The pioneering Chinese multinational tech giant, Tencent, is reportedly creating an extended reality division that will solely focus on developing the company’s XR products and services.

The company behind well-known global brands like WeChat and QQ.com revealed the strategic direction it aims to take with XR to its employees earlier this week. According to reports, it has formed a unit tasked with building Tencent’s XR business, integrating both hardware and software projects. The unit was possibly working under the wraps throughout this year.

The new unit could have Tencent Games Global Chief Technology Officer Li Shen at the helm and function as a wing within the company’s Interactive Entertainment business group. The company is also looking to hire more than 300 personnel for various functions and roles within the XR division.

Tencent founder and CEO Pony Ma is believed to be viewing the XR division as a passion project. However, the company has made no official announcement in this regard yet.

The reports come amid the ongoing downsizing exercise at the company that it announced earlier in May. It was reported that Tencent was looking to cut down its headcount by between 10% and 15% within 2022 alone.

The company’s primary competitor in the Chinese market continues to be the TikTok parent, ByteDance. In August last year, ByteDance acquired the Chinese VR headset manufacturer Pico Interactive for $775 million to accelerate its entry into the extended reality space.

Moreover, ByteDance is currently infusing substantial funds into the virtual reality developer to try and capture the wider markets in the West. The company’s Pico Neo 3 Link headset has already made its debut in Europe and will launch in the American market soon.

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