Meta strikes deal with Tencent to sell VR headset in China

Meta Platforms has struck a deal with Tencent Holdings to sell a new, low-cost virtual-reality (VR) headset in China, as it tries to return to a market where Facebook and Instagram remain blocked, the Wall Street Journal reported on Thursday.

The preliminary deal will make Tencent the exclusive seller of Meta's headsets in China, the Journal said, citing sources, adding that the Chinese video game maker will start selling the headset beginning late 2024.

The report did not mention the potential price of the headset.

Facebook, along with Twitter, were blocked by Beijing in mid-2009 following deadly riots in the western province of Xinjiang that authorities say were abetted by the social networking sites.

The VR deal gives Meta a chance to return to the Chinese market and compete with TikTok-owner Bytedance, which makes the VR headset Pico.

Meta's Quest is currently the bestseller in the nascent VR space. The company unveiled the next generation mixed reality headset Quest 3 earlier this year.

For China, Meta plans to use lenses in the headset that are cheaper than those in the Quest 3, according to WSJ. This version will also be sold in other markets.

The report added that Meta would take a bigger share of device sales, while Tencent would take more of the content and service revenue, with the cheaper headset also providing games and other apps published by the Chinese company.

Meta and Tencent did not immediately respond to Reuters' requests for comment.