China's homegrown alternative to Second Life is in development; it's called HiPiHi, and 10,000 ethnic Chinese from the mainland, Hong Kong, Taiwan and Singapore are currently testing it. A recent Newsweek feature went in-depth with HiPiHi's 38-year-old CEO and founder, Xu Hui, whose goals include 100,000 users signed up in the first three months and partnerships with international firms to establish virtual continents. Hui tells Newsweek he'd like to see disparate virtual worlds interconnected as part of the same universe; "We're on the same road to a dream—virtual worlds are just beginning," he says.

The article discusses some of HiPiHi's challenges, like authoritarian Beijing's censorship of anti-government criticism or sentiments in support for Taiwanese or Tibetan independence, among other verboten issues. Because of this, the article says, any online communication is subject to monitors quashing "incorrect" speech. "There will need to be some HiPiHi nannies—it can't permit a lot of the things that Second Life permits," says David Wolf, CEO of Wolf Group Asia, a Beijing-based consultancy. "It will be Second Life with Chinese characteristics."

It's also unclear if HiPiHi will be allowed to have a virtual economy, either-- the article says it hopes to have something akin to Second Life's Linden dollar, but Beijing policy-making can be heavy-handed and capricious.

It can't be predicted how well the freeform virtual world environment will be embraced by the Chinese-- outside of metropolitan areas, as the article notes, few have access to the highest-end technology, and Chinese gamers tend to prefer more structured and immersive gaming environments like World of Warcraft. "The virtual-life model hasn't been tested in China yet, and it will be a challenge for operators to get a large number of users in the beginning," says Liu Bin, a Beijing-based analyst with tech and Internet consultancy BDA. "I think this is a major problem."

On the other hand, a strictly-controlled virtual environment, or what the article calls a "family-friendly Second Life", might be appealing to Chinese women and parents, and as such could enjoy a broader audience and more acceptance-- especially since the Chinese team is apparently endeavoring to improve on the Second Life interface and make it more user-friendly.

[Via Newsweek]

GigaOM's Wagner James Au recently visited Beijing, where he spent some time with HiPiHi, the "Chinese Second Life" we heard about somewhat recently. From his detailed impressions:

For a Second Life user, the most striking thing about HiPiHi is how similar its interface is – reverse-engineered is probably the more accurate term. (This despite the fact that Second Life’s confusing user interface is easily its weakest selling point.) Xu said he conceived of the basic idea before even knowing about Second Life, but it’s abundantly clear he and his team have modeled a lot of HiPiHi on it. Like Second Life, content is streamed from the networked HiPiHi servers — which comprise the world — to users’ computers.

Residents can shape their environment with a library of prefab, customizable artifacts (furniture, homes, etc.), or for the more ambitious, in an atomistic creation system that very much resembles Second Life’s tool chest. (Albeit without a scripting system, though Xu’s team promised one will be available in October, when HiPiHi is slated to be launched) The 16,000 or so beta users/testers are drawn from the Chinese regions, but Xu said English and Japanese versions will launch later this year.

A key distinguishing feature of HiPiHi, Au says, is that subscribers retain the underlying IP rights to all of their in-world creations, which would separate it from all other MMOs thus far. According to Au, HiPiHi founder Xu Hui is working with Creative Commons China to create a CC-licensing system for user creations in time for HiPiHi’s commercial launch.

What about the most obvious questions we've had about HiPiHi -- how will it deal with China's heavy-censorship government? Au explains:

Xu said cybersex in HiPiHi will be OK, as long as it’s done in private; political talk on the other hand, will be prohibited. To do this, Xu will run user chat through a keyword-filtering system derived from China’s Great Firewall. Zhang said the beta users are already voluntarily watching what they say.

“It’s self-censorship,” he offered. “They know what kind of words will be very dangerous.” But while you can’t type, for example, “Falun Gong” in chat, you’ll probably be able to game the filter by creatively misspelling the banned meditation sect. And the filter, the HiPiHi team acknowledged, won’t be able to block non-textual acts of dissent — say, protesters wearing user-made Falun Gong T-shirts.

[Via GigaOM]

Chinese virtual world HiPiHi has announced a 3-way partnership with Hollywood-based Centric, an interactive agency focusing on social media and virtual worlds, and Japan-based virtual world service provider 3Di, to focus on creative arts inside HiPiHi.

Centric also maintains offices in Shanghai and Tokyo. As for 3Di, its recent projects include open-source community platform Jin-sei and Movable Life, a system that allows users access to Second Life using a web browser.

The company says the partnership is geared to take advantage of the virtual world medium's potential for art, media and video production. Centric says it will leverage its experience in Hollywood to bring internationally renowned projects into HiPiHi and promote it as an international platform for creative expression, while 3Di's content and service development base will support the projects.

HiPiHi founder and CEO Xu Hui said, "Virtual worlds open up new possibilities to redefine the mode of artistic/cultural production and creative expression, transcending the distance between art works and spectators, constructing a brand new interactive instrument of artistic creation and expression. Centric and 3Di will bring artistic creativity and cutting-edge media production technologies from Western culture into the HiPiHi world."

