Beijing Action Plan to Regulate and Promote Virtual Humans
City Government Estimates Industry Revenue will Reach US$7.5B in 2025
The Beijing city government has issued the Beijing Action Plan, a 5-year plan specifically designed to regulate and promote the virtual human industry in the capital. According to the South China Morning Post, “By 2025, the Chinese capital wants to ‘cultivate one to two’ leading virtual human companies with revenues each surpassing 5 billion yuan, and 10 key companies that each bring in 1 billion yuan.”
Beijing’s Municipal Bureau of the Economy issued the plan. According to online tech publication Rest of the World, “the Beijing government does not outright define what counts as digital humans, but analysts who study Chinese tech policy say the term covers anything from player-controlled avatars in games like Roblox or metaverse platforms like Baidu’s Xirang to virtual influencers and digital pop stars.”
Do Virtual Humans Need to be Regulated?
Virtual humans, particularly player-controlled avatars, would seem unlikely to need formal regulation at this point. While I think the fraud hysteria around deepfake technology is overblown, there is reasonable logic behind considering policies to protect inappropriate or criminal use of a near replica of someone’s likeness.
Avatars in a game such as Roblox don’t pose similar risks today. Virtual humans such as those delivered through video or CGI are more and more lifelike, but there is not much risk of people thinking they are actual humans today. With that said, using a pretext such as privacy and fraud will enable the government to access private user data. The picture is now becoming more clear. Users will likely be required to tie their avatar persona to their real-world identity.
$7.5 Billion in Beijing Alone?
It may be a surprise that there is even an action plan for a single industry segment the size of virtual humans. However, it was more surprising to see the Beijing government estimate that there will be $7.5 billion in revenue in U.S. dollars for the technology in 2025.
There are a lot of use cases that are expected to make up revenue of that scale. Everything from gaming and entertainment to virtual banking and healthcare is expected to adopt virtual humans. And, though the translation is not precise, it appears that some of that revenue may be generated by Beijing-based virtual human companies deploying their solutions elsewhere.
The Beijing government clearly believes this is an important technology sector to call it out so specifically. You should expect the move to precipitate more investment funding to flow into virtual human companies and the technology improvements to come at a faster pace. The open question is whether the regulation and privacy infringements may slow adoption by consumers. I suspect not, but it is surely a potential outcome.