Tencent Forms XR Unit In Metaverse Drive

Chinese tech giant Tencent has officially announced the formation of an “extended reality” (XR) division, as it seeks to build both hardware and software aimed at developing the “metaverse“, following months of rumours that it was planning to enter the space.

Speaking at a Tencent mobile gaming event the company’s gaming chief Steven Ma said the firm sees multiple opportunities in the XR space over the next four to five years and had set up a business unit combining hardware and software, Reuters reported.

“We hope to seize the opportunity in the next four to five years to actively experiment in software, content, systems, SDK tools, hardware and other links to create virtual reality experiences which can be industry benchmarks,” Ma said, according to a transcript of his remarks.

XR hardware

He said Tencent believes most companies entering the area will choose to combine both hardware and software, similar to Apple with its upcoming VR/AR headset or Facebook parent Meta Platforms with its Oculus VR devices, and that Tencent wasclowing the same path.

A number of companies are moving to build virtual worlds or metaverse hardware in response to Meta’s plans to aggressively push into the metaverse, comprising immersive technologies such as VR and XR, which some see as the next generation of the internet.

Rumours of Tencent’s new division date back at least to February, when Chinese news source Sina Technology reported the company had begun internal recruitment for the unit, citing an internal document.

Reuters reported last week that Tencent had announced the unit internally to staff and that it would be led by Tencent Games Global chief technology officer Li Shen and would be part of Tencent’s Interactive Entertainment business group.

‘Passion project’

The unit is reportedly to have more than 300 staff, a sign of Tencent’s significant investment in the metaverse, given that it is making significant cutbacks in other areas in response to a wide-ranging regulatory crackdown on Chinese tech companies.

One Reuters source said the XR unit was a passion project for Tencent founder and chief executive Pony Ma, who first began speaking of what he calls the “all-real internet” in late 2020.

Ivan Su, equity analyst at Morningstar, said earlier this year that Tencent was best positioned to take a first-mover advantage in the metaverse due to its leading position in the Chinese games industry, has a leading role in social media and is the second-largest cloud provider in China.

The main metaverse rivals for Tencent, China’s most valuable company, are internet giant NetEase and TikTok parent ByteDance, which bought XR start-up Pico last August.