JP Morgan predicts that the Chinese Metaverse market could be worth billions

Analysts listed Tencent, NetEase, among others, as companies to gain the most from the Metaverse industry.
September 15, 2022 - Tom Peters

The Metaverse got so much more attention when the company formerly known as Facebook rebranded to focus more on the sector, even going as far as changing its name to Meta last year. Since then, the young industry has been touted to grow much larger in a few years by industry experts based on the widespread interest in the economy.


Meanwhile, analysts at leading investment and financial services company JP Morgan think we could see a boom in the sector, specifically in the Chinese markets. According to them, the industry could hit a valuation of billions, if not trillions of dollars, despite heavy restrictions placed on cryptocurrency by the Chinese government.


JP Morgan also listed Chinese companies that would benefit the most from domestic metaverse development based on their competitive edge in particular aspects of the industry, such as gaming and social networks.


Its picks include Tencent, NetEase, and Bilibili; the first two provide gaming, internet, and other related services, while the last is a video-sharing platform similar to YouTube. JP Morgan also listed other companies in Asia that could make money from the boom.


'Development of mobile internet and AI in the past 5-10 years suggests that a company's competitive advantage in one part of the tech ecosystem is often more important in determining long-term value creation to shareholders than which part of the ecosystem the company operates in,' said JP Morgan analysts in a report.


The analysts stated that gaming, intellectual property, and digitisation of business would be the companies' primary income sources as the metaverse develops. Although, the team also current challenges faced by metaverse development in the form of hardware and cloud computing limitations.


'We think 'perfect form' of the metaverse could take decades to achieve,' the analysts said. 'While we believe the [total addressable market] for the metaverse is enormous, we believe there are various technological obstacles to overcome.'




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