Perfect World Final Report - Virtual World Business Analysis (June 2022)

Guanghua
School of
Management
June 2022
VIRTUAL
WORLD
A METAVERSE BUSINESS ANALYSIS
Delivered To
Deliverable 3: Perfect World Business Analysis
Contents
1.0 Primary Research Background ................................................................................. 3
1.1 Methodology..................................................................................................................... 3
1.2 Data Presentation and Key Highlights ................................................................. 7
2.0 STP Analysis: Identification of Target Consumers ........................................ 27
3.0 External Analysis ........................................................................................................... 36
4.0 Internal Analysis ............................................................................................................ 42
4.1 SWOT Analysis ................................................................................................................ 42
4.2 VRIO Analysis .................................................................................................................. 45
4.3 Competitive Analysis ................................................................................................... 48
4.4 Unique Value Proposition ......................................................................................... 50
5.0 Revenue Streams ........................................................................................................... 53
6.0 Business Strategies ....................................................................................................... 58
6.1 Phase One: B2B Business Services ........................................................................ 58
6.2 Phase Two: Attract Brand Followers for Initial Boom ................................. 59
6.3 Phase Three: B2C Retention ..................................................................................... 59
6.4 Phase Four: C2C socializing features and monetary incentives. ............ 61
Conclusion ................................................................................................................................ 62
Bibliography ............................................................................................................................ 63
Appendices .............................................................................................................................. 67
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Preface
As this is the final leg of our Integrated Practicum Project journey, this report will provide
a business analysis encompassing and concluding our findings from the secondary and
primary research. In the first report, we focused on secondary findings to build a
knowledge bank of the metaverse concept and create a foundation for our primary
research. The Project scope was on international market research and business
development considerations on a new metaverse platform that Perfect World is
constructing, “Virtual World”. Perfect World aims to grow a metaverse platform in China
and globally, a project that has been incubating for two years and the product is expected
to have a alpha test launch in July 2022. The launch node is expected to be in the second
quarter of year 2023.
In this final report, we will examine two aspects; (1) The Metaverse Consumer Market
and (2) Internal and External business aspects that impact the business decision making
process for Perfect World. Our primary research started with a survey questionnaire to
100 participants, gauging their interest and market behaviour. We then created a
supplementary survey, targeting specifically metaverse frequent-users and professionals
in the blockchain industry for a comprehensive perception map. This allowed our research
to have a 360 perspective of metaverse, from the frequent users, general public and
platforms perspective. Additionally, an internal audit through various meetings was
carried out to understand the internal needs and make up of Virtual World.
Our largest challenge was trying to find more specific financial costs and revenue streams.
At the current stage of the metaverse industry, it was more viable to draw conclusions
from various industry forecasts of several metaverse features as opposed to an overall
business model.
The project team comprised of Nina Saiful as Project Management lead, Cherree Shin as
Market Research lead, Carlos Camperos as Industry Analysis lead and Beverly Fung as
Business Development lead. We worked with an internal Perfect World team lead by Moyi
and Kia, whom were accommodating to the project development and helped ensure all
proposals were aligned with the interests of the client.
Last but not least, we would like to thank the Guanghua IPP faculty, Professor Wang and
Teacher Cho whom have provided us support and feedback throughout the project.
Thank you all for your kind support.
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1.0 Primary Research Background

Following the Secondary Research on Metaverse platforms, the team then executed a
Primary research. The research was a survey tailored towards gathering metaverse
platform-specific data based on the secondary research information (deliverable 1). The
aim of the survey was to curate a general understanding of potential Virtual World
consumers and their behaviours. In addition, it allows the team to gather first-hand
information which can be considered to be more valid and authentic in a market research
environment.
With this research approach, the team has full control over the data because of ownership
of the data. Hence by employing primary research, Virtual World could obtain direct
customer expectations of the metaverse platform and peruse the relevant data to inform
practical product improvement decisions.
1.1 Methodology
Study Design
The instrument for data collection was via survey. Two types of surveys were created with
two pre-defined groups:-

i. International responses; and
ii. Local Chinese responses.

The survey was designed to be a mix of open ended and close ended, multiple choice and
psychometric scale questions (please refer to Appendix A for list of questions). Responses
were scaled via a likert scale, to measure attitudes, knowledge, perceptions, values, and
behavioural changes of the audience. The surveys were distributed and collected over a
duration of three days.
Data Collection Procedure

The data was collected via two distribution channels, depending on the target audiences:-
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i. Google form
International crowd was sourced by academic, social and professional networks of
the team.
ii. WJX form (WeChat MiniProgram)
Local crowd was sourced by local MBA network, social and professional networks
of the team.
Study Population and Rationale
A total of 93 overseas participants and 46 local participants were approached. The

following shows the demographics of the audience:-
i. International Audience
The international survey responses consisted of 48 females and 44 males from various
continents (Asia, Europe, North America and South America).
Gender
Age Group
1
1
8
20
15
44
48
18
31
Female Ma le Prefer Not to Answer <16 16-20 21-25 26-30 31-35 >35
About 26% of the respondents were identified as ages ranging 21 to 30 (Generation Z)

and ages ranging 16 to 20 (Generation Alpha). Additionally, a majority of 46% of the
respondents were employed (full-time) as seen in the below chart.
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Profession Category
1 1 Employed (full-time)
3
Self-employed
16
Undergraduate Student
Postgraduate/Masters Student
46
10 MB A student
Unemployed/looking for work

11 Retired
5
Other
ii. Local Audience
Gender Age
The local survey responses consisted of 24 females and 22 males from China. An
approximate of 28% of the respondents were identified as ages ranging 21 to 30
(Generation Z) and ages ranging 16 to 20 (Generation Alpha). Additionally, a majority of
44% of the respondents were employed (full-time) as seen in the below chart.
Professional Category
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Risk Factor(s) and Limitations

Taking into account that the audiences approached derived from professional, personal
and academic circles of the team; it was essential to ensure responses were not
consciously or unconsciously biased. Hence, the true objective of the survey was kept
vague to responders. Furthermore, due to the confidential nature of the Virtual World
project, it was critical that its public description was not affiliated to or mentioned Perfect
World. Thus, the following was included as survey introduction:-
“Thank you for taking the time to complete our survey! We are conducting a research to
gain a general understanding of Metaverse consumer behaviours. Metaverse is a virtual
world and refers to a platform that allows users to engage in various activities such as play,
work, consumption and communication.
We would love to hear from you about your thoughts on metaverse as a concept the most
and what type of content or features you would like to experience. This will help us
understand the consumer preferences. The survey should only take 10 minutes, and your
responses are completely anonymous.”
Research limitations were also taken into account when analysing the survey results.
Particularly, when collecting the local survey demographics, the team was aware that there
was a higher portion of MBA candidates in Chinese survey respondents. This limited the
survey results to represent a higher-educated and higher-income level audience. These
groups are more likely to understand the concept of Metaverse as they are more exposed
to the business field.
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1.2 Data Presentation and Key Highlights
The following show a breakdown of the data according to the questions asked for both
surveys, and conclusions drawn from the results.
a. Knowledge or past experience on Metaverse concepts

Are you familiar with metaverse?
Knowledge on Metaverse Concepts Ownership of Digital/Crypto Currency

(1=lowest ; 5=highest)
35
29
30
26
25 29
22
Frequency
20
15
12
10 64
5 4
0
1 2 3 4 5
Rating Yes No
The above graphs display that most of the international audience’s knowledge are
relatively low on the concept of metaverse, despite higher ownership percentage of 64%
for crypto currency. This could be due to the fact that metaverse related concepts are still
fairly new. Given the lack of understanding of metaverse, it is important for Virtual World
to have low barriers to entry for consumers to ensure they are enticed at the market entry
phase.
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ii. Local Audience
Knowledge on Metaverse Ownership of Cryptocurrency
Contrastingly, the local survey population considered their knowledge on metaverse
concept to be relatively average. Moreover, more than half of local responses do not own
any cryptocurrencies. This may be due to the fact that a majority of the responses
consisted of MBA candidates and regulatory aspects of digital currency in China.
b. Willingness to join Metaverse platforms

