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China's Game Industry Attempts to Change the Narrative
"Gametech" touted key to the next technology frontier
When I was in primary school, parents and teachers would barge into computer game rooms to pull children out. A high-profile national newspaper said at the time, “the children who spent all day there have their destinies set. Boys end up robbers and thieves, and girls end up as escorts.” The sensational story, which went on to win a national journalism award in 2001, culminated in the indictment of computer games as “electronic heroin.”
Two decades later, another national newspaper called Internet games “spiritual opium” and “electronic narcotics” in a single broadside wiping almost $60 billion off the market capitalization of China’s leading video game firm in one day’s early trade.
Despite almost half of the Chinese population playing the games and the sector earning $195.8 billion in 2020, the popular and profitable industry remains largely a pariah in China’s public opinion. The central government, starting last year, forbids kids from playing video games for more than three hours per week.
It is against this background that the recent report 游戏集群——数实融合进程中的技术新集群 Gametech - a new technology cluster in the process of digital-real integration stands out in boldly and comprehensively attempting to shape China’s mainstream narrative on video games.
The report, penned jointly by China Game Industry Research Institute and a research team led by Wang Yanyu of the Institute for the History of Natural Sciences, Chinese Academy of Sciences (CAS), was released on July 21 with the apparent backing of China Audio-Video and Digital Publishing Association, a government-recognized industry association representing entities in audio-video, music, and digital content. (The association established the China Game Industry Research Institute)
Like many of its peers in China, the industry group should be understood as a bridge between the government and the industry. Sometimes, shrewd private companies leverage the set-up to schmooze and participate in public discussions where they obscure themselves individually under the umbrella of an industry.
That it comes from the backing of an industry association isn’t a cause for automatic dismissal, but a welcoming development in a more sophisticated economy that has now apparently given rise to diversity.
Chinese groups like this are different from the U.S. Chamber of Commerce in that the latter represents the interests of businesses - and their interests only, whereas a Chinese trade body often has to strike a delicate balance between two masters. But that doesn’t mean the Chinese groups cannot or do not engage in lobbying or advocacy.
The report doesn’t directly challenge China’s national stereotype that games waste time and ransack the future of minors but skillfully opens a new chapter in the national conversation - a smart and pragmatic strategy.
Gametech, defined as a functional technology cluster having realized large-scale application in video games for the first time with the primary goal of enriching and improving people’s interactive experience in the report, is touted as having already contributed to other vital sectors and technology and retaining potential to shape a country’s edge in the inevitable and upcoming future of digital-real integration such as the metaverse. Even the Cold War was invoked, as the report asserts that the U.S. and the Soviet Union competed in gaming programs on board games.
In the keynote speech to publish the report, 敖然 Ao Ran, Secretary-General of the China Audio-Video and Digital Publishing Association, said
General Secretary Xi Jinping has repeatedly stressed that "giving full play to the advantages of big data and rich application scenarios, promoting the deep integration of digital technology and the real economy, empowering the transformation and upgrading of traditional industries, giving rise to new industries, new business models and new modes, and continuously strengthening and expanding China's digital economy." Game accelerates the integration of digital and physical scenes, stimulates the rise of new technologies, industries, and models, and prompts the real economy to grasp opportunities for digital transformation.
Looking at the macro environment of the era of Gametech development from the international level…At present, we are on the eve of the transformation of Internet technology and paradigm, and the game industry is closely related to the next generation of Internet technology.
Domestically, the digital economy driven by the development of digital technology has garnered more and more attention. The 14th Five-Year Plan and the 14th Five-Year National Informatization Plan clearly state that the development of the digital economy and digital technology should be accelerated, so as to accelerate the whole process of building a Digital China.
Under this background, games are an important part of the digital economy, and gametech has also become an important force in digital-real integration. Games don't stop at playing, and it doesn't stop at (being part of the) culture. It is gradually surpassing the traditional narrow sense of cognition and becoming a "super digital scene" composed of various cutting-edge digital technologies that constantly create new values and possibilities.
Now, when the new round of technological and industrial revolution is reshaping the global innovation map and the global economic structure and technology, Gametech has once again become a buzzword in the digital technology and digital industry.
In the past, games used to be one of the important areas in which the U.S. and the Soviet Union and other major powers competed for supremacy. Games represent the advancement and creativity of a country in the field of computing and artificial intelligence. In the future, the game engine, virtual human, cloud-based game, XR and other technologies in gametech may become the next generation of important infrastructure for the digital-real intergrated society and a significant area for the technology game of the great powers.
(Not from the report. I made it online.)
