Shunwei Capital Feng Zheng: How far are we from the "Metaverse" in "Ready Player One"?

Feng Zheng, Vice President of Shunwei Capital

Feng Zheng has extensive experience in the investment field and in-depth entrepreneurial experience. He is mainly responsible for investigating investment opportunities in the field of Internet trading platforms and corporate services. Before joining Shunwei Capital, Feng Zheng used to be the founder/CEO of the star enterprise "I Have Fan" in the field of food sharing, and he was engaged in the investment in the field of corporate services in the IDG Beijing office. Feng Zheng also worked in the United States as a data and strategy analyst for Humana, the world's top 500 insurance company, and TrueCar, a Nasdaq-listed auto e-commerce company. Mr. Feng Zheng holds a bachelor's degree in electronics from Tsinghua University and a master's degree in biostatistics from Yale University.

The original text was first Shunwei Capital , and the following is the original text of the article.

Below this record, from internal sharing sessions in August 2020, the introduced along for the team and cognitive research in virtual human direction, that is, "virtual human is the core of the virtual world interaction," and had already invested Target next-generation culture.

At that time, Metaverse was not yet a popular vocabulary, let alone a popular direction. We also used "top player" to refer to the vision of this virtual world. It now appears that the research at that time is still out of date, so I will share it with you.

Today, the popularity of the virtual human track continues to grow. More and more people see that virtual humans are part of the core of the virtual world. Based on this judgment, we continue to look for targets and invest in a very special company in 2021. An excellent AI-driven virtual human technology company has initially completed its layout on this track. These two companies also achieved unexpected growth in 2021.

In the following you will know:

• Why did we choose to start focusing on the field of "digital people" in 2019?
• What are the "definitions and representatives" of digital people?
• What are the "development stages" of the Digital Race Track?
• In the eyes of investors, what are the "entry points" of the digital human track?
• Why do we invest in the "next-world culture" of the virtual human ecological company?
• When will the transition of digital humans from 2D to 3D come?

……

How far are we from the Metaverse in "Ready Player One"?

1. Why did you start paying attention to digital people in 2019?

Now we have seen that when there may be huge opportunities in the VR and AR fields, many people may ask whether this technology is a bit far from our real life, and it is far from the real application of this technology in real life. Long time?

So, as a VC industry investor, we need to analyze in addition to the future, also need to focus on now - huge opportunities that may arise in the future, there is a technology which can be achieved in the moment.

What I share with you today is the opportunity we are currently observing that can be realized by using XR technology today, "digital people".

digital human is a person created in the virtual world using AI and 3D rendering technology. simply understood as a "dummy that can talk to you". The concept of digital humans may seem very new, but it is not a new technology used. On the contrary, it is the product of the combination of two very mature technologies.

These two technologies, one is computer graphics technology.

Simply put, it is to create a very good-looking image on the screen. This technology has been widely used in movies and games. For example, Elsa in the Disney movie "Frozen", the Minions, and the most classic Mickey Mouse image and so on. In addition, there is also the battle angel Alita who is considered to have reached the new peak of film and television 3D rendering technology. In games, 3D rendering is also a very important technology. For example, a Switch game that was very popular during this year's epidemic: "Animal Crossing Friends", which designed all the very cute images of people and small animals, and so on.

Another technology of

Specifically, we usually mention: speech recognition, semantic understanding, speech synthesis, image perception and so on. These technologies allow computers to understand, understand our language and actions, and express them. The application of AI technology in reality is also relatively common, such as: Xiaomi’s Xiaoai classmate, Apple’s Siri, Amazon assistant Alexa, etc.

Then, a digital person that integrates computer image technology and AI technology is a new direction that combines a good image and allows him to interact with people smartly. Below, I have listed some representative figures.