If you were given a chance to experience metaverse, would you join?
How willing are you pay a fee to access the metaverse and its perks?
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Willingness to Join the Metaverse
(1=unwilling; 5=very willing)
35
30
30
25
25
Frequency
20 18
15 13
10 7
5
0
1 2 3 4 5
Rating
Willingness to Pay to Join the Metaverse

(1=unwilling ; 5=very willing)
35
30
30 27
25 22
Frequency
20
15
9
10
5
5
0
1 2 3 4 5
Rating
International respondents also shared that unlike their willingness to join the metaverse
platform, they are less willing to pay for Metaverse platforms. Furthermore, the low
consumer knowledge on the metaverse concepts in the previous result is likely to have
an indirect correlation on lower willingness to pay.
However, given the high portion of “not sure” responses, it is key for Virtual World to
provide a service that is attractive enough to pay for consumers. This will attract the
“service followers” identified in the secondary research.
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ii. Local Audience
Willingness to Join the Metaverse Willingness to Pay to join the Metaverse
More than half of the local responses are willing to join the metaverse, but they are not
willing to pay to access.
c. Expectations for Metaverse experience

What kind of experience do you look for in metaverse?
Expected Experience in the Metaverse

Not Interested 2
3
Open art gallery 13
13
I want to be a part of the trend 20
21
To buy digital assets (i.e. NFTs, cryptocurrency) 24
26
Escape from the reality 29
32
Monetary values (i.e. land renting, service… 41
44
Experience new games 48
0 10 20 30 40 50 60
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As seen in the above graph, a majority of international respondents answered that they
were seeking a new game experience in metaverse. The second largest experience by rank
was socializing activities, followed by provision of monetary value. Hence, the data above
presents that concept of metaverse experiences is still highly related to “gamification”.
ii. Local Audience
Expected Experience in the Metaverse
Similarly, most local respondents are seeking or expecting a new game experience in
metaverse. Moreover, there was a relatively equal percentage of interest in Monetary

incentives and access to new game experiences.
Additionally, in comparison with the secondary research done (please refer to deliverable
2, slide 10), “types of experiences brands are trying to create for their customers” were
identified as Gaming Approach, Virtual Store/Virtual Merchandise or Virtual Show and
NFT as vehicle. These were strongly aligned with our data findings.
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It is important to note that expectations for metaverse experiences in local responses
mirror globally, hence when Virtual World is piloted in China, the results can be used as a
market testing ground as the type of market demands that can be expected at the global
scale too. This is seen in other tech-companies in China, such as ByteDance’s strategy with
modelling TikTok after Douyin’s success.
d. Awareness of Metaverse Marketing
Are you aware of any memorable metaverse event or marketing campaign?
Awareness of Metaverse Marketing Campaign
19
74
Yes No
A higher percentage of lacked awareness of metaverse marketing campaigns corresponds
to the lack of awareness of metaverse concepts observed earlier on. Of 19% that were
aware of metaverse marketing campaigns, provided examples such as entertainment,
academic research, marketplaces such as Meta Store, fashion campaigns and high-trend
campaigns such as Bored Ape Yatch Club (BAYC).
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ii. Local Audience
Awareness of Metaverse Marketing Campaign
Aligned with the international audience, only 24.4% of local responses were aware of
metaverse marketing campaigns. They provided examples such as entertainment and
marketplaces.
It is important to note that both these surveys do not represent enough evidence of
highest reputable metaverse activities amongst responses, as these does not equate to
the success of the campaign(s). However these findings were aligned with the most
notable collaboration examples shared in Secondary Research (please see Deliverable 1
report). Furthermore, the suggestion of “Academic Research” is a unique aspect of

metaverse examples that was not identified in the Secondary Research. Thus, the
Education industry is a potential emerging area of exploration amongst the others for
Virtual World.
e. Motivation factor to use Metaverse platforms
In the data cleaning process, an amalgamation of the following questions were

constructed to create quantifiable comparisons.
(1) How willing would you use metaverse if you could earn discount coupons that can
be used in the real world? (2) If you found your favorite brand (i.e. automobile or luxury
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retail brands) on a metaverse platform, how willing would you be interested to join the
experience? (3) Would you be interested in virtual online shopping? (4) Would you
join a metaverse platform for exclusive events? (i.e. access to exclusive games)
(1 = unwilling ; 5 = very willing)
When comparing all the incentives, the monetary factor is highly important and should
be taken into high regard when trying to motivate consumers to use Virtual World.
Additionally, from the above data, we can derive that although people were strongly
willing to try out virtual online shopping experiences, seeing their favourite brand was not
the most important factor of motivation. Hence, aligned with the Secondary Research
(deliverable 1) report, international brands understand this incentive in their omni-channel
approach with metaverse platforms. Therefore, Virtual World could offer the option of a
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smooth online-to-offline redirection of sales through discount coupons that can be used
in store or other features that can increase commercial opportunities for brands.
ii. Local Audience
The local responses also had high willingness to try virtual online shopping. However in
contrast to the international responses, they showed a higher level of motivation to join
a metaverse platform if they saw their favourite brand. Hence, the local audience were
less influenced by monetary and exclusivity incentives compared to the international
responses.
Knowing that the local audience are more incentivised by brands, with reference to the
secondary research (refer to deliverable 2, slide 19), Virtual World should consider
potential collaborations with Chinese IP for their local business strategy. For example, the
PopMart Space Molly x Moncler or Marsper x Gucci collaboration utilised metaverse
between Chinese IP and retail brands.
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f. Preference for Brands or Industries on Metaverse platforms
What kind of brand/industry would you like to see in the metaverse?

Interested Industry to be seen on Metaverse
Not Interested 3
Others 7
Fast Fashion 35
Food and Beverages 38
Car Company 38
Luxury Fashion 45
Tech Company 57
0 10 20 30 40 50 60
The technology industry received most popular votes for international audience
preferences. Some examples provided in the survey included Google, Computer Brands
(HyperX, Corsair), Instagram, Uniqlo, Nike, Disney, Sports team, McDonalds, Tech brands
(Apple, Samsung), Universities/Learning Platform, Medical Brands and Game (Fireaxis,
Paradox, Riot Games, GameStop, SquareEnix, Fromsoftware.
ii. Local Audience
Interested Industry to be seen on Metaverse
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Consequently, the local audience presented an even higher interest in technology
companies at 75.56%. The suggested examples by responses included Netflix,

Youtube, Sports (NBA, PGA), Tech brands such as Apple or Samsung, Computer
brands, Movies and TV Series and Game platforms.
If we compare this with our secondary research (please refer to deliverable 2, slide 13),
the common opportunities that brands and companies seek in metaverse include the
(1) omnichannel approach, (2) an augmented reality (AR) experience and (3) branding
or rebranding opportunity. Virtual World would benefit from taking these three factors
into account when approaching the interested industries that our data findings has
presented.
g. User Generated Content
How likely would you create a content on the metaverse?

What are some factors you would consider when creating a content? (rank)
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When asked about the likelihood of creating a user-generated content (UGC) on the
Metaverse, respondents were mostly reluctant to create. This is probably due to lack of
knowledge in metaverse concepts, as identified through earlier questions. Likewise, taking

into account that a majority of our respondents' occupation was full-time employees or
students, we can infer that UGC on metaverse may be viewed too time consuming for
their lifestyle and schedule.
Respondents were asked to rank the following factors: Effort; Time; Cost; Monetary
Incentives, from less important to most important when creating a user-generated

content on Metaverse. In the data cleaning process, these rankings were then transferred
to a scoring system:
• Less Important: 1
• Somewhat Important: 2
• Important: 3
• More Important: 4
• Most Important 5
The total score of each factors shows the level of barrier each factor can be when a user
is creating content:
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The graph above shows that Monetary Incentive is the most important factor, followed
by effort and cost. Compared to the other three factors, Time did not seem to be too
important when creating a content. So despite the inferred assumptions, perhaps
monetary requirements for UGC still triumphs as the highest barrier to entry in
international metaverse platforms.
ii. Local Audience
Likelihood of creating UGC on Metaverse
When asked about the likelihood of creating a user-generated content (UGC) on the
Metaverse, the majority of local population was interested in creating content. We can
infer that this could be related to their interest of creating content for monetary
incentives. Only 14% of the people expressed their lack of interest in doing so.
Respondents were asked to rank the following factors: Effort; Time; Cost; Monetary
Incentives, from less important to most important when creating a user-generated
content on Metaverse. Similarly with the international survey, in the data cleaning
process, these rankings were then transferred to a scoring system:
• Less Important: 1
• Somewhat Important: 2
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• Important: 3
• More Important: 4
• Most Important 5
The total score of each factors shows the level of barrier each factor can be when a user
is creating content:
Time
Cost
Effort
Monetary
Incentive
155 160 165 170 175 180