He continued, "This mix of Western-Oriental artistic and cultural fusion and exchange, in a virtual world medium that cuts through space-time constraints, is about to begin and give rise to amazing and wondrous opportunities. The eventual benefit in all these activities will far exceed any economical value affixed to it and will be a significant innovation in terms of fusing art and information technology."

[Patrick Murphy contributed to this report.]

Chinese virtual world HiPiHi recently announced a 3-way partnership with Hollywood-based Centric, an interactive agency focusing on social media and virtual worlds, and Japan-based virtual world service provider 3Di, to focus on creative arts inside HiPiHi. Centric has said it plans to leverage its Hollywood position to bring new projects into HiPiHi and promote it as an international platform for creative media.

Worlds in Motion spoke to Jason Stoddard, Centric's managing partner of strategy, about the company, the partnership and his perspective on the industry.

First off, could you give us a capsule history of how Centric came to be what it is today?

The short answer is that we're an agency working in "social spaces and virtual places," that has grown from a conventional branding and marketing background. The slightly longer answer is that I founded Centric in 1994 as a marketing agency, but my background in technology quickly pushed us into the early internet revolution.

We were developing sites in 1995 and rode the Web 1.0 wave, adding leading-edge services along the way, such as some of the first integrated internet marketing programs. Today, we're continuing the push into new realms of marketing--specifically social spaces such as Facebook and Mixi, and virtual places such as Second Life and HiPiHi--because we believe that the emotional connections created here are much more powerful than the online tools of the Web 1.0 days, and will catalyze change that is larger than the entire internet revolution to date.

"Agency of Change" is quite an interesting slogan; how do you apply that attitude to your work in social virtual worlds?

We took the tagline of "Agency of Change" in early 2006 to reflect the accelerating change we were seeing in social spaces, virtual worlds, and mobile development. For us, it serves as a reminder that the only constant is change. No matter how much our clients want to put on the brakes and stay with what is tried and true and comfortable, we need to move forward into new realms. It keeps us on our toes. And, in every space we work in, we start by asking, "How can we change this?"

This is one reason we have not built one standard corporate monument in virtual worlds, or deployed one standard fake-friending program in the social spaces. People forget how much change we've been through in the last 10 years--Google didn't exist in 1997. eBay was still selling Pez dispensers. Cellphones were big dumb objects. Most people didn't have a personal email. Only 60 million people worldwide were on the web. Hell, people forget the largest Web development agency of the day. USWeb, once with a multibillion-dollar market cap, disappeared completely and without a trace.

Centric holds offices in Hollywood, Shanghai, and Tokyo; could you talk a bit about marketing on today's multi-cultural internet?

Certainly, not all things work across all regions, and that is being reflected in much more localized content in international marketing. Social spaces and virtual places are even more than multi-cultural; we believe they represent a different culture entirely. These are areas where most people congregate on an entirely voluntary basis. There are many places in the real world where you have to be in close proximity to people you wouldn't normally choose to meet, to interact with.

On the web, you can avoid interaction. In a virtual world, you're there to interact. You don't have to eat, don't have to drink, don't choose a car for transportation. Everything is instead about image and interaction. This is a fascinating switch, whereby people around the globe choose the locations, ambiance, and objects they want to be surrounded with when interacting with others. The opportunities for a true mixing of cultures is huge.

So tell us about what Centric is doing with HiPiHi.

HiPiHi is very interested in being a portal between China and the rest of the world. We are working closely with both HiPiHi and 3Di to develop strategies for extending HiPiHi's reach globally, while at the same time working with companies to develop experiences in the HiPiHi space. We have a focus on entertainment due to our main office's location in Hollywood, but it's more than that. We believe that entertainment properties offer the most viable cross-cultural opportunities for virtual worlds.

Ultimately, everything we do in any virtual world is about storytelling, about people, and China has a rich cultural and storytelling background. It's a perfect space to bring in Western stories and film properties, for example, and allow the community to bring in their experiences with Chinese stories and film to create something entirely different. This collaborative environment will also work both ways, and we feel it will allow for some experimentation with the storytelling process.

How did the partnership come about?

We went to Beijing in April of this year specifically to meet with HiPiHi. Though we didn't know a lot about them at the time, we were excited about the possibilities presented by a virtual world in China, and we were eager to get involved early in this opportunity. As HiPiHi's first Western partner, we explored possible ways to bring clients and users into this new virtual world. Now that the platform is moving toward public beta, we agreed to extend our partnership, along with 3Di, in order to fully realize the collective goals of all three companies.

Has the Shanghai office had the opportunity to do creative marketing work in Chinese social virtual worlds yet? If so, could you give an example?

We're currently exploring opportunities to bring projects into Chinese social virtual worlds, but don't have anything we can talk about at this point.

How do you see the state of social virtual worlds in China today, especially in contrast to America?