2. Representative digital person

The first is the "grandmother player" Hatsune Miku among the digital people. She was actually a software that could do electronic music at first, and then she created an image with her voice. The second one, Kizuna Ai is currently the hottest virtual YouTuber in Japan. He did some virtual performances on YouTube and won the love of many people. Next is Bilibili hatched Ling kite , compare the image of China wind, regarded as a landmark trip to the image of love. It can be seen that the first three images are more two-dimensional and animation style.

Lil Miquela produced by a Los Angeles company. It is a virtual idol with a super-realistic style. She debuted from Instagram. The content includes pictures, videos, interviews, etc., creating the image of a super model. In addition, the super-realistic virtual idol also has IMMA from Japan. This image will be more in line with Asian aesthetics. IMMA has also filmed a MV with Dou Jingtong.

Behind the three images will be closer to reality, the first wearing a blue suit, was launched by the Xinhua News Agency in cooperation with the dog found the AI hostess "new small micro" , she can automatically broadcast the news based on the content of the press release, It can directly generate a dynamic video, and the effect is very close to that of the broadcaster in reality. At the back is Gatebox , a digital speaker virtual person with a holographic screen made by a Japanese company. In the speaker, there is a holographic projection of a girl in the second element. As soon as the user returns home, the girl in the speaker can instantly interact and talk with him, such as broadcasting the weather, daily greetings, and so on. The last person wearing a white coat is one of a series of digital humans released by Samsung at last year’s CES conference, Neon . His main idea is that digital humans can gradually replace many interesting roles in people’s daily lives. .

Next, I want to share with you a very important concept: digital human will become an App in the 3D world. This is different from the current concepts in many media articles and industry analysis.

3. Digital humans will become the App in the 3D world

Looking back at history, we can see that the way people interact with machines is constantly changing, essentially because the technology we interact with is constantly changing. For example, when you first used a computer, the interactive method was to realize the operation by looking at the website and webpage in the browser on the monitor, and through the instructions conveyed by the mouse click and the keyboard button.

In the mobile Internet era, the terminal devices we use have become smart phones. The biggest difference between smart phones and computers is the touch screen. The core technology in the touch screen is called multi-touch, which everyone is already familiar with. So through this kind of interactive technology, our interactive method is no longer the use of keyboard, mouse and browser, but each App in the mobile phone. Everyone's interaction method has become the touch of the fingers, and a series of permutations and combinations have been derived, including operations such as sliding up and down of the "Tik Tok" that everyone is very obsessed with.

We believe that in the world of 3D technology, the terminal devices used by people will become VR and AR, so there is actually no concept of screen in such a world. Looking at the interactive technology, all the images we can see are rendered in 3D, and in the process of interacting with these images, the technology behind them is the AI we just mentioned.

｜The picture shows the stills of the movie "Number One Player"

Therefore, we believe that will become digital humans in the 3D world in the future. We will interact with digital humans to obtain information. The 161cd35d084eba interaction method is no longer pressing the mouse, Instead of using the screen, we directly use our most natural language and actions.

Therefore, it can be said that digital humans are our most important interactive medium in the 3D world and will become the next generation of human-computer interaction. The super unicorn app we are constantly looking for in the mobile Internet era will become digital people in the future. interacts with digital humans is actually closer to human natural habits, so it will be a more convenient and comfortable experience.

4. The entrepreneurial entry point of the digital human track

Next, let's talk about the entry point of digital human entrepreneurship.

First of all, there are already many ideal entrepreneurial teams who choose to use the "one-step" approach to directly create a future world composed of countless digital people. Among them, the most popular entrepreneurial direction is digital social networking. But at the same time, we can see that most of these companies are unsustainable.

One of the better startups is VR Chat, which was established in 2014. Up to now, there are still some loyal users creating virtual images in this application to interact and chat. In addition, there is Altspace, which was established in 2013, which has been acquired by Microsoft. Now Microsoft will choose to hold some virtual events on this platform. Finally, there is the Horizon project that Facebook (now renamed "Meta") was released with the hardware device Oculus last year. It is currently a very important business in Facebook. In addition, many startups choose to experiment with digital people on smartphones, such as the popular application Zepeto and so on.

