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  • Lawrence Ng

Tencent Cuts XR Gaming Unit Amid Failed Blackshark Takeover

Tech giant Tencent announced that it is laying off personnel from its extended reality (XR) gaming subsidiary, which was founded in June of last year. Employees have been offered a two-month window in which to obtain internal or external employment possibilities. The company says that it will not forsake XR technology but it will seek other opportunities instead.


The XR unit which covers Augmented Reality, Virtual Reality & Mix Reality, is led by Senior Vice President Steven Ma, who also supervised Tencent Games' worldwide distribution, while the business side was led by SHEN Li, the CEO of NexT Studios. Ma committed to build the ER unit as a "industry standard" in virtual reality goods when it was unveiled with considerable excitement. However, the unit fell well short of this goal, hardly having an influence on the business. Five months later, Shen departed Tencent.

Blackshark 4 Pro in hand
Blackshark 4 Pro

Tencent was allegedly in discussions to buy Black Shark, a specialty smartphone manufacturer focusing on mobile gaming and virtual reality equipment backed by Xiaomi, last year. The merger fell apart when Black Shark ran out of funds and was faced with distressed ex-employees waiting for long overdue wages.

According to Chinese media sources, Black Shark, the Xiaomi-backed gaming phone company, is encountering difficulties as it fires the majority of its staff. Black Shark has gone through many rounds of layoffs since August 2022, reducing its employment from over 1,000 to just over 100 people. Ex-employees are requesting full severance compensation, and some have taken to the social media site Weibo to express their displeasure. In Jan 2023 , over 100 impacted employees have taken legal action against the company. 

  • Tencent, which created its extended reality (XR) gaming division last June, announced layoffs. The company will explore other opportunities but not ditch XR technology.

  • The XR Unit, which includes Augmented, Virtual, and Mix Reality  was launched with excitement and touted to set "industry standard" in virtual reality products. However the  unit failed to meet its goal and its Business Head left the company after just 5 months. 

  • Tencent reportedly failed to acquire Black Shark, a Xiaomi-backed smartphone maker specialising in mobile gaming after it ran out of funds and was confronted unhappy ex-employees demanding long-overdue payments.

  • The gaming phone company laid off over 90% of its employees since August last year.

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