Meta Platforms (NASDAQ:META) will be making its return to China after striking a deal with Tencent Holdings (OTC:TCEHY) to sell a low-priced VR headset, the Wall Street Journal reported. It will be the Facebook owner's first move back to China in 14 years after its social media platform was shut out of the country.
It is expected that Tencent will start selling the VR headsets in late 2024, after about a year of negotiations between the two sides.
It remains uncertain whether Tencent must obtain official Chinese government approval to introduce Meta's device and provide VR content on their platform, similar to the requirements in place for the Nintendo Switch (NYSE:SWCH) and traditional video games. This uncertainty arises because there are currently no established regulations for VR in the country.
Meta intends to employ cost-effective lenses in the upcoming headset, which will also be available in various other markets. The new model will feature a more advanced graphics processing unit compared to the Quest 2, released over three years ago.
Under the agreement, Meta would take a larger share of the device sales, while Tencent would claim a larger portion of content and service revenue, including software subscriptions and game sales, according to WSJ sources. The headset will offer games and apps published by Tencent.