One of China’s Biggest Tech Company Suspends Its Metaverse Project

Tencent follows in the footprints of Microsoft, which shut down a metaverse-related division last week. A less-than-optimistic economic outlook for the IT industry has led Tencent, one of China‘s largest technology corporations, to postpone efforts connected to the metaverse.

The business will discontinue creating virtual reality hardware and software for its “extended reality” segment, XR, which was introduced in June of last year, as reported in an article by the Reuters news agency this February 17th.

The Metaverse Suspension Causes Many Layoffs

Over 300 people have been employed by Tencent in this area of the business. If Tencent follows in the footsteps of Microsoft, there may be layoffs in connection with the closure of the operation, albeit that has not yet been reported.

Over 100 individuals who would have been employed to work on the Bill Gates company’s metaverse were let go last February 10th. Microsoft‘s metaverse strategy came to an end when they decided to give priority to short-term projects that would bring in money more quickly.

One of Chinas Biggest Tech Company Suspends Its Metaverse Project

Cost-cutting initiatives appear to have played a role in Tencent‘s decision. According to a person with knowledge of the situation, the company’s internal prediction was that the XR project would not result in a profit until 2027. A second source claimed that the device lacked both potential games and other non-gaming uses for testing VR technology.

Tencent Seems to Back Down from Many Fields

Tencent also appears to be having issues outside of the metaverse. As Reuters recalls, the Chinese juggernaut also had to scrap its initial plans to acquire Black Shark, a maker of game-centric mobile phones.

Tencent anticipated that by making this acquisition, it would be able to enhance its supply chain, gain additional expertise, and support its hardware initiatives by hiring more than a thousand workers. Nevertheless, Tencent’s strategic revisions prevented the company’s acquisition and personnel recruiting from happening.

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Armaan Khatri

I'm Armaan Khatri, a financial writer, editor, and market analyst. A former VP and market risk advisor worken in India at Citizens Financial Group. Have more than 15 years of financial services experience that also includes personal finance, personal banking, IRAs, and retirement services.

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