Tencent Holdings is in talks with Meta Platforms about distributing its Meta Quest line of virtual reality headsets in China, according to three people familiar with the matter.
The conversations between Tencent And Meta Negotiations started last year and have continued in recent months, according to one of the sources with direct knowledge of the matter, adding that talks are still at an early stage and details have yet to be agreed.
Tencent and Meta did not immediately respond to requests for comment on Tuesday. The people did not want to be named because the talks are not public.
Chinese media 36Kr and The Wall Street Journal previously reported on the discussions.
Tencent, the largest in the world video game publisher, had ambitious plans to build both virtual reality Software and hardware in an “extended reality” XR unit, launched last June in response to growing global interest in the metaverse concept of a virtual world.
But Reuters reported last week that the company had decided to halt development of its own XR hardware, in part due to profitability issues, and urged most of the unit’s employees to look elsewhere.
Tencent said at the time that it was making adjustments to some business teams as hardware development plans changed
One of its main competitors in the Chinese virtual reality space is tick tock owner ByteDancewhich owns the headset manufacturer Pico.
Tencent is best known for software, which includes a range of games and social media applications. It sells them Nintendo Switch console in China through a partnership established four years ago with the Japanese gaming company.
© Thomson Reuters 2023
