Tencent plans to scrap VR hardware as Metaverse bet falters

Tencent plans to scrap VR hardware as Metaverse bet falters

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Confirming Thursday’s report by Chinese tech news outlet 36Kr, sources said Tencent had advised most of the unit’s employees to look for other opportunities.

Tencent declined to comment on the Black Shark deal and whether Beijing’s investigation soured the deal. Regarding the XR unit’s status, the company cited a statement on Thursday that said it was making adjustments to some business teams as development plans for the hardware changed.

The company also said on Thursday that it is not shutting down the XR unit.

The XR unit’s formation comes amid growing global interest in the metaverse concept of virtual worlds and marks a rare foray into hardware for Tencent, which is known mostly for software that includes games and a suite of social media applications.

This ushered in a race against Western peers such as Meta Platforms and Microsoft, who are building their own metaverse and have their own virtual reality hardware projects.

Last year marked one of the toughest years for Tencent since its founding in 1998, with revenue battered by a regulatory crackdown and headwinds from measures to contain the spread of COVID-19.

Underscoring such tensions, its founder Pony Ma made a rare display of frustration at a year-end meeting in December, when she lambasted senior managers for not working hard enough and said the company needed to plan for the future. Growth needs to focus on short videos.

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