Tencent begins to bet on the metaverse and related hardware.
Chinese technology conglomerate Tencent Holding Ltd. (0700:HK) announced the official establishment of its “extended reality”(XR) division internally on June 20,2022, three people familiar with the matter said.
As of press time, Tencent has yet to comment.
Li Shen, the global CTO of Tencent Games Global, is expected to lead the unit with the aim to build up the “extended reality” business for Tencent.
The term “extended reality” refers to “immersive” technologies such as virtual reality (VR) and augmented reality (AR), which are perceived to be the cornerstones of building a metaverse. The “extended reality” business focuses on laying out a full-link XR ecology, including XR devices on the hardware side, sensory interaction technology on the software side, and content and developer ecology on the content and industry side.
Tencent invested in Roblox, a representative company of the metaverse, in early 2020 and first proposed the concept of the all-real Internet in December of the same year.
In mid-January of 2022, Tencent spent CNY 2.6 billion (USD 0.39billion) to acquire Black Shark Corporation, which focuses on developing game phones and VR-related products. After that, Tencent confidentially launched its XR unit in February, sources said.
The formation of Tencent’s XR division also marks its entry into the hardware sector, since it has long been known for software such as games and social media applications.
According to sources, the XR unit is positioned to hire around 300 staff, while it is still of “great uncertainty” given Tencent has been cutting costs, slowing down hiring and adjusting in accordance with the overall financial performance.
The earliest player in the metaverse market was Meta(NASDAQ: META), whose virtual reality app Oculus App topped TikTok’s free charts in the U.S. on both the Apple and Google app stores. Its VR device Meta Quest2 sold more than 10 million units in 2021. At present, several companies such as Microsoft and Disney have announced the development of their own meta-universe. Both ByteDance and Apple are building headset devices based on XR technology.