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Tencent Corporation officializes its aquisition of Black Shark

In China, the best company to benefit from the metaverse is clearly Tencent. Over 1.26 billion people in China use Tencent’s WeChat application, while Meta’s Facebook and Instagram platforms dominate worldwide social media.

Tencent also outperforms Meta in terms of mobile gaming, which could be another important metaverse use. Tencent is China’s largest game publisher and a major investor in many of the world’s most well-known gaming studios.

While Tencent has a mobile gaming advantage over Meta. It has yet to establish a virtual reality headset unit, as Meta has done with its Oculus platform.

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Tencent is buying Black Shark

The chinese company was reported to be acquiring Black Shark by Chinese media source 36Kr on Monday. Black Shark is a company that develops gaming-oriented mobile phones and accessories. It was founded in 2017 and is sponsored by Chinese phone giant Xiaomi (OTC:XIACY). According to the article, after Tencent buys Black Shark, the company would change its business model and invest in AR/VR devices.

According to sources, Tencent is paying between RMB2.6 and 2.7 billion ($410 and $425 million). Compared to the $2 billion that Oculus spent in 2014, that’s a paltry sum.

Of course, Black Shark does not yet produce a headset, which will necessitate further expenditure. So why did Tencent go with Black Shark, a business that has only developed phones so far, rather than headsets?

Black Shark, according to 36kr, has become somewhat redundant for Xiaomi. In spite of the small number of Chinese residents who purchased gaming phones, Mi and Redmi phones offer enhanced gaming capabilities.

Black Shark, on the other hand, had honed its skills in converting games for high-end mobile experiences, particularly when working with Qualcomm CPUs. Qualcomm’s modems, just as they were in mobile phones, should continue to be critical for virtual reality and metaverse applications. As a result, that kind of technological know-how might be extremely important in the nascent metaverse.

Black Shark could be a missing piece of the metaverse puzzle for Tencent

Although Black Shark’s VR technology isn’t as advanced as Oculus’, the acquisition appears to be a low-cost option for Tencent to enter the augmented- and virtual-reality hardware market. As China’s top video game distributor, Tencent already has extensive software and platform knowledge, as well as significant ownership stakes in a number of prominent game studios. Epic Games and Roblox, the creators of the Unreal Engine and Roblox Studio gaming engines, are among them.

Image credits: Shutterstock, CC images, Midjourney, Unsplash.

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