Total Score
The graph above shows that Time is the most important factor for local audiences,
followed by Cost and Effort. Monetary Incentive did not seem to be too important when
creating a content. From the data, we can infer that the majority of the local population
is seeking for the overall experience.
h. Perceived weakness of Metaverse platforms

Which do you think are the weakness of metaverse?
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Metaverse Weakness
Others 4
You can only enjoy full metaverse experience… 20
No price control for the goods and services sold 30
It is just a trend for now and too many… 35
New risks and uncertainty i.e. hard to predict… 44
Credibility of the product sold on metaverse… 53
Identity theft or fake Identity 53
Personal data security and privacy issues 62
0 10 20 30 40 50 60 70
International respondents viewed personal data security and privacy issues as the largest
threat in metaverse platforms, followed by identify theft and credibility of the product
sold to be the second largest.
ii. Local Audience
Metaverse Weakness
Local respondents also viewed personal data security and privacy issues as the largest
threat behind metaverse platforms. Mirroring the international responses, the credibility
of the product sold and identity theft also scored high amongst the local audience.
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However, new risks and uncertainty in the marketplace scored higher amongst local
respondents.
As mentioned in the secondary research, there is currently no legal framework in existence

for specific metaverse platforms and that the legal principles should be taken into
account. The principles of data protection, IP laws and regulation of virtual assets are key
amongst others, to ensure a safe and comfortable platform for metaverse activities.
i. Perceived strength of Metaverse platforms
What do you think are the strengths of the metaverse industry?
Metaverse Strength
Others 2
Improve our daily lives 31
Create a new source of income 41
Connect with diverse people 45
Creation of new job opportunities 47
Increase technological skills 57
Enhance creativity and imagination 67
0 10 20 30 40 50 60 70 80
The international respondents scored high for enhancing creativity and imagination at
67%. With technological skills and new job opportunities as second highest strengths of
metaverse platforms. These represent the current perception of opportunities audiences
view in metaverse platforms.
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ii. Local Audience
Metaverse Weakness
Similarly, the local respondents voted highest for enhanced creativity and
imagination, with improving technical skills as second highest.
From here we can infer that the main perceived strengths and weakness of the
metaverse concept is similar globally and that these perceptions can be observed into
opportunities or threats for Virtual World. This will be further analysed in the internal
SWOT analysis phase.
j. Improvement Suggestions
What other factors would make your metaverse experience better? (Open-ended)
The following were summarised factors suggested by international audiences:-

1) Experience
Feel like you are the main character of a fictional movie

Difference from the reality – Metaverse is complementary
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2) Accessibility
Development in Human Computer Interaction (HCI) aspect

Training/Educating on how to navigate the metaverse; Easier navigation
Accessibility for lower-end devices to increase availability

3) Security
Increase credibility through endorsement from experts in that field

Enhancement of personal security
More regulation from authorities

4) Cost-related
Digital currency use should be controlled, so it would not fuel real world inflation
Sharing profit on the data generation
ii. Local Audience
The following were summarised factors suggested by local audiences:-

1) Experience
Full immersion and interactivity, so that someone can abandon reality and
its problems.
Improve the quality of education and training, also involve the function of
online tourism locally and internationally.
2) Accessibility
Consider all barriers to entry; internet access in lower tiers.
Detailed guidance for new users, protection of privacy and currency and quality
assurance of goods in shopping are the key points.
3) Security
Promote identity protection to avoid scams
Authenticity of digital assets so it can be legally protected.

Create a safe environment for all generations to join the platform.
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4) Cost-related
Control price fluctuation. Create rules to restrict the market.

More technology popularization and less sales routines.
Ability to create financial freedom
1.3 Summary of Findings
In addition to the key points highlighted in 2.0, the following were conclusive information
that can be established from the primary research:-
a) Monetization or Pay factor is important for our consumer's willingness to join.
b) Internationals are not as attracted to join by the brand in metaverse but local
respondents were more inclined to join if they saw a brand that they were familiar
or preferred.
c) The factors that affect the likelihood of creating a User Generated Content are
opposing for local and international respondents.
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A Market Analysis of
Metaverse Platforms
Virtual World Segmentation,
Targeting and Positioning.
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2.0 STP Analysis: Identification of Target Consumers

This section determines Virtual World's target consumers by following the STP framework.
Through this framework, Virtual World can identify who its customers are, curate and
create the right messages, and understand how to position itself against its competitors.
The final analysis was derived by combining the data from the first and the follow-up
survey, which were supplemented by secondary research.
Disclaimer: During the process of segmentation of both the international and local
respondents from the first survey, our team identified that both groups were showing similar
trends despite the geographic differences. Hence, we have eliminated the local audience
responses for the following analysis.
2.1 Segmentation
Segmentation is essential for the business to understand the core characteristics of the
target consumers. While there are various methods to segment the potential users, we
have decided to first look at the demographic differences. Thus, in our first survey, we
identified five different age groups. We then recognized that the age group with the
highest average willingness to join and pay was between 26 and 35. This specific group
can be defined as generation MZ, a unique cohort incorporating the characteristics of
both generation Zs and millennials. This particular generation is digitally fluent or native
as they were born with the advancement of the internet. Likewise, generation MZ also
shares the hardship in that they have been met with the economic downturn and
uncertainties when they were entering adulthood; for instance, the financial crisis and the
covid 19 pandemic. Their behaviours are mostly similar to those defined as generation
Z's, but they also hold some values of millennials.
Moreover, as it can be derived from the fact that respondents aged 26 to 35 had the
highest average willingness to pay, our target segment group's occupation status was
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mainly employed. Thus, one can conclude that with a regular source of income, this
specific group is willing to pay a small portion of their disposable income to join the
metaverse platform.
2.2 Targeting
After identifying the target consumer segment, we created a customer persona, Skylar,
demonstrating the target consumer group's average psychographic and behavioral

