ACG gaining traction in China

Zhang confirmed the market potential. He said he bought merchandise like pillows and glow sticks embossed with images of And2girls. He even shot a video to give his blessing to them on their first anniversary. After finishing his college entrance examination, he plans to visit their birthplace Beijing.

Liu Yong, chief operating officer of Beijing Mizhi Tech Ltd, the producer of And2girls, said ACG will become a future trend due to great demand in China.

"For ACG lovers, the virtual world is more real than reality itself. The more developed the society, the richer is its people's imagination. It's a way for the younger generation to show their individuality, that they are totally different from the previous generations."

The company invested 30 million yuan ($4.39 million) in 2017 to develop the virtual idols and received 60 million yuan from investors in a new round of financing in late July. Most of its over 10 million fans are middle school students aged 13 to 18, according to Liu.

He said about 45 to 50 percent of cost was used in research and development of technologies like optical motion capture. Women in specially designed black suits move behind sophisticated machines, so that their gestures and movements projected on to a screen could be copied and imparted to the animated figures. The voices of these women could also be used as dubbing or playback tracks for ACG content.

Content production itself accounts for no more than 30 to 40 percent of total costs, which include marketing, infrastructure, wages and equipment. For example, producing an original song costs over 100,000 yuan. The band now boasts a portfolio of 20 songs.

Investments are expected to generate healthy returns over the long term, going by the experience of Disneyland, which owns many lucrative intellectual property rights, some dating back to the 1930s but still popular worldwide.

"The most valuable image in the world is that of animation," he said. "Its value can be accumulated through several years or even decades," Liu said.