In a bid to re-enter the Chinese market, Meta Platforms has reportedly entered a deal with Chinese technology company, Tencent Holdings, to introduce a new, affordable virtual reality (VR) headset in China.
This marks the Facebook and Instagram parent company’s return to a market where it had taken a 14-year hiatus, a repor by the Wall Street Journal said.
The Wall Street Journal also cited sources saying Tencent will be the exclusive seller of Meta’s new VR headset in China, with sales expected to commence in late 2024. The deal presents Meta with an opportunity to compete with TikTok owner, Bytedance, which already produces the VR headset Pico.
While the report failed to disclose the potential price of the new headset, Meta currently sells the Quest 2 headset in the US at a starting price of $300, and the Quest Pro at $1,000. Earlier this year, Meta unveiled the Quest 3, starting at $500.
In the midst of strained relations between China and the United States, Meta’s move aligns with the broader geopolitical landscape. The Biden administration has curbed export on certain high-end technology, including some chips, heightening the competitive dynamics in the tech industry.
Meta’s strategy for the Chinese market involves utilising lenses in the headset that are more cost-effective than those in the Quest 3, according to the Journal’s report. This version of the headset will also be available in other markets.
The terms of the deal will see Meta taking the lion’s share of device sales, while Tencent benefits more from content and service revenue. The lower-cost headset will also provide games and apps published by Tencent, enhancing the overall user experience.
Meta’s moves to re-enter the Chinese market seems to be strategically aimed at mitigating the threat posed by Apple’s recently announced, mixed-reality headset, the Vision Pro, which launches early next year.
Priced over three times as high as Meta’s most expensive Quest headset, Apple’s offering targets enthusiasts and could pose a significant challenge in the competitive VR space. Currently though, the Quest is the bestseller in the nascent VR market, according to research firm IDC.