Meta has announced that it has signed a deal with Chinese Big Tech company, Tencent, to sell a new low-cost virtual reality headset in China.
The announcement marks Meta‘s push into the market where its popular social media platforms, Facebook and Instagram, remain blocked.
The deal makes Tencent the exclusive seller of Meta’s headsets in China, according to the Wall Street Journal. The company will begin to sell the headset in late 2024, the publication said.
The deal means that Pico, TikTok-owner ByteDance’s VR headset startup, will face fresh competition from Meta’s globally popular headsets.
It was recently reported that Pico is undergoing substantial layoffs and restructuring to focus on hardware after laying off around 200 employees in February.
ByteDance acquired Pico in mid-2021, when the company was valued at $1bn, to rival Meta’s Quest VR headsets.
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Pico transitioned from primarily focusing on business-oriented VR solutions to launching its consumer headset, the Pico 4, in European markets just months after the acquisition.
The Meta Quest range is currently the best seller globally in the VR industry.
According to the report by Wall Street Journal, Meta is planning to release a cheaper headset than its Quest 3 in China, in order to appeal to the mass market.
The Quest 3 was released by Meta earlier this year.
Unlike its previous VR headsets, the Quest 3 focuses on mixed reality. Cameras on the exterior of the headset allow for real-life images to be mixed with virtual spaces.
The headset released in June with a starting price of $499, 40% higher than the starting price of its Quest 2.
The price of Meta’s VR headset in China has not yet been disclosed.
The announcement comes as the global value of VR and augmented reality (AR) deals saw a decline in 2022, according to GlobalData’s Deal Database.
In 2022, the total value of VR and AR deals globally totalled just over $2bn, a significant drop from its peak in 2021, which saw deals total $3.5m.
In 2023 so far, VR and AR deals have totalled $834m, substantially lower than the year prior.