Craze? Fad? Bubble? The creator economy rises

Hair, lips, eyebrow and headwear... Not a single detail escapes the attention of Wang Lei, a 30-year-old pet groomer from Xi'an, Shaanxi province, who also creates popular digital avatars for the metaverse that sell like hot cakes on Soul, a Chinese social networking platform.

It's probably more accurate to describe him as an avatar producer, a line of creative work that can pull in up to 45,000 yuan ($7,080) a month, or three times what he makes as a pet groomer.

So, here it is, the first glimpse of possible careers emerging from the rise of the metaverse. Typically, avatar creators design different kinds of, well, avatars and sell them to users who would like to pay for their "be-likes". The metaverse is basically an immersive virtual world that combines technologies like virtual reality and augmented reality.

It might be fair to say a new creator economy is on the rise in China. In a sense, avatar is a form of content, so content creators in the sphere of the metaverse monetize their creativity and interact with users in ways that cannot be achieved in the physical realm. In the metaverse, users will be able to access their favorite content easily.

Such a business model is quite similar to that of Roblox from the United States, one of the most successful metaverses. It is actually the application's 9.5 million developers that built out and created different experiences, avatars and games in its metaverse.

"Creating avatars helps creators to convert hobbies, personal expressions and creativity into profits and gives birth to new professions like that of avatar creator," said Che Bin, vice-president and product manager of Soul.

Latest data from Soul showed that over 80 official creators of the platform created 23,000 avatars, from the end of June to end of November last year.

Currently, these avatars are divided into a price range of 180, 300 and 420 Soul coins, which are equivalent to about 30 yuan, 50 yuan and 70 yuan, respectively. There are also limited editions of avatars that are sold from time to time, for about 15,000 Soul coins each.

Another creative artist surnamed Bao told China Daily that working as an avatar creator is like taking on a flexible job－it feels "free" as creators only need a smartphone to earn money without even stepping out of their home, especially when the COVID-19 pandemic is still rampant worldwide.

Thanks to the new business model, Bao, who is a fresh graduate, earned a monthly income of close to 40,000 yuan on the platform at the maximum. "With the pandemic still affecting some sectors in an uncertain way, an immersive online gathering offers a good alternative for us students."

Che from Soul said the creator economy would spur innovative business models and new monetization avenues, as users continue to invent and inject vitality.

"More importantly, it has become an important platform for users and creators to build an ecosystem, which furthermore will drive the diversity of the virtual platform and its sustainable development," Che said.

Every weekend, consulting psychologist Miao Xiaoxian creates a group chat room where she analyzes people's personalities by analyzing their avatars, or personas, as she believes that people tend to use an avatar to hide their "real selves".

Miao said her analyses became popular among the online audience, who then sought her psychological counseling on the platform, earning her 200,000 yuan last year.

Industry experts said the market potential will grow, given the strong demand for personalized avatars and unique purchasing trends among the young generation, especially the Generation Z－consumers born in the mid-1990s and the early 2010s.

According to Soul, consumers who would like to buy virtual avatars mainly come from first- and second-tier cities. They accounted for more than 44 percent of the total users. Notably, the majority of such consumers are aged between 18 and 27.

A report by internet-based firm Sina found that more than 63 percent of the Gen Z surveyed have a strong interest in the metaverse.

They are eager to experience cutting-edge technologies like VR and AR, tactile glove and digital human in the metaverse. Up to 26 percent of them even want to keep a pet in the virtual world, the report said.

"Generation Z is expected to become the new consumption power for the emerging digital market. Their way of information acquisition, consumption and living methods have been embedded with distinctive internet characteristics," said Qiao Yu, deputy head of the Artificial Intelligence Media Research Institute of Sina.

"People enjoy the convenience of rapid technology development; they are also advocates of smart life. Generation Z have a richer experience with technology products and are more willing to buy and apply smart devices in daily life."

Industry insiders said the new creator economy is estimated to see double-digit, perhaps even tripledigit, annual growth, in the next few years, due to the booming metaverse development in the country.

Currently, local tech giants such as Baidu Inc and Tencent Holdings as well as startups all vie for a slice of what is seen as a potential trillion-dollar pie over the next few decades.

In December, Baidu launched its first metaverse-related app, Xirang, which translates as land of hope. The app allows 100,000 users to join and chat with each other in a three-dimensional VR conference simultaneously.

When the music platform of gaming giant NetEase made its debut on the Hong Kong stock market in December, the company also held what it claimed was the world's first metaverse listing ceremony through Yaotai, its immersive activity system.

He Chao, secretary-general of the metaverse industry committee at the China Mobile Communications Association, an industry organization based in Beijing, said the metaverse is a sound space that can integrate with more content produced by users and social interaction, and promises actually a business model for content creators.

"The metaverse can realize the integration and interaction of the human, digital and comprehensive brick-and-mortar world. It can enable users in the virtual world to be more real and more diverse," He said.

"The next decade will be a golden era for the development of the metaverse. But the current global metaverse applications are still nascent. Companies and users are expected to understand, use and enjoy it in a rational way."

Bloomberg Intelligence forecast the global metaverse revenue opportunity is expected to approach $800 billion by 2024, which will be a huge increase from $500 billion last year.

The primary market for online game makers and gaming hardware may exceed $400 billion in 2024 while opportunities in live entertainment and social media make up the remainder, Bloomberg said.

However, Sun Jiashan, a researcher at the Chinese National Academy of Arts, said the metaverse, as a new capital market darling, has been so overhyped that it may spawn many equity bubbles.

"China needs to remain on high alert against financial speculators trying to cash in on the metaverse craze, not least because such actions could disrupt the efficient allocation of resources, hinder the cultivation of talents, and harm industries. This is all the more important as China is taking strict measures to curb monopolies," said Sun.

"Since the real reason why capitalists are hyping up metaverse has been exposed, the Chinese authorities should remain calm and prepare to effectively deal with a potential metaverse bubble," he said.

chengyu@chinadaily.com.cn