According to a report from The Wall Street Journal via Reuters, Meta Platforms (META) has entered a deal with Tencent Holdings (TCEHY) to sell a new, low-cost virtual reality (VR) headset in China. For Meta, this is a return to a marketplace where Facebook and Instagram are blocked.
The preliminary agreement will enlist Tencent as the sole retailer of the headset in China and the video game developer will initiate its sale in late 2024, the WSJ said, citing sources.
This deal also grants Meta an opportunity to return to China after 14 years and compete for market share with TikTok-owner Bytedance, which produces the VR headset Pico.
The report did not mention the potential price of the new headset.
Meta retails the Quest 2 headset in the United States at a base price of $300 and Quest Pro headsets at $1,000. Earlier this year it unveiled Quest 3, starting at $500.
After deadly riots occurred in the western province of Xinjiang, mid 2009 Facebook and Twitter were blocked by Beijing. Authorities said the riots were encouraged by the social media sites.
The collaboration comes in the midst of strained relations between China and the United States after the Biden administration forced export curbs on certain high-end technology, particularly some chips, in attempts to halt its use by the Chinese military.
For the China sold headsets, Meta intends to utilize lenses in the headset that are cheaper than those in the Quest 3, according to the WSJ report. This cost-effective version will also be sold in other markets as well.
Meta would receive a larger portion of device sales, while Tencent would acquire more of the content and service revenue, with the cheaper headset offering games and other apps published by the Chinese company.
The China endeavor comes as Meta prepares for the entrance of Apple's new mixed-reality headset Vision Pro, which would go on sale early next year.
Apple’s Vision Pro headset is priced more than three times Meta's most expensive Quest headset and is targeted at aficionados. Currently, Quest is the bestseller in the burgeoning VR space, according to research firm IDC.
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