Meta, Facebook’s parent company, is expanding its market to China with its Virtual Reality headset. Facebook has not been in China since 2009, when the Communist Party removed it from the internet.
The deal is a partnership with Tencent, a major Chinese gaming company. The deal itself will mostly benefit Tencent, though Meta is still expected to make a healthy profit. Business Insider reports:
The Facebook owner has cut a deal with Chinese conglomerate Tencent to start selling a new and cheaper version of its virtual reality headset in late 2024, The Wall Street Journal reported.
Meta plans to use cheaper lenses than the ones it uses in its VR headset Quest 3, and it will have the lion’s share of sales. Tencent, one of the world’s biggest video game vendors, will have the majority split from content and service revenue, the report said.
Meta’s VR has not had great success, posting consistent losses. This opportunity to provide a cheaper product more suitable for non-American audiences could rival Apple’s upcoming VR headset. Endgadget continues:
The deal would open up a huge market for Meta’s VR division, which has been hemorrhaging money and could certainly use the boost. However, it’s not clear whether Tencent would require government approval to sell the devices. Gaming is a popular VR activity, but China’s strict rules have already had a significant impact on Tencent, the world’s largest video game company.
China may not be a panacea for Meta’s weak VR division, either. TikTok owner ByteDance is China’s virtual reality leader with its Pico headset, but is struggling with sales in China just as Meta is elsewhere. And Tencent itself was reportedly on the brink of disbanding its own VR division, but supposedly built it back up once the Meta deal seemed inevitable. Headset sales across the globe fell nearly 45 percent this quarter compared to the same period last year.
Virtual Reality is still a very recent technology, and has to compete for attention from the focus on Artificial Intelligence. The technology has not yet been shown to improve productivity, a key to make it adopted in corporate settings.
READ NEXT: TikTok Innovation Now Spreading