characteristics (Refer to Appendix B). Targeting analysis is a crucial step in determining
whether this segment is aligned with the business objective of building a sustainable
business model. Likewise, creating a persona will support Virtual World in developing
future marketing strategies that are attractive to this target group.
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Skylar is 27 years old and currently located in North America. She holds a bachelor's
degree and is employed, meaning she is self-funding her living. Although she has a
medium knowledge of the metaverse concepts, she is very interested in trying out virtual
services such as virtual online shopping. Skylar often spends her free time socializing with
friends through social media platforms and is attracted to exclusive events as she feels
more like a valued customer.
In the metaverse, Skylar expects to experience new and upcoming games, but generating
monetary values through trading of digital currencies or assets and receiving work
opportunities on the platform will appeal to her to join. Similarly, her motivation to use
the metaverse significantly increases when she gets direct monetary benefits, such as
earning discount coupons that can also be used offline. In addition, she is quite brand
loyal; thus, her willingness to join a platform increases when she sees her favourite brand.
Brands that actively engage with their customers and hold values that resonate directly
with her lifestyle are the most attractive to Skylar. For instance, as a digital native, she is
loyal to many tech-related companies, and her favourite brands are Apple, Amazon, and
Netflix (Warren, 2021). Besides, other than tech-related companies, Skylar wants to see
some retail brands, especially luxury ones, collaborate with metaverse platforms.
Since she is digitally fluent, she is familiar with the mobile-era content, using platforms
such as Tiktok, Instagram, and Youtube. She usually follows new information through
short-form videos while scrolling through her feed but also uses the above social media
for search engine purposes (Onibada, 2022). Short-form contents are her favourite
because she wants to gain knowledge in the most time-efficient manner. However,
because she is aware of the adverse effects of an abundant amount of information online,
she follows official news channel accounts for credible news. Moreover, she is also
interested in viral trend videos for entertainment purposes.
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Regarding the metaverse platform, security and privacy issues are Skylar's biggest
concerns because it is still a reasonably new concept. She questions the credibility of the
products traded in the metaverse and the users who may use the metaverse for deviant
activities. Like any other MZ generation user, she cares about the transparency and
authenticity of a company, such as the company's stance on social issues (Baxter, 2022)
2.3 Positioning
Now that we have acknowledged who and what our target consumers want, it is most
important to find how Virtual World is perceived by its customers against its competitors.
In traditional positioning analysis, we would use Virtual World's existing competitive edge
to position it in a perception map. However, since Virtual World has not been introduced
into the market, it does not have an already identified advantage yet. Therefore, the
following positioning analysis will be used to figure out Virtual World's potential unique
selling points and areas of value propositions that it can offer to its potential customers.
Methodology:
To create a reliable perception map, we sent a follow-up survey (refer to Appendix C for
the questions) to 10 respondents, who were familiar with the metaverse concepts, to rate
each competitor according to the given dimensions. The dimensions used for ratings to
construct the perception map were the following:
1) Real-life replicated experiences vs. Gamified experiences
2) Focused on immersive activities vs. Focused on monetization activities
3) Real-world replicated design vs. Block-by-Block design
4) Low price range vs. High price range
The results of each competitor were then averaged out, and the scores were put into a
spider web for comparison. Afterward, using the data collected through our first and
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second surveys, we deducted potential positioning for Virtual World, a position that will
be perceived as an attractive product.
Competitor Perception Analysis:
First, looking at the international metaverse platforms, Sandbox was perceived to be
balanced on most dimensions. However, one thing that stood out was that it was
considered more real-life replicated in terms of both the design and the experience. On
the other hand, Roblox, a platform famous for its games, was perceived to be more
gamified with a block-by-block design. It was also considered to provide an immersive
experience instead of monetizing services. Moreover, Decentraland was more perceived

to be replicating the real-world experiences and design compared to Sandbox and
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Roblox. Likewise, since Decentraland provides a marketplace for sales of digital assets, it
was perceived to be more high-priced than low-price with the facilitation of monetized
experience. In addition, Meta, or the Horizon Worlds, the largest social media platform, is
viewed as a duplication of real life in design and experiences. Hence, Meta focuses on
shifting its existing social media services to a metaverse platform with a more immersive
experience. Finally, Meta was perceived to be low in cost.
Furthermore, the perception ratings of Chinese metaverse platforms such as 伏羲 and 瑶
台 scored the same in all of the dimensions. This result may be because Chinese metaverse
platforms have yet to be further developed or used compared to their international
competitors.
Potential Positioning of Virtual World
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For Virtual World to effectively attract potential users, it should first be perceived to
provide replication of real-life experiences than gamified experiences. Some article

suggests that mundane activities that consist of simple daily-life routines in a game is
becoming more attractive to customers, and some users even find it therapeutic
(Economist, 2022). Hence, the more the tasks are related to the real world, the more
appealing it is to the players. This also aligns with the desire of Perfect World since the
objective of the Virtual World is to create a real-life experience. However, our first survey
results have recognized that our target users mostly expect to see gamified content on
metaverse platforms. Likewise, to increase the retention rate of the metaverse platform, it
is still crucial to maintain the entertainment characteristics to a certain degree. Thus, it is

most applicable for Virtual World to be more gamified than Meta but more real-life than
other given competitors.
As for the design of the avatars and assets, such as housings and vehicles, etc., we have
placed Virtual World to be perceived as highly realistic. This decision was made mainly
because the exemplar avatars and graphic designs of the Virtual World platform
presented by the Perfect World seemed close to the real-world designs. Moreover,
considering that the Virtual World platform can also be used for virtual tourism or
launching a new product through IP purchases, the graphic designs must be realistic.
Virtual World should also provide more means of monetization compared to its
competitors. From the first survey, the potential user's primary interest and motivation to
join the metaverse platform was the likelihood of gaining monetary value. For instance,
financial benefits such as discount coupons that could be used offline or job opportunities
were rated relatively higher than other factors to incentivize to join the platform.
Likewise, respondents were also very conservative on willingness to pay on the platform,
which is why the price should be perceived as low. Not only from our respondents, but
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the international metaverse market, in general, is also receiving much skepticism from the
general public. In addition, the global metaverse platform market is already quite
saturated, with many companies challenging themselves to enter the platform business.
Hence, in order to reduce the barrier of entry and compete against many platforms, the
price should be viewed as low compared to its competitors. Still, the price range could
change in the future as more services and products become available on the Virtual World
platform.
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External Analysis
What kind of problems would
Virtual World face?
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3.0 External Analysis

We examined the external factors driving investment for the metaverse. Our ambition for
this analysis is to help understand the potential advantages and disadvantages of the
development of this new technology. We want to help you assess the challenges and the
pressure that the industry currently has and will have in the near future.
The metaverse is still being defined. Yet its potential to be the next wave of digital
disruption is notorious. With real-life impact, it will be the subject of tough competition
and macroenvironmental factors. Its development will depend on political, economic,

social, technological, environmental, and legal factors, as well as the competitive
environment. We analysed them through the Pestel and porter’s five forces.
The metaverse poses immense challenges, across companies and governments. Global
competition will be intense. Our PESTEL and PORTES’ 5 FORCES show the exciting road
we have ahead. The potential is exciting because it will enable new business models,
products, and services, and act as an engagement channel for both business-to-consumer
and business-to-business purposes.
External analysis of the industry. Macroenvironmental factors.
Pestel Analysis.
• Political factor “To what degree government intervenes in the economy”
- The Chinese government wants to promote healthy technological development.
They want to tackle inequality and monopolies.
- China-US tech split is ongoing due to mistrust and disagreement regarding data
handling.
- Competition is high and China wants to dominate new technologies and be

fortified against Western sanctions.
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• Economic factor: “Determinants of the Economy’s performance”
- According to Bloomberg by 2024 the global Metaverse revenue opportunity could
approach $800 billion in 2024.
- In China, last year from September to November venture capitalists poured 6.4bn
yuan ($1bn) into metaverse-related technology.
- For the near future, an economic recession is looming. Inflation is raging. Interest
rates will increase affecting the development of new technology. Research and
Development will be hindered and there is a cyclical change in the stock market
from growth stocks to value stocks.
• Social factor: “The general environment represents the demographic characteristics
norms, customs, and values”
- Millennials and Gen Z are attracted by online games, social networks and other
technologies related to the metaverse.
- Regulators in China want to prevent user addiction for kids under 18. Also, China’s
rules are expected to affect the user experience because the Chinese metaverse
ecosystem is going to be much more government-led, and policy-led.
- The future of Chinese metaverses will reflect the internet today therefore, the
Chinese and the American metaverse won’t overlap.
• Technological factor: “variables that relate to the existence, availability, and

development of technology.”
- The metaverse represents the evolution of the internet and tech companies in
China don’t want to sort or relinquish the next iteration of the internet to foreign
companies.
- The development of a smooth technology will take another 5 to 10 years.
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It will probably take many years for anything akin to a fully-fledged metaverse to take
shape.
• Environmental factors: “These factors are mainly concerned with the effect of the
surrounding environment and the influence of ecological aspects.”
- Climate change policies. Virtual reality technology and data centers use AI and
cloud services, it requires quite large amounts of energy. Training just one AI model
could more than five times the amount of greenhouse gases emitted by a car in its
lifetime.
- Recycling e-waste could be a valuable way to reduce the greenhouse emissions of
the metaverse.
• Legal factors: “How the law affects the way business operate and customers behave”
- There is no legal framework for metaverse platforms.
- Chinese companies are subject to more regulations than in the US. Therefore, the
transition is expected to be a little more complicated, because of China Strick

