A sobering economic outlook prompts the Chinese tech giant to cut costs and headcount at its metaverse unit
Hong Kong — Tencent Holdings 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, three sources familiar with the matter said.
One of the sources said the XR project was not expected to become profitable until 2027, according to an internal forecast. The second source said the unit also had a lack of promising games and non-gaming applications.“Under the company’s new strategy as a whole, it no longer quite fit in,” the first source said.
The sources said that Tencent had advised most of the unit’s staff to seek other opportunities, confirming a Thursday report from Chinese tech news outlet 36Kr. One of the sources said that Tencent had dabbled in virtual reality about seven years ago for a short while, and its interest in the area had been revived in 2021 after learning of new breakthroughs in pancake lenses and more powerful displays. Strong sales of Meta’s Quest headset was also a driver, the person added.
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