Tencent joins metaverse race with ‘Extended Reality’ division

Chinese internet giant Tencent has created an “extended reality” division that will develop devices and services for metaverseAccording to Reuters. The move is Big Tech’s latest attempt to share a claim to the metaverse, as Meta, Microsoft, Apple and TikTok-developer ByteDance are all placing bets that virtual and extended reality is the future of user interfaces.

It comes as a number of organizations, including Microsoft, Meta and Unity, are launching a new metaverse standards forum to improve interoperability.

Tencent is unlikely.  (Photo: alvarez/iStock)
Analysts expect most of the major tech giants to announce their Metaverse strategies this year. (Photo by Alvarez/iStock)

Informed sources told Reuters that Tencent’s Extended Reality division was set up last year, but so far it has been “shrouded in secrecy.” The unit will eventually have 300 employees, they said, despite ongoing efforts to cut costs at the company.

Reuters reports That Tencent’s Extended Reality division is working on a headset, marking its first venture into hardware, as well as software. One source said the section is a “passionate project” of Tencent founder Pony Ma, who described the metaverse as a “real, all-encompassing Internet.”

The new division is led by Lee Shen, chief technology officer of Tencent’s gaming division, and will be located in the company’s Interactive Entertainment Group.

Tencent gave an indication of its metaverse plans last November, when CEO Martin Lau told investors there were “multiple paths” in the market, including through interactive games and social networking. “We have a lot of technical building blocks and capabilities that will allow us to get closer to the metaverse opportunity,” Lau said.

The company has also registered more than 20 metaverse-related brands for its various applications within China.

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Jared Klee, an analyst at Futurum Research, says Tencent’s investment in the metaverse is more than just a “me too” strategy. “Tencent has a strong track record of funding things in the early stages and seeing them pay off, so I don’t think this is just a ‘fear of getting lost’ but a serious investment that fits in with the scale in which the company operates,” Klee said. Technology Monitor.

Tencent is the world’s largest publisher of video games, including hit titles league of legends And the PUBG Underground. But it also provides IT services to enterprises including cloud computing and artificial intelligence, as well as financial services. Klee expects Tencent’s metaverse strategy to focus on gaming first, and then expand into other areas.

“They probably won’t see this as a stand-alone thing but a natural progression from playing games and working in a hospital and other situations. The goal will likely be how to expand existing work into the metaverse, although games are likely to be the first to adopt” .

Tencent’s broad customer base – its WeChat social messaging app is the most used in the world – will bolster its meta ambitions, she says Stephen Dickens, another analyst at Futurum Research. “With WeChat and its widespread presence in China, the company is well positioned to take any XR technology to a huge user base.”

Klee and Dickens were surprised by the company’s hardware adventure. “I’m not convinced Tencent wants to be a hardware company,” says Dickens. “If I had been wearing Tencent shoes, I would have tried hardware to see the requirements but then became hardware neutral.”

Facebook’s parent company dead She’s been more vocal in her commitment to metaverses, with founder Mark Zuckerberg effectively betting on the company’s future, but many other tech giants have made metaverse plays. Both Apple and ByteDance, for example, are evolving Virtual Reality Headphones.

So far, a lot of that investment has to do with video games. When Microsoft got world of cans Publisher Activision Blizzard Earlier this year, CEO Satya Nadella said that games “will play a major role in the development of the metaverse platforms.”

A recent report from global consulting firm McKinsey predicted that global reverse spending It will reach $5 trillion by 2030. McKinsey conducted a survey of active consumers in the metaverse, and found that 79% had made some type of purchase in the past year. The most popular payment method was in-game purchases, with 47% of respondents.

Part of the metaverse’s promise is that users will be able to transfer avatars, identities, and other digital assets between virtual spaces. So far, however, companies have largely developed their metaverse strategies in isolation. But the prospect of interoperability in the metaverse took a step forward this week with the establishment of Metaverse Standards Forumwhich aims to develop interoperability standards for a new technology model.

Supporters of the project include Adobe, Alibaba, Autodesk, Epic Games, Huawei, IKEA, Khronos, Meta, Microsoft, NVIDIA, Qualcomm Technologies, Sony and Unity. The forum includes current standards bodies such as the Web3D Consortium, the World Wide Web Consortium, and the XR Association (XRA).

“The metaverse will bring together diverse technologies, requiring a set of interoperability standards, created and maintained by several standards organizations,” said Neil Trivett, president of Khronos, a consortium that develops interoperability standards for 3D graphics that “hosts” the forum. “The Metaverse Standards Forum is a unique place for coordination between standards organizations and industry, with a mission to promote the realistic and timely standardization that will be essential to an open and inclusive metaverse.”

Klee expects most major tech companies to announce or begin planning metaverse strategies in the coming months, given the potential size of the market. But there is a long way to go before we live and Work at Metaversehe adds.

“We need to be realistic about the timelines,” he says. “It’s clear we’re going up [and] We didn’t go through with a dip as we were disappointed with the first release. It’s real, the ball is rolling and we see a physical investment that will set this up for success. We won’t be living in the Metaverse Zone for long to come.”

Read more: Virtual worlds, real money: why big companies invest in the metaverse