Tencent is apparently planning on abandoning one of its more recent projects. The company is rumored to be ending its VR (Virtual Reality) hardware project. So here are all the details.

With the unveiling of the Metaverse, brands rushed to launch their own products that would enable users to tap into the new sphere of social networking. However, it seems that it wasn’t quite an easy market to capture. The Chinese tech giant was originally planning on building VR based products through its XR unit last year. But now it has seemingly asking its staff to “seek other opportunities” after the hype behind Metaverse died down.

As per a new report, the company faced “Difficulties in achieving quick profitability”. In simpler terms, the amount of money it would have to spend to compete with other rival brands in the same category wouldn’t have brought in any profit. Furthermore, this decision was also made following a lack of compelling games and non gaming apps, which were the original reason that saw the company focus in virtual reality.

Previously, Tencent had also made a “ring like handheld game controller” concept, but this unit wouldn’t have been profitable until 2027. Thus, the company decided to pull the plug on this project. The brand has worked in VR for sometime now, but it appears that it no longer sees a point in entering the market with its own hardware for the time being. So stick around for more updates regarding this matter.

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A new report has just revealed that Tencent Group is planning on buying the Black Shark brand and integrating it with its own Content Business Group. The move from the company arrives as it apparently plans to step into the Metaverse.

The news arrives from 36Kr and multiple independent sources who stated that the Chinese tech giant aims on acquiring the gaming smartphone maker. It adds that the gaming smartphone making company will also undergo a business transformation after the acquisition process is complete. In other words, Black Shark as a brand would likely see an expansion once the transaction is completed.

This diversification process will reportedly grow to include VR (Virtual Reality) based technologies and devices. So, the software content for VR will be provided by Tencent while Black Shark manufactures the hardware. For those unaware, the gaming smartphone brand is a relatively young company that was established back in 2017 and was backed by another Chinese tech giant, Xiaomi. As of right now, Xiaomi is the majority shareholder, holding around 46.4 percent stake in Black Shark. Unfortunately, Tencent has yet to official comment on this news at the moment.

Although, with tech companies moving towards the AR/VR field, especially after the introduction of the Metaverse, it was only a matter of time before the Chinese company would also make its move. Back in Q3 2021, the brand had even filed for a number of trademarks for technologies for the Metaverse. While the company has yet to confirm this news, it makes sense that the group would seek out an experienced brand that has its own facilities for R&D and manufacturing to build a platform through which its content can be accessed.

This isn’t something new either, since Facebook had previously acquired Oculus in the past to fill up the hardware gap in its plans to provide both VR content along with the devices that allows you to access the VR world. Another source added that Tencent was likely in contact with all AR/VR related projects on the market, such as HTC. But since the group is known for a number of its popular gaming titles in the market, it isn’t odd that it chose Black Shark. Both brands have also previously partnered up for the latter’s gaming smartphones as well.

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Tencent Holdings, one of the Chinese giants, is negotiating agreements with the United States national security panel as it eyes permission to keep its ownership stakes in the US-based gaming companies like Riot Games and Epic Games, reports Reuters citing people familiar with the matter.

The report adds that Tencent has been in talks with the Committee on Foreign Investment in the United States (CFIUS) since last year. The committee has the authority to order the Chinese technology giant to divest its holdings in the U.S.

On the other hand, the report adds that CFIUS has been looking into whether Epic Games‘ and Riot Games’ handling of the personal data of their users constitutes a national security risk because of their Chinese ownership.

For those who are unaware, Tencent holds around 40 percent stake in Epic Games which is a maker of the popular game Fortnite. The Chinese giant had bought a majority stake in Riot Games in 2011 and acquired the remaining stake in 2015. Riot Games is the developer of League of Legends.

A Riot Games spokesman said to Reuters that the company operates independently of Tencent and that it has implemented “industry-leading practices” to protect player data.

Committee on Foreign Investment in the United States (CFIUS) has been cracking down on Chinese ownership of U.S. technology assets in the last few years amid an escalation in tensions between both the countries over trade, human rights, and the protection of intellectual property. The United States is concerned about the data of its citizens could end up in the hands of China’s Communist Party government.

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The United States is taking its trade war with China a step further. After banning several Chinese companies and forcing TikTok to sell its business to an American company, it is now issuing notices to companies that have ties with China-based Tencent Holdings.

As per the report from Bloomberg, the U.S. Treasury’s Committee on Foreign Investment in the U.S. (CFIUS) has asked gaming companies including Riot Games and Epic Games, to provide information on security protocols.

CFIUS investigates foreign acquisitions of American businesses for national security risks. It has the authority to examine full acquisitions as well as non-controlling investments and provide recommendations to block or unwind deals.

This new development is likely because of the company’s deep ties with Tencent Holdings. Riot Games, which has developed Valorant and League of Legends, is a fully-owned subsidiary of Tencent while the Chinese giant holds about 40 percent take in Epic Games.

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Recently, U.S. President Donald Trump issued an executive order which prohibits transactions with the popular instant messaging app WeChat and social platform TikTok. The ban is set to take effect 45 days from the date of order (7th August).

Epic Games has been in the news for a couple of weeks after it sued Apple and Google for removing its game Fortnite from the App Store and Play Store. It all began after the gaming firm introduced its own in-app payments system on Fortnite which skirted the 30 percent fee that Apple charges for each transaction.

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