Meta (formerly known as Facebook) is slowly making its way back into the Chinese tech scene after a long 14-year ban. With an eye on the growing virtual reality market, the social media company is teaming up with Chinese tech giant Tencent to launch a new VR headset in China.
Any large-scale VR ambitions must take into account the Chinese market, which is why Meta has been trying to enter the Chinese market after an absence of 14 years. Meta has been eager to recapture a large potential audience it lost when China banned foreign social media in 2009 and began cracking down on popular Western platforms such as YouTube, Twitter, and Facebook.
While China’s own TikTok has become a rising social media star in nearly all parts of the country, Facebook has failed to make a comeback there, despite CEO Mark Zuckerberg’s years of efforts to curry favor with Chinese officials.
Tencent: The Key to Comeback
As a global market leader with a huge potential audience, China is critical to the continued success of Meta’s VR strategy. Additionally, as the VR market is still looking for a breakthrough, competitors are still vying for the top spot.
Additionally, Tencent’s interest in virtual reality and its access to the market make them a potentially excellent partner for Meta. However, after a difficult 2022, the Chinese giant reduced its VR spending, and 2023 is the year of artificial intelligence, not VR.
Zuckerberg was finally able to re-enter the Chinese market thanks to Tencent, which has apparently reorganized its VR team and agreed to work with Meta to release a headset based on Meta technology. While the agreement is still in its preliminary stages and could change at any time, Tencent will be the exclusive seller of Meta helmets in the region. People can expect sales to begin in late 2024.
Nitty-Gritty of the Transaction
In terms of transaction profit distribution, Tencent is expected to bear the majority of software subscription and game sales revenue, while Meta is expected to receive the largest portion of hardware sales revenue.
The most noteworthy aspect of the plan is that while Meta only recently brought the more powerful and costlier Quest 3 to market, Tencent has agreed to release a cheaper, lower-quality version of the device that should feature specs. Between Quest 2 and 3.
In Meta’s ongoing “quest” to finally convince the world to take AR and VR seriously, the fast-growing Chinese market’s reaction to an easier-to-use, downgraded headset — reversing Meta’s improved specs and adopting the pricey Quest 3 plan — will be crucial. will be crucial. Still, both parties are pulling out all the stops for the project, especially with the support of regional giants like Tencent.