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Tencent Holdings Ltd (OTC: TCEHY) proposed becoming Meta Platforms Inc’s (NASDAQ: META) exclusive seller of the latter’s popular virtual-reality Quest 2 headsets in China.
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Tencent also sought to publish Chinese versions of existing videogames for the device, the Wall Street Journal reports.
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The companies must address user data handling, appropriateness of global macroeconomic conditions, and compliance with regulatory norms for both countries, including China’s videogame regulations.
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China’s consumers can buy Meta’s headsets from parallel importers on e-commerce platforms like Alibaba Group Holding Ltd’s (NYSE: BABA) Taobao and JD.com Inc (NASDAQ: JD).
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Users can set up headsets and download apps with a virtual private network to bypass China’s internet firewall.
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The deal could mark a significant step for Meta to connect with Chinese consumers again after Beijing blocked Facebook in China in 2009.
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Meta runs an office in Shanghai and is actively hiring engineers for its VR business.
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Meta is the dominant player globally in VR headsets, while its smaller rival, Pico, owned by ByteDance Ltd, has tried to catch on.
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Meta’s revenue from its Reality Labs division, which houses its VR business, declined 17% in the fourth quarter year-on-year due to lower sales of the Quest 2 headset. The partnership could significantly boost Meta by providing it access to the biggest videogame market.
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For Tencent, the deal could help it create new sources of revenue beyond the slowing video game and advertising businesses.
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Price Action: META shares traded higher by 0.21% at $173.25 on the last check Tuesday.
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This article Tencent Eyes Deal To Sell Meta’s Quest 2 VR Headset in China, The Biggest Videogaming Market originally appeared on Benzinga.com
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