Exclusive: Tencent is abandoning plans to venture into virtual reality hardware, as a sobering economic outlook prompts the Chinese tech giant to cut costs and headcount at its metaverse unit
"Under the company's new strategy as a whole, it no longer quite fit in," the source said.
Earlier in the year, Tencent had also planned to buy gaming phone maker Black Shark to beef up its hardware push and add 1,000 people to the unit. However, it eventually walked away from that deal due to Tencent's shift in strategy as well as mounting regulatory scrutiny and an expected lengthy review process, one source with direct knowledge of the matter said.
The sources said that Tencent had advised most of the unit's staff to seek other opportunities, confirming aTencent declined to comment on the Black Shark deal and whether Beijing's scrutiny had soured the deal. Regarding the status of XR unit, the company referred to a statement to that said it was making adjustments to some business teams as development plans for hardware had changed.The formation of the XR unit came amid swelling global interest in the metaverse concept of virtual worlds and had marked a rare foray into hardware for Tencent, which is mostly known for software that includes a suite of games and social media applications.
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