Digital Domain, creator of the Avengers visual effects, explains how brands appeal to the Gen Z consumers by investing in virtual humans

As visual human gradually enter the mainstream consumer sector in China, brands take note of their possibilities for reaching Gen-Z customers through this technological innovation.

Digital Domain, a Hong Kong-listed visual effects giant and technology company behind the virtual human version of Chinese superstar Teresa Teng, see applications of virtual humans in game, advertisement, education, social media possess huge business opportunities.

Legendary Chinese singer Teresa Teng passed away in 1995, but virtual Terea Teng appeared on stage at a 2022 New Year’s Eve concert presented by Jiangsu TV.  Photo credit: Digital Domain

“With the covid-19 pandemic dramatically reducing consumers’ ability to travel, digital economies got a major boost from the lockdown as people have turned to online games and short videos to fill the entertainment void. As a result, the digital human sector has now arrived at an eruption point, I think the application of digital human in short videos, commercial (sponsorship and advertising), games, education, possess huge business opportunities and growth potential,” Daniel Seah, CEO of Digital Domain told PingWest.

Virtual idols have started appearing in the Chinese news headlines and media at an increasing rate since last year. The virtual pop stars Luo Tian Yi and Hatsune Miku sang original songs on the Chinese video streaming site Bilibili; the virtual influencer Liu Yexi amassed millions of fans overnight on the short video platform Douyin (the Chinese version of TikTok) by posting make-up tutorial videos; Alibaba DAMO Academy’s virtual employee Dong Dong even sold Olympics merchandise with the help of his adorable Beijing dialect in livestreaming shows on Taobao Live – it is clear that virtual humans have a great commercial value and are on their way to become an integral part of people’s daily lives.

How did they manage to become mainstream in so many different fields? Well, quite unlike the older generations, millennials are more prone to spend money on virtual experiences, especially on ones with sentimental and/or emotional values attached to them. An example of a product with emotional value is a virtual human who acts as a personal companion and aims to develop an emotional connection to its user to satisfy their need for communication, affection, and sense of social belonging.

Needless to say, virtual humans can do more than just accompany and comfort lonely people.

As for brands and enterprises, experimenting with virtual humans in various business models can often offer new perspectives of consumer engagement and even help predict or preset the likes and tastes of the next consumer generation.

A factor which aided the rise of virtual idols is the declining status of China’s conventional entertainment after a series of negative moral, relationship, and tax issues involving beloved real-life celebs came to light earlier this year. As the members of the millennial and Gen Z generations tend to develop parasocial relationships with their favorite celebs, the negative news spreading online were bound to taint the image of the idols and inevitably instill a feeling of betrayal in their fans.

Brands relying on these celebrities’ endorsement have suffered major losses after their ambassadors’ images were ruined by the scandals, so to hedge against such losses in the future, more and more enterprises have begun considering virtual idols as a viable replacement of celebrities in their marketing activities.

“Recently, we’ve gotten lots of feedback from brands containing complaints about high paid celebrity endorsement deals being unable to generate adequate sales growths. Moreover, it would be disastrous if their contracted celebrities were to suffer social death due to unpredictable scandals. Commerce (sponsorship and brand advertisement) is one of our main areas of focus for the new virtual human business, and we will be developing a matrix virtual intellectual property (IP) to match the different types of brands to help them reduce their promotional budgets”, Daniel Seah shares, pointing out the inevitable incorporation of virtual influencers in different platforms.

With a new workforce of virtual humans, brands will not need to worry about any ‘rollovers’ of their public image, and an additional perk is the round-the-clock availability of this new type of influencers. For example, virtual influencers can live-stream and sell goods for 24 hours straight, no rest needed.

Digital Domain started working on their virtual Teresa Teng in 2012, ultimately creating a photo-realistic hologram of the iconic Taiwanese singer, who died an untimely death at the age of 42 in 1995. The hologram has already been a collaborator at multiple live stage performances over the years, including at a joint performance with the pop idol Jay Chou in the Taipei Arena (2013).