regulations. That will contribute to further insulating China’s own metaverse
platforms.
- Nonetheless, Intellectual Property rights will be crucial for content generation.
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Porter’s Five Forces
The model explains how the industry works, and how it creates and shares value.
Porter Five Forces Intensity
Rivalry among competing firms High
Threat of new entrants Moderate
Bargaining power of suppliers Low to Moderate
Bargaining power of costumers Moderate to High
Threats of Substitute Products High
• Rivalry among competing firms: High pressure
“Intensified competition lowers the price and reduces profits.”
A blend of technology giants and newcomers are competing against each other to
dominate the new metaverse industry. Also, a notable large portion of global
gaming companies are investing in metaverse to expand their existing user base
and create even wider communities.
Virtual World’s advantage will be to leverage the Perfect World brand and its
active community.
• Threat of new entrants: Moderate pressure
“Tend to threaten the market share and profits of incumbent firms.”
New applications for the technology will evolve as metaverse platforms will
eventually develop more new features and products to utilize their full potential.
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Companies could seek to add additional social features and make user-generated
content part of their experiences to capture Metaverse demand. However, a

significant number of resources are required for marketing and for gaining brand
recognition, and this raises the barriers to entry to an extent.
• Bargaining power of suppliers: Moderate pressure
Meta has captured the market, with 80% of VR sales by volume in 2021, and is also
monetizing its app store. The firm has become a digital landlord itself.
The best way to access the metaverse will be through virtual and augmented reality
headsets. But with today’s devices, we have smartphones, tablets, or laptops we
will be able to access the metaverse.
• Bargaining power of customers: High pressure
A similar feature for all platforms is that there is no investment required for users
to test them out.
Users can all enter a game as a guest without creating an account or buying
anything. This is an essential feature to gain the initial interest of customers, hence,
Virtual World’s strategy must revolve around retention rate and unique selling
features to attract beyond one-time entry users. This means ensuring a good user
experience is key to attracting and retaining customers. But they are not just
consumers of content; they are also content creators.
• Threats of Substitute Products: High pressure
The switching costs for users are low, making it easy for them to migrate to other
platforms and many companies and brands are investing millions of dollars into
developing their corner of the upcoming metaverse.
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Internal Analysis
Unique internal values that Virtual
World could leverage on.
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4.0 Internal Analysis

In this section, Virtual World as a business product is examined through a process of
analysing various internal components of the company both tangible and intangible like.
This includes Virtual World’s processes, assets, and resources. This will provide
information for the decision-makers of Perfect World to determine the growing areas, as
well as strengthen the business plan and practical business strategy.
The internal analysis tools used for this project are ‘SWOT Analysis’ and ‘VRIO Analysis’.
In the process of developing the business canvas model of Virtual World, this internal
analysis will be used alongside the external analysis (PESTEL and Porters Five Forces) in
order to see the full picture of Virtual World and its business operating.
4.1 SWOT Analysis
The swot analysis comprises four main elements; strengths, weaknesses, opportunities,
and threats. Through this SWOT analysis, Perfect World is able to weigh out the potential
opportunities in the market and how they can exploit them. It also allows the company to
determine and minimize the internal weaknesses in order to decrease the possibility of
threat.
An audit via the internal Perfect World team was carried out to inquire internal strengths
and weaknesses of the Virtual World product. The following in orange were provided
input by the client (please refer to Appendix D and E for full responses):-
Internal Strength
1) Can Virtual world leverage on the Perfect World brand? e.g. definite brand voice and
active community
Yes, and can be replicated in our gaming community.
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2) Financial Resources (funding, sources of income and investment opportunities). Price
range expectations for services e.g. premium features, potential marketplace fees (for
transaction) and land?
Note: No budget restrictions were mentioned by client.
3) Do you have all the resources you need internally for this project or are you
considering outsourcing part of the project execution? If so, what parts would you
outsource, and how much do you expect to save in terms of expenses?
At present, the main part is the internally self-research cost. There may be some
procurement of technological supply (TTS/AI). Now we do not need to consider cost-
saving.
Internal Weaknesses
1) Are there any internal factors that could be holding Virtual World back from reaching
its goals? (e.g. resources or what your business might be lacking)
Internally it is fully supported and there is no shortage of resources.
However, the resources can replicated in the metaverse community.
2) Financial structure is not firm yet due to product still in early stages.
The product is still in development and there is no pricing range yet. virtual currency
issue in-game system should be highly regulated, so the economic system is uncertain
whether in the first version will be launched.
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Opportunities (Identified from Internal Strengths)
1) Would you say that Virtual World’s AI algorithm and virtual code or virtual assets are
its greatest assets?

In terms of virtual assets, if we can motivate users to create UGC content through tools
and economic systems and understand this content as virtual assets, it can be designed
as a product highlight.
AI algorithms often rely on strong technical reserves and pre-training models. This part
may cooperate with external tech suppliers, which may not be the biggest highlight of
the project.
2) Access to natural resources, Chinese or global trademarks, patents and copyrights?
It will apply IPs such as trademarks in the future

3) Perfect World should use this business opportunity to gain a new follower outreach.
Virtual World can provide Perfect World a market opportunity to reach and target a
younger demographic as repeatedly mentioned in the market analysis portion.
4) Lastly, this is an opportunity for Perfect World’s business plan to focus nurturing a
priority in identifying lead generation. This include a business focus on B2C or B2B
nurturing versus brand awareness.
Threats (that can become an internal weakness for the business)
1) Domestic Users’ Awareness

If the virtual world or metaverse product has sufficient monetization ability. Whether the
services, we provided are the real users’ needs. If users have multiple demands, which
kind of demands are more valuable?
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2) Overseas Threats
If the product combined with blockchain, there is ambiguity as to whether there be

enough incremental market dividend in the next 2-5 years.
3) The legal and regulatory risks were already pre-mentioned. Please refer to Deliverable
1 Report for extensive details of legal aspects.
4.2 VRIO Analysis

The VRIO tool analyses the internal resources of the company and categorizes each of
them based on their contribution to the company. Hence this tool is ideal to understand
the Perfect World’s strength in achieving a competitive edge.
The VRIO analysis comprises of a four-part business analysis framework used to

determine a business’ competitive potential (via BusinessUpside, 2021).
1) Value – The resource must have the ability to “mitigate a threat in the marketplace”
or “exploit an opportunity”
2) Rarity – Property when a company has resources that are unique to the company.
The resource needs to have an abundant supply to assess a company’s capabilities.
3) Imitability – The “first mover” advantage is usually enjoyed by those companies

that have rarer resources and cannot be easily imitated.
4) Organisation – Involves ways for the company to exploit the resources for its
benefit and competitive advantage.
The following four areas were rated accordingly by Perfect World internal team:-
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The resources identified from the SWOT to be internal capabilities included Product,
Financial Resource, Human Resource (skills), Innovation or Research and Development;
and User Generated Content Tools (UGC). Then following the response from Perfect
World, the areas were analysed to locate the most advantageous spots for Virtual World:-
Highest Impact on Competitive Advantage
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From the above table, we can classify Innovation or Research and Development
capabilities, and Value (ability to mitigate a threat in the marketplace) as its highest rated
competitive edge. These provided the most “Yes” ranks and were aligned with the product
development of Virtual World.
Low or ambiguous impact on Competitive Advantage
Rarity and imitability were seen to have mixed ranks of unique-ness. For instance, in terms
of financial resource, Perfect World does not reap cost advantages or any economies of
scale that makes the organisation stand out from the playing field. Ideally, UGC tools
would also be a competitive edge given its high resource capability, however we are not
able to evaluate this at the current product stage.
Hence, given the “Service Followers” type customer identified in Market Research and
Deliverable 1 Report, it is recommended that Perfect World tests its UGC tools with users
against other metaverse platform tools during its beta-launch, and to utilise this phase to
hone unique UGC tools as a competitive edge. As Research and Development are Perfect
World’s internal strengths, User Interface and User Experience design research could gain
a competitive strength eventually in the later stage.
Overall, Virtual World showed competitive advantages in its product, skill or human
resource and R&D. Although Virtual World does not reap first mover advantages, Perfect
World would still have accumulated resources, opportunities, and technical skills that
other companies may not easily imitate. These provide ample competitive advantages at
market entry level.
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4.3 Competitive Analysis
In the market analysis, we compared competitors according to customer perception. In

