Credit：Visual China

Tencent has inked a preliminary deal with Meta to sell exclusively a lower-priced version of VR headset in China after a year of negotiation, the Wall Street Jounral reported, citing people familiar with the matter. Tecent was reported to start sales of the new variety of Quest 3 late 2024, and the upcoming version will be equipped with lenses that are cheaper than those in Quest 3, Meta’s latest offering on sale in September, and the more advanced graphic processing unit (GPU) that used in Quest 2, the previous version launched three years ago.

Under the deal, Meta will receive a larger share of hardware revenue, while Tencent will obtain a higher proportion of revenue from content and services, according to the report. The VR headset sold in China will reportedly offer games and apps published by Tencent.

The report didn’t reveal the possible price of the new Quest that Meta plans to set, but said the deal is fluid and details are subjected to change. It is unclear that whether Tencent will have toseek government approval for sales of Meta’s VR device and content on the platform as it does for the Nintendo Switch and conventional videogames.

Tencent and Meta didn’t comment on the report. If the report were accurate, that would be Meta’s return to the Chinese market, and Tencent’s low-profile comeback with new efforts in extended reality (XR), which covers virtual reality (VR), augmented reality (AR), mixed reality (MR) and other immersive technologies..

As the world’s best-selling VR headset, Oculus Quest has not been launched in mainland China so far. A number of reports about eight months ago revealed the internet giant dropped its in-house development on XR and mulled distribution of Oculus Quest 2 in China, but recent news suggested Tencent had overhauled its strategy on metaverse at least second times over the past months.

Some of teams at Tencent’s XR unit were said in February to have been disbanded, and more than 300 employees affected would have two months to apply for new roles inside the company or find new jobs outside.

Last month, Tencent was said to begin to rebuild the XRteam since August, prompted by the launch of Vision Pro, Apple’s first XR headset starting at $3,499 that is set to launch in early 2024. Tencent was also said to plan to act as a franchisee of the VR headset Oculus Quest in China, and sealed partnership with the device’s developer Meta Platforms Inc similar with that with Nintendo.

Tencent has completed discussing all the details of the Oculus Quest franchise except signing agreement, Chinese news media outlet Jiemian’s sources said last month. While Tencent will not to sell Quest 3, Meta’s latest offering on sale in September, the Quest 2 it was authorized to distribute would be an updated version powered by the new chipset, reported Jiemian, adding that the VR device is highly likely go on sale with new brand name in Chinese market. The new XR division of Tencent is not just made for distribution of Meta’s device as the company will continue development of its own project, the sources said, without elaborating details of such project.

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