Tencent and Meta plan to launch Quest 2 in China - Report
Meta Quest 2 could be launched in China with the help of Tencent. Such a partnership could have a lasting impact on the VR industry.
Last week, Reuters reported that Tencent had abandoned plans to develop its own VR headset and was planning layoffs in its own XR division.
Now, a new report from Chinese website 36Kr claims that Tencent will instead partner with Meta to launch Meta Quest 2 in China.
According to 36Kr, only a few employees will remain in Tencent's XR division to help with the launch of the Meta headset. The two companies are said to be working together to localize and adapt the software offering for the Chinese market.
Meta took the China detour already with Oculus Go
It wouldn't be the first such collaboration for either side: Tencent partnered with Nintendo in 2019 to distribute the Nintendo Switch in China, while Meta launched Oculus Go there in 2018 (under the name "Mi VR Standalone") thanks to Chinese electronics manufacturer Xiaomi.
Preparations for the launch have been underway for four months, according to the report, and are being led by the same Tencent executive who oversaw the partnership with Nintendo. However, it is still unclear when Meta Quest 2 will be released in China, the report said. Tencent has not commented on the rumors.
The report offers a glimpse into Tencent's years of futile efforts to develop market-ready VR hardware. The company, whose strengths lie in software, sees the partnership with Meta as a possible way to enter the VR market without having to develop its own devices.
In the past, Tencent unsuccessfully tried to acquire Chinese VR headset maker Pico and was outbid by Bytedance. TikTok's parent company reportedly paid 9 billion yuan ($1.3 billion) for the company, although it was only worth 2.5 billion yuan ($360 million) at the time.
Tencent had also tried to build a foundation for hardware development by acquiring two other companies, but to no avail. The creation of a separate XR division with 300 employees also led to a dead end: most of the skilled workers were laid off last week, according to 36Kr (see above).
New competition for Pico in China
One card Tencent could play when it comes to the XR market is the Chinese gaming giant's software portfolio. According to the report, the group could be planning its own VR content - which could also find its way to the West.
This raises the question of what power shifts could result from a partnership between Tencent and Meta. Bytedance dominates the Chinese VR market with its Pico headsets and could now face an unexpected new competitor in its home country.
Bytedance itself has yet to enter Meta's home market, the US, and only sells the Pico 4 in Europe and a few Asian countries.
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