this section, we will be identifying the competitor landscape from a platform capabilities
perspective. With reference to deliverable report 1, a number of metaverse platforms were

already identified as the top domains using Analytic Insights and Geek Flare (2022).
The following table included in Report 1 was initially regarded to compare platform
capabilities.
Source: Finder.com (2022)
However, following the primary research findings the team then created a more
comprehensive table based on the six platform aspects that represent a baseline for
platforms:-
Land availability, VR capabilities, tokens in circulation, crypto wallet requirements, wallets
supported and the marketplace fees quantity.
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Note: Table produced inhouse. Information sourced by individual platform websites.
These companies reap first-mover advantages in the above aspects, hence have “early
leaders” pre-mainstream popularity benefit. Each of these platforms have distinctive
positions in the competitor landscape as compared in the Market Analysis (see chapter
2.0) yet have very similar requirements in terms of monetary incentives or platform
features for new customers. This nudges the fact that Virtual World would need to have
these above functions just to meet the baseline or benchmark of being a “metaverse
platform” that can survive in the market. These can be considered as the market entry
requirements to be a viable platform.
Furthermore, according to Bloomberg Intelligence (2021), Roblox, Microsoft’s Minecraft

and Epic Games’ Fortnite appear to be early leaders in the race for Metaverse leadership.
However, given the nature of the dynamic industry and that metaverse products are still
considered in its early stages, other potential metaverse competitors such as game makers
and social networking companies can utilise this time to tweak existing services or launch
new ones to capitalize on the market’s growth.
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Direct Competitors Indirect Competitors
Source: Bloomberg (2021) with inhouse amendments
In addition to the above competitive landscape provided by Bloomberg, the team then
identified these as “direct” and “indirect” competitors. The indirect competitors can be
seen as substitute products or complimentary products. It is clear that the indirect
competitor landscape is more vast and dynamic. Virtual World should take into account
in a stakeholder map, as to whether “soft vendors”, “social networking”, “Gaming” and
“Live entertainment” should be inhouse services that turn these into competitors or “third-
party” sourced vendors, which turns these into key stakeholders.
4.4 Unique Value Proposition

Virtual World: Brand Review and Attributes
Hence, taking into account the competitor landscape and VRIO analysis, the following
represent what shapes Virtual World’s competitive position:-
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Advantage 2 – “less barriers to partnership opportunities” is where Perfect World can
generate brand followers and avoid saturated markets by working with indirect
competitors as opposed to trying to generate every feature inhouse. Advantage 1 –
“accumulated resources” and Advantage 3 – “technical skills” is where Perfect World can
generate a strong service followers audience and focus on customer satisfaction in the
competitive landscape.
Unfair Advantages
The following create an unfair advantage for Virtual World, which is defined to be an
enduring but overlooked dynamic and a crucial aspect of any successful endeavours
(techinasia, 2006).
• Virtual World may not be classified as part of the “first movers” platforms. This is a
huge hindrance due to the nature of the Web3 industry, when compared to
precedence examples such as the history of Web2 search engine markets. Where
first movers such as Google or Baidu saturated the market. Leading to failures in
other large search engines such as Yahoo to appeal to customers.
• Hence, it is essential that Unique Selling Points are identified at the early stage of
the business.
At current, we can examine that most metaverse business concepts lack USP’s. In
Deliverable 1, various metaverse platforms and their “USP’s” were identified. However,
upon closer inspection, such as in the table below we can see that these unique selling
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points are not so diversified as they all focus on user experiences and content creation
features. This is negligible in the early stage of metaverse business when there are a few
key players in the market, however, as the industry develops, it will be increasingly hard
to have a distinct USP that will generate Service Followers. This is why other search
engines in Web2 had a hard time surviving past market entry level, as customers are not
likely to use two platforms that se rve the same function.
Note: Table produced inhouse. Information sourced by individual platform websites.
Lastly, at current there is no integration of metaverse platform concepts. This means that
each metaverse platforms are a standalone carbon copy and that avatars from one
universe cannot enter other platforms. The integration is likely due to big players not
wanting to share their market and to protect their USPs, hence, opportunities for vertical
integration as a business strategy are limited. However, horizontal integration
opportunities (such as with vendors or social media platforms) are possible.
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Revenue Streams
of Metaverse Platforms
5.0 Revenue Streams
Source: Bloomberg (2021)
According to the chart published by Bloomberg and based on Bloomberg Intelligence,
Newzoo, IDC, PWC, Two Circles and Statista, the metaverse market has been growing from
2020 and is still projected to growth steadily high until 2024 in social media ads, gaming,
AR, VR, Hardware, Gaming Software, Services and Ads, showing a specially high growth
in Live Entertainment which has been already in practice in many platforms through virtual
concerts, artist like Travis Scott, Justin Bieber, Marshmallow and Ariana Grande have
already performed in the Metaverse.
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Only with Live Nation Concerts, we can see a recovery path that may exceed $200 billion
in 2024, roughly flat vs. 2sports019, as these businesses slowly recover from the Covid-19
pandemic, based on our analysis and data from PWC, Statista and Two Circles.
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With a separate chart, Bloomberg showed us that the growth of the gaming industry has
been pushed by 3D Virtual Worlds, just like the metaverse, creating a $413 billion dollars
industry in the primary market. In 2020 the highest revenue was from Software and
Services with $183.3 billion dollars, followed by Game Hardware with $63.5 billion dollars,
In-Game Ads with $31.8 billion dollars and lastly AR/VR with $4.7 billion dollars.
Perfect World Potential Revenue Streams

Knowing all the potential of the metaverse, we want to point out the potential revenues
for Perfect World. Specially in the marketing industry, the metaverse is opening a whole
new “world” for digital marketing and advertising.
The UGC experience and NFTs, represents already a big part on other competitor
platforms, if we offer a virtual marketplace we can complete on this service and earn a fee
for all transaction done inside Virtual World, from the emission, selling to re-selling.
With Virtual Real State, either with lending to developers or the buy and sell land parcels,
the opportunities are infinite. At the same time, offer virtual goods and services inside the
metaverse provided by Perfect World.
We also believe that leveraging on the company’s know-how we can license their business
service and help other companies or business to create their own virtual world and charge
a license or royalty from this deal.
Inside the metaverse just as virtual concerts, an event promotion and hosting can be done
and charge for, either for virtual events or real-life events. Considering the popular and
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successful knowledge of Perfect World on the gaming industry. With their experience
creating and monetizing VR games or experiences shows represents an excellent idea.
Also, Perfect World has been popular in all entertainment industry, with successful movies
and tv series, all of these films’ intellectual property can be licensed into the virtual world
or even another platform.
With the capabilities of Perfect World and the huge market that is open with the
metaverse, we believe there are many opportunities to grasp.
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6.0 Business Strategies

Most metaverse business models are “trendy” but not sustainable. Therefore, we have
prepared a journey for Perfect World to enter the Metaverse industry. We have divided
them in four (4) phases, as long-term milestones to achieve their sustainable business
goal.
i. Phase 1: B2B business services.

ii. Phase 2: Attract Brand Followers for initial boom.
iii. Phase 3: B2C retention.

iv. Phase 4: C2C socializing features and monetary incentives.
6.1 Phase One: B2B Business Services

In Phase 1, we want Business to join us in this adventure. For this reason, we want to:
Offer service´s license for any business that wants to recreate their own metaverse version
to be immersive to either join Virtual World or any platform. For example, a AR experience
for their current physical store, so users can experience an immersive manipulation of
their products or service offered.
We also want to create a space inside Virtual World. Specifically designed for enterprise
sales meetings Where business can meet buyers and users from multiple parts of the
world without leaving home or the metaverse space. Inside this space, businesses can do
product announcements, educational sessions and conferences, product showrooms, any
company updates or even networking events.
Because Virtual World represents a “new world” we believe the huge market for marketing
need to be addressed. Therefore, Perfect World should focus on digital marketing to
increase ROI. The metaverse will open a new way of doing marketing. The possibilities are
myriad. They can be immersive, gamified or a traditional billboard display but inside
virtual world everything towards a specific brand and its business. We can even connect
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two non-competing brands to run a co-branded experiences to target the same
audiences and leverage each other’s reach across different channels.
6.2 Phase Two: Attract Brand Followers for Initial Boom