At present, these applications have not been fully verified. The reason is We believe that the "one-step" digital human social world needs to have a better experience in VR/AR equipment, and the development speed is limited by the VR/AR equipment. universal. However, the current situation is that the penetration rate of VR/AR devices is far from enough, so we believe that this direction is not the best entry point for startups.

than being a digital person who does a lot in the 3D world, at present, the better entrepreneurial direction of 161cd35d084f6f starts from the 2D screen.

Startups can choose to create one or more digital images that are loved by users on the 2D screen. For example, the Instagram celebrity Lil Miquela I just introduced. The operating company Brud behind him is located in Los Angeles, USA. The investment by Sequoia and other institutions in the United States was valued at US$125 million in the latest round.

The company's main source of income is through Lil Miquela's virtual supermodel image to co-brand and promote fashion brands, etc., so as to harvest brand advertising sponsorship.

Another company with Asian characteristics is Rainbow Club from Japan. It has completed a huge financing of 1.9 billion yen in 2020, and its income model is completely different from Brud. Rainbow Club mainly uses the two-dimensional image created by the company for online live broadcast, and earns income through live broadcast rewards.

Therefore, from the perspective of a startup company, we believe that creating and displaying digital people from the 2D screens of mobile phones or computers is actually a very effective and grounded approach.

5. The first stage of development:

Virtual idols improve the profit distribution mechanism of the content industry

So, what are the stages in the digital human race track?

first stage: "virtual idols" improve the profit distribution mechanism of the content industry.

The process of making a "virtual idol" can be roughly divided into the following steps. First, a startup company needs to create a 3D model, the style can be partial two-dimensional or partial realism. After the virtual idol is done, look for a so-called "person in the middle" (the vocabulary comes from Japan), and the person in the middle will play the avatar. Use the camera to capture the movement of the person in it, so as to complete the production of personification and virtualization. Therefore, the virtual idol can be understood as an image driven by the person in the performance.

So why is the popularity of virtual idols continuing to grow, and startups are keen to create a virtual idol?

First of all, at this stage, although virtual idols do not seem so smart, they have solved a problem that plagues everyone in the current content industry: the profit distribution mechanism.

For example, we all think that many brokerage companies look glamorous on the surface, but in fact they have a hard time. The reason is that most of their income is taken away by celebrities. At the same time, we can also see another type of company led by Disney, their revenue and financial reports are very good, because Mickey Mouse will never ask Disney bosses for salary increases. So the first advantage of virtual idols is that it changes the profit distribution mechanism of the content industry. The company can completely control this image and have all the rights to use and profit from virtual idols.

Below I will introduce several main lines of development in this industry.

is the most basic hardware and software supplier to provide low-level technical support: such as Unity and Unreal for 3D rendering in software; Nuoit and Vicon in hardware, when we are watching movie highlights You can see that the devices worn on actors when they are performing motion capture come from these hardware companies.

above are technical service providers. can integrate the above-mentioned basic technologies to help other companies create and drive their own digital human image.

Representative companies at this level include: Facerig, they use arguably the lowest threshold and the most down-to-earth technical solutions. Many online anchors are using them. We can spend dozens of yuan on the Steam platform. You can download to this software. Facerig mainly supports users to capture their own facial movements with the camera on the PC side, thereby driving some of the built-in digital images of Facerig to make half-length virtual digital human performances. The threshold to achieve this effect is relatively low, belonging to the entry level.

In addition, there is "Super Dimensional" from Guangzhou. The company will provide users with software that allows users to purchase motion capture equipment and import models by themselves. Therefore, it can support users to create more professional virtual idols driven by motion capture equipment.

