With a population of 1.4 billion people, China represents a large percentage of the potential VR market. However, as Facebook has been blocked in China since 2009, Meta is yet to tap into this financially lucrative corner of the planet.
Now, Wall Street Journal reports suggest that Meta CEO Mark Zuckerberg hopes to re-enter China with Quest. According to the reports, Meta has held talks with several tech firms in China, with the greatest progress being made with entertainment conglomerate Tencent.
According to the Wall Street Journal, discussions came to a head late in 2022, when Pony Ma, Tencent’s Chairman, said that the company would “see what deals they could reach” when they proceed with negotiations. So, what would such a deal look like?
Let’s take a look at the potential Meta-Tencent deal that could see Quest entering the massive Chinese market.
Why Is Meta Not In China?
Back in 2009, both Twitter and Facebook were completely banned in China for breach of censorship regulations. It’s believed that the motivating factor behind the ban was the July 2009 Ürümqi riots in China’s Xinjiang Uyghur Autonomous Region.
In more recent years, Zuckerberg has been perceived as being unfriendly toward China. Much of this comes from Meta’s response to competition from Chinese tech giants, ByteDance, owners of TikTok, who Zuckerberg claims have stolen technology.
Who Is Tencent?
Tencent was founded in 1998. The conglomerate owns subsidiaries worldwide, specialising in entertainment, internet-related services, AI, and other technology.
Brands like Epic Games, Riot Games, and Ubisoft are owned by Tencent, as are instant messaging and social media app WeChat. Tencent has stakes in over 600 companies and has previously invested in Discord and Snapchat. The company is ranked in the top ten most valuable countries globally.
What Would a Meta-Tencent Deal Look Like?
So far, both Meta and Tencent are yet to respond to requests for comments publicly. VR content distribution and Chinese market moderation could be a sticking point for the two companies. So far, it’s been suggested that Meta’s current global offerings would feature side-by-side with apps and services from Tencent.
There have been previous attempts at getting Meta VR hardware onto the Chinese market. Back in 2018, Facebook made a deal with Xiaomi to launch a Chinese version of the Oculus Go. The result of the arrangement was the launch of the “Mi VR Standalone”, which was a rebranded Oculus with different software. At the time, Xiaomi manufactured the Oculus Go for Facebook.
But with the launch of Meta Quest 3 just months away, there isn’t a similar manufacturing deal in place in China. So, a potential collaboration with Tencent will unlikely repeat the deal with Xiaomi. Instead, this is more about Meta fully entering the fastest-growing global market.
Launching the Quest in China could recoup some of the billions Meta has spent developing the metaverse. With several of the leading VR developers being based in China, bringing Meta back in could aid Bejing’s hopes of being the centre of metaverse innovation and development.