For Phase 2, to attract engagement of new users we want to use digital
Marketing through different social media advertisements like Instagram, TikTok (most
used social media platforms for our target consumers).
As our target consumers are MZ generation they are often targeted by social media
marketing because they are digital natives. With the abundant data online, research has
shown that target marketing is achievable. We also want to increase the number of
impressions and CTR (click-through rate) with these digital marketing.
At the same time, we will work side by side with Influencers, both Micro and Macro
influencers to reach to the most audiences in all Regions. We want them to make Virtual
World Viral, as "word of mouth" effect is still effective in this generation.
We are looking to take Virtual World to an Omnichannel approach both offline + online.
For example, Pop-up stores that offers a Experience-focused offline channel as an

extension of the metaverse through the use of VR device, make walking through virtual
world even more realistic.
6.3 Phase Three: B2C Retention

Through Phase 3, Perfect World should be planning to focus on retention rates and B2C
activities. This can be through the following:-
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Creating Service Followers: By Fine tuning UX and UI, and complete interactions with
clients through VR. Perfect World can leverage on their competitive edge (CAD resources)
by calibrating everything from product design to creating digital experiences.
B2C activities will require tangible, memorable and engaging experiences: Focus on how
to navigate businesses and their customers through Virtual World. Business can use this
technology to let customers experience a product before buying it in real life. With this
type of interaction there is an opportunity for business to gain feedback on customer
interaction preferences in the visual reality world.
Furthermore, at this phase, Perfect World can ideally begin assessing Virtual World’s
customer data to create credible retention strategies. According to Arena.im (2022) within
metaverse platforms, there are three dimensions to assess your current customer data:
via quantity, quality, and utility. By optimizing all of these factors, Perfect World can grow
rapidly.
• Customer Data Quantity. Count the number of customer profiles you have in
your databases. Ensure you check all of your tools and apps like email, customer
relationship management, and live chat.

• Customer Data Quality. The quality of your customer data also matters. For
example, do you have processes to test the data? Remove duplicates and errors?
Without quality control, it won’t be easy to run effective campaigns.
• Customer Data Utility. This dimension refers to the capacity of your

organization to use customer data to achieve your goals. Using Arena CDP, you
can see your customer data from multiple sources in a single place, making the
data much more valuable.
Source: Arena.im (2022)
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Lastly, refining who the customers are: By paying attention to lead prospects and nurture
them in the metaverse. Identify Lead Prospects and Lead generation via assessing
customer data / set up customer data platform The Metaverse is an avenue for B2B
marketers to reduce traditional methods of lead prospecting. Virtual World can support
B2C end–to–end engagement and commence the marketing process from lead
prospecting to customer acquisition and rewards.
6.4 Phase Four: C2C socializing features and monetary incentives.

For Phase 4, we want to focus on C2C features, with socializing features and monetary
incentives.
We want to allow our UGC to sell their creations on Virtual World. For example their digital
assets like NFT, or to offer their freelance service as influencer in the platform, or their
skills for renovation, decoration or construction of a virtual real state.
To facilitate this, we will Open a space to be an in-ecommerce platform, to work as
showrooms or even organized fashion shows of the created digital assets. As we

mentioned before, Social media companies of all stripes can expand their business in
virtual world. From video sharing to online dating, they can expand the experience to the
metaverse. People can have a first date or a birthday party inside the metaverse.
Users can even rent their virtual land as venues for these events or any ticketed events.
We can also explore the possibility of them renting their real state to another user.
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Conclusion
Our team began our Integrated Practicum Project journey with Perfect World on March
2022, we were excited to dive ourself in this new digital world and its potential. We found
out that many companies were looking to participate in this new wave of opportunities,
which are myriad. Although the concept of metaverse has long existed and has moulded
into several definitions throughout the decades, the business of metaverse platforms are
relatively new and still evolving in the industry sphere. Most of them with fast, bland and
lack of innovative products.
With what we are delivering in this report, we learnt throughout our research that despite
the vast content we have, these perspectives may differ drastically in the next year or few
months. So we attempted to narrow our focus through a business canvas model, as
opposed to just providing basic examples of revenue streams like “earn to play” models
or “NFT market potential”. Hence considerations for the business model based on real life
perceptions and opinions provided the foundation of our research.
After considering all findings mentioned in the primary and market research, we believe
that Perfect World can conquer this market. The company should consider its competitive
advantage and value propositions to create a new set of strategies to take their know-
how and apply it to the Metaverse progressively. By doing this, the company will be able
to offer a quality product with the essence of Perfect World on it.
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Accessed 25 June 2022.
“How to Make Money in the Metaverse - 11 Ways of Generating Revenue.”
Sensoriumxr.com, sensoriumxr.com/articles/best-ways-of-making-money-in-the-
metaverse.
“How Will the Metaverse Be Monetized?” World Economic Forum,
www.weforum.org/agenda/2022/02/metaverse-monetization-business-guide/.
“Know about the VRIO Framework.” Business Upside, 4 Jan. 2021,
businessupside.com/2021/01/03/know-about-the-vrio-framework/. Accessed 25
June 2022.
“Mundane Chores Are All the Rage in Gaming.” The Economist, The Economist Newspaper,
https://www.economist.com/culture/2022/06/14/mundane-chores-are-all-the-
rage-in-gaming.
“Building a metaverse with Chinese characteristics.” The Economist.
https://www.economist.com/china/2022/02/04/building-a-metaverse-with-
chinese-characteristics
“Herman Narula on why the metaverse matters.” The Economist.
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https://www.economist.com/by-invitation/2021/11/02/herman-narula-on-why-
the-metaverse-matters
“From Apple to Google, big tech is building VR and AR headsets.” The Economist.
https://www.economist.com/business/2022/04/09/from-apple-to-google-big-
tech-is-building-vr-and-ar-headsets
Onibada, Ade. “‘I Don't Google Anymore. I Tiktok.".” BuzzFeed News, BuzzFeed News, 17
June 2022, https://www.buzzfeednews.com/article/adeonibada/tik-tok-works-like-
google-for-search.
Tan, Zyane. “Top Metaverse Projects 2022.” Finder.com, 14 Mar. 2022,
www.finder.com/top-metaverse-projects.
“Tech in Asia - Connecting Asia’s Startup Ecosystem.” Www.techinasia.com,
www.techinasia.com/the-entrepreneurs-bookshelf-the-power-of-unfair-
advantage. Accessed 25 June 2022.
Warren, Lydia. “The 50 Best Brands, According to Gen Z.” Business Insider, Business Insider,
17 Nov. 2021, https://www.businessinsider.com/best-brands-according-to-gen-z-
comparably-2021-11.
Bloomberg QuickTake Originals “The Metaverse Is Coming for Your Office”
Jun 21, 2022 https://www.youtube.com/watch?v=Hg5P2KI63
Agnes Larsson. “The Awesome Potential of Many Metaverses TED”

Jun 3, 2022 https://www.youtube.com/watch?v=IBsSUVIwupQ&list
“Value creation in the metaverse” McKinsey & Company. June 25, 2022
Page 65 of 87
https://www.mckinsey.com/business-functions/growth-marketing-and-sales/our-
insights/value-creation-in-the-metaverse
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Appendices
Appendix A – Primary Research Survey
(1) International Survey
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(2) Local Survey
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Appendix B – STP: Customer Profile
Appendix C – The Follow-up Survey: Consumer Perception Mapping
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Appendix D – Perfect World responses to VRIO Audit
Resource or Value Rarity Imitability/non- Organisation
Capability substitutable
Virtual World Yes Maybe not Yes Yes

Product
Financial Yes Compared No Yes

Resource (or with other
cost top
advantages) companies,
we may not
have the
rarity.
Human Yes Same level Maybe Yes
Resource (or higher)

(people skills) with the top
companies
Innovation/R&D Yes Yes Yes Yes
UGC Tools Yes Maybe May not Yes
Page 83 of 87
Appendix E – Perfect World Q&A responses to Scope Audit
Meeting Discussion Outcome
Date: Friday, 8 April 2022 | Time: 17:30 BJT
1) Can we leverage on the information that PW already holds? i.e., “All History” data
can be used for a “library or museum” feature in the metaverse; “Perfect Lingo” data used
to learn language inside the Virtual World.

