The metaverse is far from profitable. Tencent has reached this conclusion, according to sources consulted by Reuters. The Chinese video game publisher, which is the largest in the world in terms of revenue and market value, is promoting changes in your plans for the next few years after a recent discouraging market analysis.
Concerned about the strong commitment of Meta, Tencent wanted to get on the bandwagon of this new concept to work, study and have fun in an immersive way. In this sense, the Asian giant began in 2021 to work on a virtual reality (VR) ecosystem made up of software and hardware developed by itself under a new division in the company.
Tencent takes a step back into the metaverse
According to the news agency, Tencent’s plans included creating flagship VR products for the next four to five years. The plan was ambitious since it contemplated presenting a development platform, games and hardwarestarting with a unit for developers so they could start creating software.
One of the most innovative points, in addition to a helmet, came from the hand of a ring-shaped AR controller, a concept that according to its creators offered an innovative way to access the new virtual experience. Now, much of this entire effort has just been put on hold. Specifically, we will not see Tencent hardware destined for this field, at least for now.
After analyzing the economic prospects, the Chinese company has decided to implement a plan of cost and personnel reduction in its division destined for the metaverse. Tencent had recently hired 300 people, but it is unknown how many will leave the company. If there are certainties that the development of the aforementioned device will not continue.
Internal projections estimate that the project could reach profitability in 2027, a period too far away in time that does not fit with the company’s current objectives. It should be noted that Tencent has not been the only one to predict that the good news related to the metaverse will take time to arrive. Meta, which has lost millions of dollars in this concept, is one of them.
Marck Zuckerberg himself said at the beginning of last year that the metaverse would be “exciting” in 2030. In addition, the creators of Facebook also recognized that there were still years of development and research to create hardware devices good enough to deliver the immersive experience they envisioned.
One point is that unlike other businesses, we are seeing the metaverse unfold live, which may lead to a higher volume of criticism. For example, due to the graphics of Meta’s Horizon Worlds. That, however, does not mean that many of us will end up submerged in one of these virtual worlds in the future. In time we will know.
Images: Maxime Doré | Minh Pham
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