XMOV from Shanghai, also called Mofa Technology, will have a stronger technical strength and can support users to make some super-realistic, higher-precision virtual idols. Why is high precision an important measure? The higher the personification requirements for virtual idols are, the higher the accuracy requirements. Representative companies in this field include Oupang and Facegood.

is the operator above the technical service provider. The first image in the following picture is the original and most influential virtual idol "MOMO sauce" on Douyin. The original here refers to: MOMO sauce was created in the same way as a virtual idol on the first day. She The operator behind it is a project incubated by a company doing big video data analysis. There are currently millions of fans on Douyin, and daily content is mainly presented in the form of video and live broadcast. The second one is "Yi Chan Little Monk", he is actually the top card of an MCN organization and a very influential IP. Because his body is an IP produced in the way of film and television animation, he belongs to the virtual idol of "halfway renunciation". At present, the young monk Yichan will cooperate with some of the above-mentioned technical service providers to realize interactive live broadcasts and performances. Le Element is a very well-known game company. They have produced their own virtual idol variety shows and online dramas. Shanghai Henian is also an established virtual idol production company.

Virtual idols have been produced, where should they go to perform?

is the display platform. 161cd35d085112 We can see that in the current stage where 2D screens are used as the medium, many display platforms have appeared: Bilibili, They are also currently carrying out virtual idol-related projects. For example, Bilibili has established a company to produce and operate virtual idols; iQiyi has also produced a virtual idol band. These platforms have also made relatively large investments in the field of virtual idols.

summary, the current virtual idol industry has four main lines: basic hardware and software suppliers, technical service providers, operators, and display platforms.

From the investment point of view, we will seize the two main lines in the middle:

• The first is the production level of virtual idols, namely 3D model generation and driving technology. The core is to achieve faster and lower cost production and driving of 3D models;
• Second, the successful IP creation and operation around the main line of operators, that is, how to successfully create a favorite IP image, can also be summarized as a main line of "art".

Therefore, the investment ideas of virtual idols can be briefly summarized as: Two main lines of technology and art. Take Disney as an example. Disney’s technology is constantly iterating, but its core ability is to continuously create images that can be loved by the audience. Therefore, it can be seen that technology and art are mutually parallel and support each other.

VI. The second stage of development:

Digital human instead of simple human interaction

Let's talk about the second stage of "digital humans" below: Digital humans replace simple human-to-human interaction, and the core is to improve efficiency.

In order to be more intuitive, I made an analogy here: Intelligent manufacturing is a very hot field at present, the main reason is that we believe that "robots" essentially replace simple human and machine interactive work.

Then the analogy in the field of "digital humans" is that digital humans can replace simple human-to-human interactions. For example, digital people can replace simple customer service work, sales consulting work, simple medical consulting work, and so on.

｜Robot, instead of simple human-computer interaction

Sogou, its news AI anchor, as long as there is a text draft, it can automatically generate an unlimited amount of program content; Sogou also cooperates with other companies to make some digital human customer service, such as video interviewers and so on. Mofa Technology is working as a digital receptionist in the lobby of the bank. This is also an entry point where we have observed that the demand in this industry is gradually increasing.

So if you want to realize these scenarios, what is the technology behind it? is what we just said:

• Speech recognition and semantic understanding: allow digital people to hear and understand the needs of users;
• Speech synthesis: Let digital people express it in the form of language;
• Image recognition: let the digital person know what the user is doing;
• 3D Drive: In addition to making sounds, the digital person can drive the body to make some body language and facial expressions to make the digital person look more real.

In this track, our optimistic startups need to be able to make useful digital human apps. The first is the technical level: the company needs to develop a set of efficient technical solutions to make digital people "smart" enough to understand and solve my problems. The second is the artistic level. Digital people need to have an attractive image.

Seven, next-generation culture

Next, I want to introduce a virtual idol operator that World Culture. (Shunwei Capital once led the Pre-A round of Next World Culture in 2020 and will continue to support it in subsequent rounds of financing.)

The core ability of Next Generation Culture is to design and operate an IP virtual image, and use celebrities to expand its influence, and at the same time help celebrities to undertake more business cooperation. The first celebrity virtual person produced by Next Generation Culture is the avatar "Di Li Leng Ba" created for Di Li Reba.
 

