Alibaba Rival Tencent Dumps Metaverse Ambitions As Macro Uncertainties Weigh

Tencent Holding Ltd TCEHY dumped its virtual reality hardware ambitions as the macro headwinds prompted it to cut costs and headcount at its metaverse unit.
Tencent eyed a ring-like hand-held game controller, but difficulties in achieving quick profitability, significant investment, regulatory scrutiny, and a lengthy review process prompted a shift away from that strategy, Reuters reports.
The Chinese gaming giant eyed virtual reality software and hardware at an "extended reality" XR unit it launched in June last year, for which it hired nearly 300 people.
According to an internal forecast, the XR project was not likely to become profitable until 2027. Tencent confirmed not disbanding the XR unit.
Tencent also aspired to snap gaming phone maker Black Shark to beef up its hardware push and add 1,000 people to the unit.
Tencent eyed rivaling Western peers like Meta Platforms Inc META and Microsoft Corp MSFT, which are building their metaverses and have their virtual reality hardware projects.
China's sweeping regulatory crackdown and COVID-19 headwinds battered Tencent's revenue.
Price Action: TCEHY shares closed higher by 0.02% at $48.45 on Thursday.
Photo by Chris Yunker via Flickr