Tech giant Tencent enters VR business – report

Tech giant Tencent enters VR business – report

Tencent reportedly wants to enter the Metaverse race and is planning a first major acquisition for this purpose.

Tencent is in takeover talks with the Chinese smartphone manufacturer Black Shark, reports the web portal 36Kr with reference to well-informed sources. A purchase price of around 400 million US dollars is under discussion. If the deal succeeds, the company will switch entirely to the production of VR glasses, while Tencent will supply the VR content.

Tencent owns a number of Western game studios such as Riot Games (Valorant, League of Legends) and Sumo Digital. The company also holds 48 percent of Epic Games’ stock.

China’s tech giants eye Metaverse.

Tencent is considered China’s largest Internet company, turning over $75 billion in 2020. An investment in virtual reality by Tencent would carry a lot of weight.

Tencent President Martin Lau called the Metaverse a “real opportunity” during a recent conference call, while CEO Ma Huateng said his company had many of the necessary technologies to develop and advance the Metaverse.

It wasn’t that long ago that another Chinese company made a similar purchase: in August 2021, TikTok operator Bytedance acquired Chinese VR glasses maker Pico. Tencent was also reportedly interested in Pico and had been negotiating with the company since March 2021. The withdrawal came for unknown reasons after Bytedance also expressed interest, the report said.

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Why Black Shark?

The question is why Tencent would want to buy Black Shark in particular. Founded in 2017, the company specializes in gaming smartphones and smartphone accessories, not virtual reality hardware.

The question becomes clear upon closer inspection: Tencent is likely aiming to develop a standalone VR goggle similar to Meta Quest 2. As we know, this runs on Android and uses a VR-optimized Qualcomm-branded smartphone chip. Black Shark has a lot of experience in areas such as mobile gaming and the associated software and hardware optimization. The company has also worked closely with Qualcomm and Tencent.

According to the report, work on dedicated VR hardware has already begun. The company is currently looking for professionals who could help develop VR goggles.

Sources: 36Kr, Bloomberg