financially from huge wholesale and retail markups on Chinese manufactured goods. I have to be honest – from the individual point of view as a consumer and from the perspective of an entrepreneur this is exciting news but what effect will this have on the overall western economies? I guess we will all have to adjust to the transformational changes this project has the potential to trigger. There are some cynics out there regarding the feasibility of success with attaining the CRD goals but I have absolutely no doubt at all that the Chinese will succeed in all of the goals (including Interoperability, secure virtual ID and open access) they have set out for this virtual mega-world project.  One thing I do know is that the US economists and pundits either are in a state of denial or they have absolutely no understanding about the transformational impact this virtual project can have on the current world status quo. They also consistently underestimate China’s strategic long-term focus – they are deluding themselves.

The Chinese Virtual world, “now under construction, will have all the infrastructure (server farms, communication links, electricity, banking links, logistics etc) needed to make this the world’s one-stop shop for consumers and producers.”

The Keegan article goes on to state that the current planning is for 150 million avatars and 7 million on at any one time but planning is underway for “billions of avatars” that will eventually be supported. Seven million avatars on at one time totally blows away the current Second Life capacity of about 40,000 at any one time.

According to the CDR.GOV.CN site on a 11/08/07 posting

“The fast growth of the virtual world industry drives lots of governments in the world thinking that to own the key technologies of virtual world will be the quickest way to become the winner of international economy in the future. ‘China Virtual Economy District’ has provided an idea of a brand-new business model of virtual world industry to help traditional enterprises become virtual enterprises easily.”

The implications and impact of this Chinese virtual world currently under development will have on western economies cannot be overstated, The ultimate goal is to repeat in the virtual world what China has already accomplished in manufacturing!

reBang has an excellent post on this subject titled, When Retail Goes Virtual.

The next Virtual Worlds Conference will be April 3-4, 2008 in NYC.

Virtual Worlds Management Industry Forecast 2008