Tencent eyes handset firm in metaverse push

Tencent (0700) plans to acquire gaming handset maker Black Shark for up to 2.7 billion yuan (HK$3.3 billion), a move that could help the tech behemoth further its ambitions for the metaverse.

Black Shark’s future business focus will shift from gaming phones to virtual reality devices , with Tencent providing the content and the Chinese firm providing the VR hardware portal after the transaction, sources said.

Shares of Tencent ended up 2.3 percent yesterday.

Last week, Tencent sold a stake worth US$3.01 billion (HK$23.48 billion) in Singapore-based gaming and e-commerce firm Sea, a move that could help it reallocate its funds to new tech projects such as metaverse, analysts say.

Alongside global giants like Facebook owner Meta Platforms, China’s largest tech firm is a contender in the race to develop the metaverse, conceived as a virtual environment where people can interact with the internet and others. In a recent earnings call, Tencent president Martin Lau called the metaverse “a real opportunity” though he cautioned that the concept may take longer than expected to turn into reality.

Developing specialized hardware is one of the key pillars to realizing the metaverse.

Meta, which bought VR headset maker Oculus in 2014, was one of the early movers and it is planning to release a high-end virtual reality headset this year called Project Cambria following the news that its Oculus virtual reality headset saw strong sales during the holiday season.

Meanwhile, one of Tencent’s top Chinese rivals, ByteDance, last year purchased Pico, a domestic VR headset maker.

Black Shark, a little-known startup that calls its users members of the “Rebellion,” sells its stylized phones as well as a plethora of accessories such as controllers in China, Europe and India. Last year, Tencent collaborated with Black Shark on a gaming phone that optimizes effects for the former’s flagship title Peacekeeper Elite.

Elsewhere, Tencent’s cloud service unit has signed a four-year memorandum with GOX, an Indonesian gaming streaming platform, and will provide technology services and content delivery networks for the latter.

The agreement came amid the e-sports market boom. The global market value is expected to reach US$2.89 billion in 2025, according to The Business Research Company, while a study conducted by the Indonesian Gaming Association indicated that the local gaming sector is growing at a pace of 37 percent annually.

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