Tencent makes moves to build metaverse

Chinese tech giant Tencent Holdings is reportedly planning to acquire gaming smartphone manufacturer Black Shark in a move that could help the company build its own metaverse.

If the acquisition goes ahead, Black Shark will shift its business focus from gaming mobile phones to virtual reality hardware, according to a report from news outlet 36kr.

Black Shark, which has a presence in China, Europe and south Asia, is currently majority-owned by technology giant Xiaomi.

As noted by Bloomberg in November, making a play for the metaverse is a logical step for Tencent.

The company already owns a stake in video game company Epic Games – the maker of Fortnite which has hosted virtual concerts from the likes of  Travis Scott, Ariana Grande, Marshmello, Steve Aoki, Deadmau5, Easy Life and J. Balvin.

Tencent Holdings invested $330 million in Epic Games in 2012 (around five years before Fortnite was released) in return for a 40% stake.

“We felt that we have a lot of tech and capability building blocks that will allow us to approach the Metaverse opportunities”

The company also entered into a strategic partnership with Roblox, in May 2019, in which Tencent holds a 49% stake. Last year, Tencent filed for two Metaverse-related trademarks.

Tencent president Martin Lau spoke about the company’s positioning to build a metaverse during the company’s Q3 earnings call in November: “In terms of our capabilities and our positioning, we felt we actually have a lot of the technology and know-how building blocks for us to explore and develop for the Metaverse opportunity”.

He continued: “For example, we have a lot of gaming experiences. We also have very strong social networking experience. In addition to that, in terms of technology building blocks, we have engine capability, we have AI capability, we have the capability to build large server architecture that can serve a huge number of concurrent users.”

Tencent has stiff competition from other tech giants in a race to build the metaverse – namely from Meta (formerly known as Facebook).

The company announced plans in October 2021 to hire 10,000 people to accelerate its development of a metaverse but it has promised to collaborate, adding, “it won’t be built overnight by a single company”.

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