Social virtual worlds in China are really several different beasts. There's huge participation in MMOs, of course. Graphical chat clients are definitely on the rise. In addition to free-form virtual worlds like HiPiHi and Second Life, upcoming social virtual worlds like novoKing and uWorld will attract more people into virtual environments.

That said, most of the social virtual worlds are yet to be fully developed. To an extent, the massive QQ 2D social network is a social virtual world. Profiles, groups, and chat are its primary functions, but the network has its own virtual currency, its own avatars, and shows signs of moving toward the virtual world medium. The mobile component here is huge. In contrast, the U.S. is barely scratching the surface of mobile-based social-networking, let alone mobile's use in virtual worlds.

What sort of creative process does Centric go through when working with a client?

We drink lots of tequila and talk crap about their competition. Well, maybe not.

Seriously, great creative is about understanding the clients' goals, their position relative to the competition, the opportunities they have open to them, and the available budget. We start with that, then we do the research on the relevant platforms that they might play in, whether it's a social space or virtual place. Then, based on that understanding, we develop overall creative ideas, themes, and tactics that can be used to achieve their goals.

For example, a limited-budget campaign we're doing for an entertainment company, with the goal of engaging as many fans as possible, has resulted in a Facebook-only game application. A large-budget campaign for a Fortune 10 company, with the goal of creating an extensible platform in multiple social spaces and virtual places, has resulted in a proposal that covers multiple virtual worlds and social networks, and encompasses application development, gaming, virtual presences, smart objects, and artificial intelligence.

Which platforms are you currently working on, and are there specific advantages to one over the other, depending on the situation?

We focus on categories, rather than platforms. We're working in three categories: First, virtual worlds. Specifically, free-form and user-created virtual worlds such as Second Life and HiPiHi. The reason we concentrate on free-form virtual worlds is that they tend to aggregate the creative and technical users who are early adopters, rather than just a general audience. We want to touch the influencers of the future.

Second, social spaces. Specifically, Facebook, MySpace, YouTube, Flickr, Mixi. We cut across a broad range of these, because the right venue depends largely on the type of campaign. Facebook is great for one demo, MySpace is great for another.

Third, mobile. We're starting to deploy a lot of web applications and mobile components, especially since the addressable market is 3X that of the PC space in China, and American teens think phones are more indispensible than computers. And yeah, we also do a lot of "conventional interactive" development--a descriptor that raises a lot of eyebrows among people who are still trying to digest the interactive space.

Are there any trends or technologies on the horizon for social virtual worlds that you hope to see more of in the future?

Wow. There are so many things that are not more than a factory in China away from commercialization. But let's start with the basics: UI and controller. Get Apple (or Nintendo) on these worlds, ASAP. The UI needs a lot of work (yes, even the OnRez browser). And we need a dedicated controller. It's amazing that so many people have been able to suspend their disbelief using a keyboard and watching these worlds on a small screen. But beyond that: markerless facial expression capture, and markerless gestural capture.

These technologies are here, right now, and they're very close to being commercialized. Real-world heads-up displays, either immersive or overlay, will absolutely change the game in terms of computing and virtuality both--they'll make virtual worlds mainstream. And we're very close to that technology as well. True immersion, whether it's in the form of a bodysuit and playroom, or a brain-machine interface, is much farther off--but how far, once we've accepted augmented reality displays in daily life?

Despite projections by some that its userbase would grow to 10 million by year's end, HiPiHi, China's largest virtual world, has recorded only 48,000 registered users so far, Business Week reports. NovoKing and UOneNet, two other Chinese virtual worlds which are still being tested by closed groups, have respectively 10,000 and less than 1,000 users. For comparison, Second Life has an estimated 13.5 million "residents."

While the three companies claim to not have invested in any marketing yet to attract more users, they've still managed to secure Chinese and foreign corporate partners hoping to build their brands, treating the space as China's version of Second Life. Companies such as P&G, Intel, and Hewlett-Packard have created floating billboards and virtual salons to reach China's mid-20s males.

With the limited audience, however, advertising isn't nearly as effective as companies had hoped. As a result, Chinese companies are beginning to introduce new applications to the virtual worlds, such as training factory workers, conducting online auctions, or opening virtual classrooms.

Jiangxi Copper, China's largest copper company, has already trained its first batch of workers through a training session held in NovoKing in late April. "The effectiveness of the traditional way of training new workers is extremely low," said Jiangxi Copper's human resource manager Xiong Ying. "It's not keeping pace with the speed [with which] our company is developing. The traditional training model needs to be reformed. The only way is to do so with virtual reality training."

UOneNet is considering setting up 3D mall for buyers and sellers to interact, as well an e-learning community partnership with a Chinese TV Station. Said UOneNet president Eric Ye: "The core is really this multiperson interaction in real time at such a low cost. You never had this before this 3D virtual world. Virtual worlds will eventually be an advertising platform. [But] when you start off, you have to start with things that are innovative and just show the potential to boost the value."