Tencent reportedly in talks with Meta to distribute Quest VR headsets in China

Tencent Holdings is in talks with Meta Platforms to distribute its Meta Quest line of virtual reality headsets in China, three people familiar with the matter said.

Talks between Tencent and Meta began last year and have continued for the past few months, according to one of the sources with direct knowledge of the matter, adding that the talks are still in their early stages and that details are yet to be agreed.

Tencent and Meta did not immediately respond to requests for comment on Tuesday. The people declined to be identified because the talks are not public.

Chinese news outlet 36Kr and The Wall Street Journal reported on the talks earlier.

Tencent, the world’s largest video game publisher, had ambitious plans to create both virtual reality software and hardware in an “extended reality” XR unit it launched in June last year. amid growing worldwide interest in the metaverse concept of a virtual world.

But Reuters reported last week that it had decided to stop developing its own XR hardware in part due to profitability concerns, and told most of the unit’s employees to find opportunities elsewhere.

Tencent said at the time that it was making adjustments to some business teams as hardware development plans had changed.

One of its main rivals in the virtual reality space in China is TikTok owner ByteDance, which owns headset maker Pico.

Tencent is best known for its software which includes a suite of games and social media apps. It sells the Nintendo Switch console in China through a partnership with the Japanese games company created four years ago.

© Thomson Reuters 2023