While global giants like Meta struggle to make headway with their metaverse ambitions, Chinese startups continue to attract the interest of cultural luminaries as well as the central government, consumers, and tech giants.
Recently, NetEase became the latest Chinese domestic tech champion to throw its hat in the metaverse ring with an investment in the extended reality (XR) company Sky Limit Entertainment (当红齐天), which was co-founded by the respected Chinese film director Zhang Yimou.
Adding NetEase’s investment to Sky Limit’s B++ round of financing, the company increased its registered capital to $11.6 million (79.9 million yuan), up from $11.3 million (78.3 million yuan). Previous investors in the six-year-old company include AVIC Trust, Lenovo Capital, Xiaomi, and Intel.
There are many metaverse-related companies in China, but Sky Limit stands out due to its legendary co-founder Zhang Yimou, who lends the company significant cultural credibility as it promotes its goal of creating immersive entertainment experiences. The company currently boasts nearly 30 patented technologies, 43 software copyrights, and 13 copyrights of works. Meanwhile, Sky Limit has participated in the compilation of more than a dozen industry standards and won more than 10 industry awards, according to Equal Ocean.
The question now is to what extent NetEase’s modest yet meaningful investment in Sky Limit changes the company’s future prospects, if at all. Considering NetEase’s focus on gaming — which accounts for almost 80 percent of its total revenue — it will be interesting to see whether this investment leads to more gaming-focused initiatives by Sky Limit or simply a stronger effort by NetEase to diversify its business away from a near-singular gaming focus.