A research team from the Institute for the History of Natural Sciences at CAS on the cover apparently helped the promotion of the report, as CAS is revered as the hall of fame for natural scientists in China. Many Chinese press articles led with variations of “CAS report says gametech key to hard technology” in their headlines.
That would be exactly the badly-needed publicity desired by China’s game industry, where some major players are the country’s leading tech firms.
Tencent earned $27 billion from video games worldwide last year. That’s 31% of its revenue. But Chinese regulators excluded it and Netease in the latest batch of game approvals in June, extending the year-long drought for China’s two largest game developers.
ByteDance, best known for TikTok and the Chinese version Douyin, is estimated to have generated $1 billion in the 12 months by late June, a 16% increase year on year.
They wish to be seen as heeding Beijing’s heavy-handed push in contributing to science-based industries that serve strategic needs rather than just developing fun, productivity-dragging distractions, to rephrase Dan Wang’s 2021 letter.
As you can imagine, the report basically argues games are a boon to China’s endeavor to the next technology frontier. The authors apparently went through the history of games - in many cases, before they are on computers - and looked into the future, for example describing the often-hyped Metaverse in a more accessible and relatable fashion.
By comprehensively summarizing the spillover from gametech in other domains, the report quite convincingly lays out gametech’s contributions and, importantly, the potential of computing technology in a more interconnected and integrated human society.
It’s probably not that the report found something entirely original, but that meticulous record keeping and deft narrative building, apparently out of significant devotion of time and effort, tell what has been overlooked and undervalued in the public discourse.
I had lamented that quite some public discussions these days turn out very shallow - something is either right or wrong, based on little evidence. Unexamined “instincts” out of traditional, conservative, and impulsive moral judgments dominate the discourse - learning and working are good, therefore game playing is bad! - without giving due consideration to the rapidly progressing and decisively complicated factors. Helpfully, the report injects impetus into the unbalanced discussion on games.
Below are some abridged translations with some overtly cynical notes from me.
(From the cover of the report)
As a by-product of scientific research and technological research and development, games have been full of attributes from science since their inception. Its development and industrialization process have further nurtured a unique, complete, and mature technology system. After more than 50 years of development... Gametech is gradually being applied to digital cities, industrial design, film, and television performing arts, and more fields.
Even Microsoft says so!
In January 2022, Microsoft caused a stir when it announced the acquisition of video game giant Activision Blizzard, Inc. for $68.7 billion in cash. Microsoft CEO Satya Nadella explained the strategic considerations behind the acquisition in an email to employees: "Today, [gaming] it’s the largest and fastest-growing form of entertainment, and as the digital and physical worlds come together, it will play a critical role in the development of metaverse platforms."
There are different opinions on the specific form of the metaverse. The only consensus is that we are on the eve of change for Internet technology and paradigm , and the metaverse of digital-real integration is everyone's conceptual image of the next-generation form of the Internet, and it is a collection of future imaginations of human-machine and human-human interactions.
Games are not just about killing time.
We hope to take this report as a starting point, go back to history, from the perspective of the history of scientific and technological development, sort out the connotation and characteristics, development process of gametech, and analyze its function and value in the future society of digital-real integration, so as to re-understand the game industry.
Games have been born with human civilization and have gone through thousands of years of development... Games are often important ways for people to master new knowledge, tools, and rules…
Video games began to attract attention as games in the traditional sense in 1962, when the first non-research video game "Space War!" appeared. Video games were born as an interesting accident in the research process of computer science and artificial intelligence.
Game development is becoming more and more professional, and there have even been some technology spillovers, forming some applications in outside fields and making game development-related technologies innovation leaders in several fields. For example, game engine technology, after gradually maturing in large-scale 3D games, has been applied in digital twins, virtual simulation, intelligent industry, digital cultural protection, and other fields…The virtual human technology, which is used as the digital avatar of the user, is now also applied in many consumer scenarios and brings a new experience.
From the mid-to-late 1990s to the early 21st century, the development history of large-scale video games and graphics processing units pushing each other is still talked about by users.
On the one hand, high-quality video games have led to endless technology originality and wide application in game fields such as game engines; on the other hand, more video games have been proposed for computing power development, chip computing, machine learning, image rendering, network transmission, and other technologies. Development is increasingly specialized, promoting related technologies to become independent.
The authors put forward the concept of gametech and defined it as a functional technology cluster having realized large-scale application in video games for the first time with the primary goal of enriching and improving people’s interactive experience. Because of its characteristics such as interactivity, high simulation, strong immersion, and fine rendering, it is gradually being applied to many fields and has become an important technology toolbox for promoting the development of digital-real integration.
