Meta strikes a deal with Tencent to launch a low-cost VR headset in China

In an effort to re-enter the Chinese market, Meta Platforms has reportedly reached a preliminary deal with Tencent Holdings to introduce a new, budget-friendly virtual reality (VR) headset in China, where Facebook and Instagram remain blocked. This development was disclosed on Thursday, 9 November, 2023.

As part of the agreement, Tencent will become the exclusive distributor of Meta's VR headsets in China, with plans to commence sales by late 2024. No details have been provided regarding the pricing of the VR headset.

Facebook, along with Twitter, faced many restrictions imposed by Beijing in mid-2009, following violent riots in Xinjiang. The Chinese government attributed the unrest to activities facilitated by these social networking sites.

The VR collaboration presents Meta with an opportunity to re-establish its presence in the Chinese market and compete with Bytedance, the owner of TikTok, which already produces the Pico VR headset. Currently, Meta's Quest is a leading product in the emerging VR space, and the company introduced the next-generation mixed reality headset, Quest 3, earlier this year.

For the Chinese market, Meta plans to incorporate cost-effective lenses into the headset compared to those in Quest 3. This modified version is anticipated to be available in other global markets as well.

Meta is expected to secure a larger share of device sales, while Tencent will receive a greater portion of the revenue generated from content and services. The more affordable headset will also offer games and other applications published by Tencent.

The VR deal signifies Meta's strategic move to navigate China's regulatory landscape and engage in competition with domestic tech companies, marking a potential return to a market with immense growth opportunities.