Tencent forms ‘extended reality’ unit as metaverse race gathers steam

Tencent Holdings, China’s most valuable company, on Monday announced to its employees the official formation of an “extended reality” (XR) unit, three sources familiar with the matter said, formally betting on the concept of worlds. virtual.

The unit is tasked with building the extended reality business for the company, including software and hardware, the sources said, adding that it will be led by Tencent Games Global chief technology officer Li Shen and will be part of the Interactive Entertainment business group. from the company.

Two of the sources said the unit will have more than 300 employees, despite Tencent cutting costs and slowing hiring. However, they also warned that the company will adjust the unit’s headcount based on its performance.

The new business area was formed earlier this year but has remained shrouded in secrecy, the three sources said. Tencent declined to comment.

Extended reality (XR) is a term that refers to immersive technologies such as virtual reality and augmented reality, which are seen as the building blocks of the metaverse.

Tencent’s XR unit will mark a rare foray into hardware for the company, which is primarily active in software, the video game and social media application markets.

One of the sources said the unit is seen internally as a passion project by Tencent founder and chief executive Pony Ma, who first highlighted the importance of the metaverse, or what he called the “totally real internet”, at the end of 2020

The introduction of the new team contrasts with the cuts taking place elsewhere at Tencent, which has been implementing cost control measures and scaling back non-core business.

Tencent has been secretive so far about its plans for the metaverse. Last November, company executives told analysts that the company had many “technology and capability building blocks” to address the metaverse opportunity, but did not elaborate.