Alibaba Rival Tencent Dumps Metaverse Ambitions As Macro Uncertainties Weigh

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  • Tencent Holding Ltd TCEHY dumped its virtual reality hardware ambitions as the macro headwinds prompted it to cut costs and headcount at its metaverse unit.
  • Tencent eyed a ring-like hand-held game controller, but difficulties in achieving quick profitability, significant investment, regulatory scrutiny, and a lengthy review process prompted a shift away from that strategy, Reuters reports.
  • The Chinese gaming giant eyed virtual reality software and hardware at an "extended reality" XR unit it launched in June last year, for which it hired nearly 300 people.
  • According to an internal forecast, the XR project was not likely to become profitable until 2027. Tencent confirmed not disbanding the XR unit.
  • Tencent also aspired to snap gaming phone maker Black Shark to beef up its hardware push and add 1,000 people to the unit.
  • Tencent eyed rivaling Western peers like Meta Platforms Inc META and Microsoft Corp MSFT, which are building their metaverses and have their virtual reality hardware projects.
  • China's sweeping regulatory crackdown and COVID-19 headwinds battered Tencent's revenue.
  • Price Action: TCEHY shares closed higher by 0.02% at $48.45 on Thursday.
  • Photo by Chris Yunker via Flickr
Posted In: NewsTechMediaBriefs
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