Meta Inks Agreement with Tencent to Launch VR Headset in the Chinese Market

Meta Platforms has reportedly entered into a preliminary deal with Tencent Holdings to introduce a new, budget-friendly virtual-reality (VR) headset in China. This strategic move is aimed at re-entering a market where Facebook and Instagram remain inaccessible. Under the terms of the agreement, Tencent will serve as the exclusive distributor of Meta's headsets in China, with sales expected to commence in late 2024, according to sources cited by the Wall Street Journal.

While specific details about the headset's price were not disclosed in the report, the deal presents an opportunity for Meta to re-establish its presence in China, where Facebook and Twitter have been blocked since 2009. The Chinese government took this action following riots in Xinjiang, attributing the unrest to content on these social networking sites.

The VR collaboration positions Meta to compete with Bytedance, the owner of TikTok, which currently produces the VR headset Pico. Meta's Quest, currently a bestseller in the emerging VR market, was unveiled earlier this year as the next-generation mixed reality headset, known as Quest 3.

In adapting to the Chinese market, Meta plans to incorporate cost-effective lenses in the headset compared to those used in the Quest 3. This modified version is expected to be available in other markets as well.

The report indicates that Meta will have a larger share of device sales, while Tencent will have a greater stake in content and service revenue. The more affordable headset will also provide access to games and other applications published by the Chinese company.