Initially, the expectation of Next Generation Culture for this project was mainly to enhance the company's case awareness and obtain supplementary funds. But in the process, I gradually discovered that the market for celebrity avatars is larger than expected, and there are demands from the three parties of celebrities, fans and brands:

For celebrities, avatars can escape the limitations of artist status and activity time and show more ideas. For fans, you can see the different aspects of celebrities from the avatar. The avatar products launched in cooperation with 52TOYS and Twelve Buildings also meet the demands of derivative consumption; for brands, compared to real people, celebrities’ Virtual images can be used in high-frequency and convenient marketing activities to innovate at the visual and content levels, with fewer restrictions.

At present, celebrity avatars are already the most mature business line of the next-generation culture, and they also have relatively clear scenes of change. From the conceptual design and image production in the early stage to the later operation planning, the next-generation culture has formed a relatively stable process.

and celebrities has also developed a mode of co-creating IP from the simple provision of solutions in the early days.

After Di Lieba, Next Generation Culture also created his virtual brother "Taosman" together with Huang Zitao. In the latest release of cooperation with artists, Next Generation Culture no longer simply designs the avatar of the artist, but creates a virtual band in line with Ouyang Nana's personal characteristics. The copyright revenue of these co-creation projects will be shared by Next World Culture and the star team.

World Culture and Mofa Technology have cooperated to launch the 161cd35d085476 Guofeng super-realistic virtual image "Ling-Ling", her appearance balances the aesthetics of the East and the West on the appearance of the Chinese. In preference, she is a tall and thin young girl with red eyes and phoenix eyes. At present, in the domestic market of 18-30 years old, there is a relatively lack of young cultural inheritors with distinctive national style and international quality. Ling is aimed at the gap in this market segment, and the target is the virtual supermodel network on Instagram abroad. Red Lil Miquela.

In addition, Next World Culture has also launched a virtual DJ "Purple" She has reached cooperation with Owhat, Wonderland New Sight Magazine, etc., and participated in iQiyi's virtual audition. "Cross-Dimensional Rising Stars" will appear more on the stage of offline music festivals and livehouses in the future.

In summary, the core competitiveness of next-generation culture is to create interesting, multi-layered, and beautiful images, and to expand its influence through variety shows and videos.

8. The third stage of development:

Everyone has their own digital image

Next, I will share with you the third stage of "digital people": everyone has their own digital image. The reason why this stage is put behind the case sharing is because at present, the stage is still a very beautiful and very distant future vision.

The very popular movie "Number One Player" in the past few years is a concrete explanation of digital people and the future scenarios of VR/AR technology. will be a 3D world in the future world; everyone has a digital virtualized social stand-in; we will interact with many intelligent digital people, or NPCs (Non Player Characters), for information; The last point is the combination of gaming and social interaction.

｜The picture shows the stills of the movie "Number One Player"

In the current discussion of 5G, a very popular concept is cloud gaming. Its core is to drive 3D rendering in the cloud to generate images. Many of the games we currently see are many players playing games together in the cloud, but from the perspective of digital people, cloud games may develop to interact with digital people in the cloud. So we believe that the concept of cloud gaming is only half right, and the real application in the future may be cloud digital people.

You can imagine that in the future, when we order food in a restaurant, we may be a digital person driven by the cloud, coming to your table and asking what help you need, etc.

｜The picture shows the movie "Out of Control Player" stills

Finally, to summarize, at present, digital humans have been widely used in 2D screens. At the same time, in the future 3D world, digital humans will also become a very important role.

The most interesting thing is that in the current development of 2D media, the technology and experience accumulated by digital human technology can be completely migrated to the 3D world. When VR/AR devices gradually replace smart phones in the future, digital humans will also complete the transition from 2D to 3D. Therefore, I believe that digital humans are similar to a "snowball" track, that is, there are applications in 2D media, a future in the 3D world, and their technology and image can be transferred.

Looking forward to the coming of the 3D world in the future.