Chinese company Tencent, the company behind PUBG Mobile and various other games and services, has pulled back on plans to enter the VR market. The report comes via Reuters, which cites three different sources “familiar with the matter”. The company is looking to trim costs at its metaverse unit including the halting projects unlikely to make money. Smart move.
Your Tencents worth
The company announced its intention last year to develop both virtual reality hardware and software. It went so far as to hire 300 people to execute its plans for an “extended reality” future. The development unit had made headway on a “ring-shaped” game controller (you know, the same design everyone else uses) but several factors have stepped in to halt the company’s progress.
You might have noticed that the metaverse isn’t as hot a topic as it was in 2022. That’s because its development is expensive and there’s no clear idea whether any investment will be adequately returned. One of the sources behind the Tencent news reckons that the company’s plans were unlikely to prove profitable until at least 2027. That’s a long time to wait and times are… tough everywhere.
Development time and cost were also cited as reasons why the Chinese multinational is putting the brakes on VR development. It’s also apparently halted its planned acquisition of Black Shark, the mobile gaming brand. Issues with regulatory approval stalled movement there but Tencent cutting back on metaverse development, in general, would also mean adding another 700 people to the team wouldn’t make sense.
Tencent has denied that it’s shutting down its extended reality (XR) division but it has confirmed that there will be “personnel adjustments”. It sounds like retrenchment with extra steps to us but perhaps the company’s got an actual plan going there.