Internet giant Tencent reportedly abandoned plans to develop and launch VR hardware as it grapples with worsening economic conditions which caused it to rethink investment in its metaverse play.
Reuters reported Tencent was cutting costs and staff within its metaverse play, meaning it was no longer planning to pursue the launch of a VR device.
The news agency reported in 2022 Tencent had created a business line exploring extended reality (XR) technologies, which would look to develop hardware and software.
It had big plans for the unit, with the company’s gaming chief Steven Ma stating it was actively experimenting in software, content, systems and hardware to create VR experiences, targeting a workforce of more than 300 staff.
However, sources now claim the company has rethought the plans due to the large investment required to produce a competitive product, along with difficulties in achieving quick profitability.
Internal documents reportedly show Tencent thought its XR project would not become profitable until 2027.
It told Reuters it was not disbanding the unit entirely.
Tencent’s pull back from XR is the latest sign the company is reassessing a deeper push into hardware.
Earlier this year it also dropped plans to buy gaming phone maker Black Shark.