We can provide the relevant data of other products for your analysis, while an additional
confidential agreement is required. In addition, if you want the functional modules of

other products to play value in the virtual world. For example, ‘Perfect Lingo’ can be seen
as a ‘content supplier’.
2) What would you say if the main project objective for our scale? E.g. Is it the
business plan or market research?

We want to ensure we meet your delivery expectations. Market Research + plan of profit
model. For market research, we hope to get more information from the users’ perspective
for product design. What scenarios do users expect the virtual world can provide? What
services do they wish to obtain? What are you willing to pay for? The frequency and scale
of payments is? Based on market research, you can design a modular strategy (how to
charge, profit means).

3) Should the research focus in the current Chinese market for metaverse only?
No, It’s a global product. We will provide a Chinese version and an overseas version.
Because of the restriction of Chinese laws and regulations, the data will not interconnect,
and the design of the economic system and charging models can be different.
The R&D team has deeper understanding of Chinese users. We know you have the
overseas research advantage.
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4) Considering question 3, does the business plan need to focus on making “Virtual
World” feasible and commercial for July 2022? Including suggested partnership and
revenue models?
No, July 2022 is the first technical alpha test in the Chinese market (not face to a lot of
users, nor will it join the commercial model). The launch node is around Q2 in 2023. You
can set this in your business plan.

5) Should we consider launching “Virtual World” to the international market for the
business proposal? I.e., consider revenue models and RMB conversion.

Do more research on international market. You don’t need to consider RMB conversion.
6) Is there a specific target consumer you would like us to take into account? I.e.,
GenZ.
Considering the Chinese legal and regulatory issues, the core target group may mainly
post-90s (20-30years old) then expand to a slightly older age group.
7) Other than the product launch date (July 2022), are there any other key
milestones we should be aware of?
2022 Q3-Q4: Will conduct the first alpha technical test in the domestic market
2023 Q2-Q3: Will launch a bit of commercialized content (To B or To C)
There is no event node for the overseas market, but it will be later than the Chinese
version.
8) Can you share with us, PW short-, mid- and long-term goals with this project?
Short-term: attach users to build their own virtual identity and virtual home, form a certain
social relationship.
Mid-term: using incentive method (e.g., economic systems) to encourage users create
UGC content. Transfer offline communication scenarios to the VIRTUAL WORLD. Achieve
commercial break-even.
Long-term: a mature business model, a self-growing content system, a usercreated virtual

world.
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9) Perfect World mentioned a set of requirements for the project, other than the
below highlights – do you have anything else you would like us to include in the
project deliverables or other important areas you would like us to focus on?
Key Project Highlights:

a. Research on Industry Analysis and Market;
b. Study of Competition Analysis in (1) Same-type entertainment companies and

(2) Metaverse platforms.
c. Propose sustainable business model - e.g. business activities, portfolio (e.g. real
estate, Universal Studios); and;
d. Identify External Business Corporation to buy IP.

10) What would you say is the biggest obstacle, barriers, or risks in your product
launch or to sustain its business activity? Competition or structural regulations?

• Domestic: users’ awareness. If the virtual world or metaverse product
has sufficient monetization ability.

• Whether the services, we provided are the real users’ needs. If users have multiple
demands, which kind of demands are more valuable?

• Overseas: if the product combined with blockchain, will there be enough
incremental market dividend in the next 2-5 years -- The legal and regulatory risks
exist?
11) Would you say that Virtual World’s AI algorithm and virtual code/virtual assets
are its greatest assets/what do you feel is your product’s unique selling point? We
want to leverage on these assets in the business plan.

In terms of virtual assets, if we can motivate users to create UGC content through tools
and economic systems and understand this content as virtual assets, it can be designed
as a product highlight.
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AI algorithms often rely on strong technical reserves and pre-training models. This part
may cooperate with external tech suppliers, which may not be the biggest highlight of the
project.
12) Does PW follow a specific marketing plan for all its products? If so, can you
please specify?
Products have diverse marketing plans. Unlike general game products, our project will not
use a short-term, large-scale, and high-explosion model for marketing. It will be regarded
as a content platform, it will gradually attract user to enter, build the content
progressively, gradually growing marketing path.
13) Do you have any budget restrictions for this product launch?
No.
14) Do you have all the resources you need internally for this project or are you
considering outsourcing part of the project execution? If so, what parts would you
outsource, and how much do you expect to save in terms of expenses?

At present, the main part is the internally self-research cost. There may be some
procurement of technological supply (TTS/AI). Now we do not need to consider cost-

saving.
15) Let us know if there is anything else you would like to discuss.
To B business model can be one of the directions such as online auto shows. What offline
To B services work better online? (Consider rendering tech on the 3D engine side).
Page 87 of 87

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Guanghua

1.0 Primary Research Background ................................................................................. 3

1.2 Data Presentation and Key Highlights ................................................................. 7

2.0 STP Analysis: Identification of Target Consumers ........................................ 27

3.0 External Analysis ........................................................................................................... 36

4.0 Internal Analysis ............................................................................................................ 42

4.1 SWOT Analysis ................................................................................................................ 42

4.2 VRIO Analysis .................................................................................................................. 45

4.3 Competitive Analysis ................................................................................................... 48

4.4 Unique Value Proposition ......................................................................................... 50

5.0 Revenue Streams ........................................................................................................... 53

6.0 Business Strategies ....................................................................................................... 58

6.1 Phase One: B2B Business Services ........................................................................ 58

6.3 Phase Three: B2C Retention ..................................................................................... 59

Thank you all for your kind support.

1.0 Primary Research Background

practical product improvement decisions.

two pre-defined groups:-

ii. Local Chinese responses.

Data Collection Procedure

Study Population and Rationale

A total of 93 overseas participants and 46 local participants were approached. The

About 26% of the respondents were identified as ages ranging 21 to 30 (Generation Z)

Unemployed/looking for work

ii. Local Audience

Risk Factor(s) and Limitations

World. Thus, the following was included as survey introduction:-

1.2 Data Presentation and Key Highlights

a. Knowledge or past experience on Metaverse concepts

Knowledge on Metaverse Concepts Ownership of Digital/Crypto Currency

ii. Local Audience

Knowledge on Metaverse Ownership of Cryptocurrency

Contrastingly, the local survey population considered their knowledge on metaverse

consisted of MBA candidates and regulatory aspects of digital currency in China.

b. Willingness to join Metaverse platforms

Willingness to Pay to Join the Metaverse

“service followers” identified in the secondary research.

ii. Local Audience

Willingness to Join the Metaverse Willingness to Pay to join the Metaverse

willing to pay to access.

c. Expectations for Metaverse experience

Expected Experience in the Metaverse

presents that concept of metaverse experiences is still highly related to “gamification”.

ii. Local Audience

Expected Experience in the Metaverse

metaverse. Moreover, there was a relatively equal percentage of interest in Monetary

It is important to note that expectations for metaverse experiences in local responses

d. Awareness of Metaverse Marketing

Are you aware of any memorable metaverse event or marketing campaign?

Awareness of Metaverse Marketing Campaign

A higher percentage of lacked awareness of metaverse marketing campaigns corresponds

ii. Local Audience

Awareness of Metaverse Marketing Campaign

report). Furthermore, the suggestion of “Academic Research” is a unique aspect of

e. Motivation factor to use Metaverse platforms

In the data cleaning process, an amalgamation of the following questions were

(1 = unwilling ; 5 = very willing)

ii. Local Audience

between Chinese IP and retail brands.

f. Preference for Brands or Industries on Metaverse platforms

What kind of brand/industry would you like to see in the metaverse?

Interested Industry to be seen on Metaverse

Food and Beverages 38

Paradox, Riot Games, GameStop, SquareEnix, Fromsoftware.