Tencent Holdings Ltd. is on the verge of finalizing a partnership with Meta Platforms Inc., which will enable the introduction of its mixed reality headset in China.
Under the deal, Tencent would make a version of the headset using Meta’s hardware and software data, a person familiar with the discussions said, asking not to be identified because the information is not public. The headset is proposed to be branded and marketed under the Tencent name, the person said, but cautioned that negotiations have not been completed, the plan could change and no decision on the name or branding has been made.
Meta did not respond to a request for comment. Tencent did not immediately have a statement. The Wall Street Journal previously reported that Meta plans to sell virtual reality headsets in China with Tencent.
The partnership with Tencent could mark a kind of comeback for Meta in China. Meta’s Facebook and Instagram were both blocked from operating in China years ago, according to the US International Trade Commission. The partnership would also bring together two major rivals in the metaverse space. Last year, Tencent was said to be mulling a deal to buy Chinese gaming phone maker Black Shark, potentially helping the tech giant further its metaverse ambitions.
According to a person familiar with the company’s plans, Meta is accordingly looking for relationships with contract manufacturers or original equipment manufacturers, i.e. OEM manufacturers, around the world.
In September, Meta debuted a new generation of over-the-head device called the Quest 3. It raised the price of its mass-market headphones to $500.
Meta’s relations with China have proven to be fragile at times. In August, Meta said it had intercepted a Chinese influence campaign that it described as “the world’s largest known cross-platform covert influence operation.” The social media company removed more than 7,700 Facebook accounts and 954 pages linked to the campaign that spread positive comments about China as well as criticism of the United States, Western foreign policy and the Chinese government.
Meta said its investigation found links between the campaign and individuals linked to Chinese law enforcement.