Tencent & TikTok owner Bytedance backtracking on metaverse plans

Tencent, the major Chinese tech giant, is culling all plans for virtual reality hardware after cutting costs around their metaverse bet.

Chinese firm Tencent, one of the largest investors and publishers of video games in the world, is pulling out of its metaverse plans. It comes after the recent economic downturn, which has begun to hit the tech industry quite hard in recent weeks.

The plans would have included launching VR hardware to take advantage of the buzz surrounding the metaverse in 2022.

Much like other tech giants like Google and Microsoft, Tencent also plans to slash costs and staff at its metaverse studios.

Tencent slashes XR expectations

Reuters reports that sources told them the various XR projects that Tencent was running wouldn’t become profitable until 2027, as well as not enough games or apps to counter the competition.

However, despite the layoffs and canning of plans, Tencent doesn’t plan to shutter the XR unit entirely.

Tencent also currently has major investments in various companies in the gaming and tech industries. These include Epic Games and From Software, developers behind Dark Souls, and Elden Ring.

In 2011, they bought out Riot Games, which develops Valorant and League of Legends.

Layoffs hit TikTok owners Bytedance

Joining them in the metaverse layoffs is ByteDance, owners of TikTok and virtual reality hardware company Pico. The Pico 4 launched late last year to positive reviews, as an alternative to the Meta Quest 2.

It’s reported that around 200 staff were fired from the company. However, speaking with Yicai Global, a tech and finance outlet, ByteDance’s head of VR, said that the day-to-day won’t be affected.

Outside of China, the metaverse projects haven’t gone swimmingly either. Meta, owner of Facebook and formerly named VR hardware company Oculus has sunk $36 billion and plans to continue investing a further $19.2 billion. It’s estimated that Meta has managed to shave off around $700 billion dollars during this focus.

Meta will also be shutting down its Roblox competitor, Crayta, in March and even Microsoft disbanded its metaverse team in 2022.