Tencent has changed its mind about releasing VR devices
Software

Tencent has changed its mind about releasing VR devices – the metaverse has taken a back seat

China’s Tencent Holdings is dropping plans to enter the VR market as the current economic climate forces the Chinese tech giant to cut costs and staff at the Metaverse. Three independent sources “familiar with the matter” told Reuters.

    Image source: 大神/unsplash.com

Image source: 大神/unsplash.com

The world’s largest games company had ambitious plans for VR hardware and associated software. Last June alone, the Augmented Reality (XR) department hired around 300 people. In particular, the concept of creating a game controller in the form of a ring was proposed, but the inability of the project to make a quick profit and the need for large investments to create a competitive product became one of the main factors that forced the strategy to be revised.

According to a source, the XR division did not turn a profit until 2027, which does not fit into the company’s new strategy. Previously, Tencent also planned to acquire gaming smartphone maker Black Shark to expand its hardware development capabilities and add another 1,000 professionals to the division. However, with a change in Tencent’s strategy, the deal had to be abandoned due to tight scrutiny from regulators and lengthy bureaucratic procedures. The company itself does not comment officially on the news about the purchase of Black Shark.

As for the status of the XR division, Tencent has already announced that it will streamline some of the teams as hardware plans have changed. However, the company announced on Thursday that it has no intention of completely dissolving the XR department. According to sources, Tencent advised most of the unit’s employees to look for other career options.

The creation of the XR division came against the background of a general rising interest in the metaverse in the world and forced Tencent to take unusual measures for the company. As you know, she specializes in software, including social services and games, and does little ironwork. The company had to compete with tech giants like Meta* and Microsoft not only in the area of ​​software, but also in the segment of headsets for virtual reality systems.

Last year was Tencent’s toughest year since the company was founded in 1998. Revenue was hit hard by regulators and the impact of China’s tough anti-COVID measures. Last December, founder Pony Ma showed rare pessimism when he slammed the company’s management for not working hard enough and said Tencent should focus on short video services for future growth.

* It is included in the list of public associations and religious organizations for which the court made a final decision to liquidate or ban activities on the grounds provided for in Federal Law No. 114-FZ of July 25. 2002 “On Countering Extremist Activities”.

About the author

Robbie Elmers

Robbie Elmers is a staff writer for Tech News Space, covering software, applications and services.

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