Meta Platforms has recently struck a preliminary deal with Tencent Holdings to introduce a new affordable virtual reality (VR) headset into the Chinese market. This move marks Meta’s return to a market where its major platforms, Facebook and Instagram, have long been inaccessible due to restrictions.
Meta Exclusive Sales Arrangement with Tencent in China
Under this agreement, Tencent will exclusively sell the VR headset in China, with sales expected to commence in late 2024. This strategic partnership allows Meta to re-enter China after a 14-year hiatus, positioning itself to rival TikTok’s parent company, Bytedance, which produces the Pico VR headset.
The specific pricing details for the new headset have not been disclosed. Meta’s current offerings in the United States include the Quest 2 headset starting at $300 and the higher-end Quest Pro priced at $1,000. Earlier this year, Meta unveiled the Quest 3, with a starting price of $500.
Since Facebook and Twitter were blocked in China in 2009, Meta faces the challenge of penetrating a market dominated by local tech giants. To address this, Meta plans to equip the Chinese version of the headset with cost-effective lenses compared to those in the Quest 3. This modified version will also be available in other global markets.
The agreement outlines a revenue-sharing model where Meta gains a larger share from device sales while Tencent receives more revenue from content and services. Tencent will provide games and apps for the headset, focusing on leveraging its strengths in the Chinese market.
Strategic Countermeasures and Competing with Apple Vision Pro
This initiative by Meta aligns with its efforts to counter the competitive threat posed by Apple forthcoming Vision Pro mixed-reality headset, priced significantly higher than Meta’s top-tier offering. Despite this, Meta’s Quest series remains a bestseller in the evolving VR landscape, according to research firm IDC.
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