In the backdrop of declining demand for VR hardware, Meta, under the leadership of Mark Zuckerberg, is reportedly set to introduce a more affordable virtual reality (VR) headset in China. According to The Wall Street Journal, Chinese video game company Tencent has agreed to commence the sale of this new Meta headset, expected to be priced lower than the Quest 3, starting late next year.
The reported agreement with Tencent opens up a significant new market for the U.S. technology giant, Meta, as it seeks to stimulate subdued global demand for its specialized VR equipment.
Commencing from late 2024, Tencent will begin selling the headset, sealing the deal after about a year of negotiations. Despite having left China 14 years ago, Meta’s return is facilitated through a preliminary arrangement with Tencent.
This development coincides with a downturn in the demand for VR hardware. Meta reported a revenue of $34 billion in the third quarter, reflecting a 23% increase from the same quarter in the previous year. However, the company continues to experience financial losses in its Reality Labs division, and Meta anticipates a substantial year-over-year increase in operating losses.
The AR-VR division at Meta has incurred losses nearing $25 billion since the beginning of last year. Mark Zuckerberg expressed satisfaction with the quarter’s performance, highlighting achievements in AI and mixed reality, including the launch of Quest 3, Ray-Ban Meta smart glasses, and the establishment of an AI studio.