Since its inception in 1993, Digital Domain has used computer graphics, AI, and face rendering technologies to develop virtual effects for Hollywood blockbusters such as the Titanic, the Transformers series, Spider-Man: No Way Home, multiple Avengers films, and Ready Player One.

Since its inception in 1993, Digital Domain has used computer graphics, AI, and face rendering technologies to develop virtual effects for Hollywood blockbusters such as Avengers films. Photo credit: Digital Domain

Years of experience in the field of visual effects have rendered Digital Domain an expert at creating realistic and highly customized digital humans, some of which are representatives of companies like BMW and NFL.

In March 2021, BMW invited the CEO of Digital Domain, Daniel Seah, to join the company’s virtual human Elbor in a commercial for the BMW’s 5 series.

Virtual human Elbor. Photo credit: Digital Domain 

Digital Domain has made its virtual human customization services available to companies in China, allowing brands like WangLaoJi to boost their sales numbers of its herbal tea with the aid of the virtual humans Nonoka and Xiaoai via live-streaming sessions.

“In the current Chinese market, most virtual humans just have an animated face and body that caters to the ACG (animation, comics, games) audience. Digital Domain focuses on developing the visual effects and computer graphics side of idols to personify them and hopefully achieve a high rate of parasocial emotional bonds among the consumer base”, said Daniel Seah. With the help of graphics and AI tech, Digital Domain is capable of developing virtual humans that can replicate the natural movements and facial expressions of real people, down to the level of details like wrinkles and skin hair. To further improve the communication capabilities of the virtual companions, the company is also trying out various tech concepts, including text-to-speech, speech-to-text, voice-to-face, and motion-captured dynamic technologies.

With computer graphics and artificial intelligence technologies, Digital Domain can develop virtual humans that can simulate natural movements and a wide range of facial expressions, facial details like wrinkles and skin hair are all visible in its digital humans. Photo credit: Digital Domain

“As the advanced digital era progresses, virtual humans like Elbor and Nonoka will start forming digital workforces that fill in the customer service gaps across many industries, from public health and education to entertainment. The new digital workforce can help companies improve their return on investments (ROI), and lower their promotional budgets. Creating a better interactive experience and bridging the gap between the real and the virtual world will ultimately be the key to success for companies in the future,” claimed Daniel Seah.

As for how customized virtual humans can be implemented in games to make them more immersive, Daniel Seah told PingWest that “the thing that makes multiplayer games attractive is playing against another human brain, and knowing that you can count on them in game modes such as team deathmatch in online battle arenas. At some point in the future, you might be able to create a digital version of yourself in games, powered by tech like virtual reality, augmented reality, and artificial intelligence. Imagine if your digital clone could simulate your natural human behavior in games and team up with the real you to challenge other human players. Gaming companies would love to pour a large amount of money into this type of research and development to make games more competitive and interesting.”

Games like Fortnite have already given us a preview of what good implementation of virtual humans in a game looks like – it has hosted dozens of the virtual concerts of artists like Snoop Dogg, Ariana Grande, Travis Scott, allowing them to interact with Gen-Z fans through an innovative marketing approach.

In addition, Daniel Seah and his team are looking at other possible applications of the digital humans in areas including public services, social media, and cartoon characters that can be used for edutainment (educational entertainment). “Digital humans could be used to create characters for education purposes, like teaching English. The main challenges Asian students face when they learn English are shyness and lack of understanding and interest in the English language activities. The learning process could be easier and more fun if students could talk in English to an animated teaching assistant like Elsa, the main character of Walt Disney’s Frozen, instead of to a human teacher who will probably always keep a straight face and look serious in front of their students.”

Going forward, Digital Domain is planning on developing a matrix of virtual human intellectual property not only for industrial purposes, but for average users as well, according to the company’s CEO.

“The early stages of a new tech sector are a cash-burning game that only tech giants are willing to play without the guarantee of any gains. We will keep on investing, researching and developing in hopes of eventual success, just like the idiom “when you row a boat upstream, if you stop, you fall backwards” warns, said Daniel Seah.