Several online sources are reporting that Beijing-based HiPiHi has gotten hold of between $7-$10 million in venture capital funds to launch a virtual world for the people of China to live in online (see Redline China or Pacific Epoch). The investors are unknown at this point.

HiPiHi hopes to launch a virtual world for China that would be similar to Second Life, "a 3-D virtual world entirely built and owned by its residents," according to that company's website. Virtual worlds are generally seen as the next step in online gaming, a move away from multiplayer online role-playing games (or MMORPGs) that have usually been fantasy based sword-and-sorcery games.

The landscape is becoming crowded in the race to launch a virtual world in China. The Financial Times reported earlier this month that Shanda Interactive Entertainment (Nasdaq: SNDA) was also interested in developing and marketing a virtual world game similar to Second Life for China. Shanda is China's leading online gaming company with an market share of about 19 percent and is seen as having an advantage because it already has a large community of users. In addition to Shanda, HiPiHi will have to compete with Ambient Sound Investments (ASI) and their Hong Kong-based Frenzoo virtual world. ASI, owned by former co-founders of Skype, recently bought into Frenzoo.