It is reported that Tencent has decided to abandon its XR product plans and is now betting only on virtual reality and the metaverse.
Virtual reality, augmented reality and mixed reality are on everyone’s lips today. It has been a separate industry for some time and the tech giants are already well positioned. Some have proven themselves well, while others have a more delicate situation. Between low sales and a difficult vision for the future, sometimes you need to make a decision to leave. This is what Chinese giant Tencent would do recently.
Tencent decided to abandon its XR plans
Indeed, Tencent would rather close its mixed reality product projects. The company has reportedly briefed its XR team, which opened last June, to move into VR accessories and software, in direct response to the growing popularity of the metaverse, and “look for other opportunities.”
According to Reuters, the main reasons for this change in strategy are “difficulties in achieving quick profitability”, the amount of investment required to offer a competitive VR headset, and the lack of truly compelling games and other applications. While the company developed the “video game ring controller”concept, it didn’t expect its XR division to turn a profit until 2027. However, despite this change in strategy, Tencent does not intend to disband the team. “These projects no longer have a place in this new global strategy for the company,” the source said.
And I would now bet only on VR and the metaverse
Additionally, Tencent would also scrap its plan to acquire gaming smartphone maker Black Shark, which would boost its payroll by just over 1,000 employees (after hiring 300 last year). This agreement appears to have attracted the attention of the Chinese government.
The sources also claimed that Tencent “tried”VR seven years ago when public interest in the technology was at its peak. In 2021, VR has become very popular again thanks to the success of Meta Quest and technological advances, especially lenses and pancake screens. However, 2022 has been a challenging year for Tencent, with regulators following its activities and having to deal with the impact of Covid-19-related preventive measures.