The report didn’t explain how it comes to the number 46.3% below, but to me this can also be read as evidence of 5G’s continuously disappointing underperformance. Almost two years after former Finance Minister Lou Jiwei's criticism (Chinese) of China’s frontloading of investment, 5G still struggles to find scalable “killer” applications.
Gametech has also created broad market application prospects for 5G commercial use. According to the calculation of relevant domestic public data, the authors estimates that the contribution rate of gametech to the scientific and technological progress of the 5G high-speed network industry is 46.3%. When the 5G form of autonomous driving, medical care, industrial Internet, and other industries is 方兴未艾still maturing , gametech is the first step to become 5G One of the key experimenters and evaluators.
Thanks to large-scale data sets, games have become a key platform for verifying and deepening new theoretical research on artificial intelligence, and several technology branches of artificial intelligence have also become the core components of gametech.
AR/VR (Augmented Reality and Virtual Reality) technologies and devices are beginning to mature, gradually showing their power as a key technology for the next generation of the Internet. The 2016 hit game "Pokémon GO" announced the beginning of the first large-scale commercial application of AR technology.
AR, VR, and other related technologies are often discussed as a technology cluster in China, and the relevant data are also counted together, so they should be discussed together, hereinafter collectively referred to as XR.
However, on the whole, the representative companies in XR technology in Europe and the United States have not formed monopoly barriers on technology and business paths. XR technology is a rare field where China can run in parallel or lead the world in the next-generation basic Internet technology.
Chinese technology companies represented by Tencent and Baidu have applied for more than half of the global applications for VR and AR technology patents in the past two years. Other Chinese companies that have entered the top 10 patent applications include OPPO, Ping An Insurance, SenseTime Technology, and Huawei, etc., indicating that China’s XR technology is in the stage of rapid accumulation and high-speed iteration. The authors estimate, based on domestic public data, that gametech and XR technology have a high degree of overlap, and the contribution rate to the scientific and technological progress of the XR industry has reached 71.6%.
The digital scene formed by gametech has taken the lead in some application explorations in military, medical, cultural, and other fields. In the military field, in the late 1990s, the US military began to use "Operation Flashpoint" and armed raid series of military simulation games, and the US military provided relevant software support to game companies. "Operation Lightning" developed by Bohemia Interactive in 2002 has a large number of real settings (such as bullet trajectory, fatigue, damage effects, etc.) based on the gametech implementation, so the US Army began to use the game as a tool for training soldiers.
In 2006, Bohemia developed an interactive, three-dimensional integrated military individual training system called "Virtual Battle Space" (VBS) for the needs of the US military, which has been used in the US military's "Joint Multinational Readiness Center"(?) daily training and has undergone several technical iterations. VBS can simulate any region and any terrain on the earth, which can help soldiers familiarize themselves with the geographical environment of field missions in advance.
[The report lists many other examples.]
Although these sporadic, accidental, and scattered explorations have been costly and small-scale, early explorations, they have also formed some useful feedback and experiences for the gametech’s crossover.
a big IF
Although China’s gametech is not behind powerhouses such as the United States and Japan, it does not have a clear edge. Generally speaking, they are in parallel. If gametech becomes the core component of next-generation digital technology and Internet technology, then gametech will once again become an important area of competition for global industry and national scientific and technological innovation. Therefore, as the main body of gametech innovation, game companies should rely on market advantages to continuously promote technology research and development innovation and cross-border application, so as to maintain the relative advantage of gametech and avoid becoming the "chokepoints" in scientific and technological innovation.
The digital-real integrated society is neither a simple addition of the digital world and the physical world, nor a linear interaction between the physical world and its digital mapping, but two objectively existing parallel world entities truly integrated and becoming a new form of the objectively existing world.
The report goes on to name five trends and make four policy recommendations
Inclusion - As the new infrastructure of the digital economy, gametech drives the deep integration and development of related business formats
Resonance - Gametech as the underlying technology of the next-generation Internet promotes the emergence of a new technology ecosystem
Symbiosis - Gametech promotes the integration and symbiosis of the digital and physical world to shape new scenarios of production and life
Co-governance - Gametech empowers urban digital twins to expand management boundaries and achieve wide collaboration
Sharing - Gametech helps the digitization of public cultural resource assets to achieve wide dissemination and inheritance
Formulate relevant policies to promote the wide application of gametech implementation across sectors
Establish a service platform for gametech research and development, display, and application promotion
Promote the industry to build a gametech cross-over application innovation service platform
Strengthen the research on the process of digital-real integration with gametech as the starting point
What’s the report trying to address?
The spillover effect and driving effect of gametech have yet to receive the attention in the public opinion. Nor has the public opinion established a more comprehensive understanding (of gametech).