Metaverse Photo: VCG

Chinese tech company Tencent is reportedly overhauling the hardware development roadmap of its mixed reality (XR) business, and staff involved in the business transition will also be "adjusted," the Global Times learned from sources close to the company. 
The source stressed that the move does not signal that Tencent is giving up its XR exploration, and the company would still consider businesses "in other directions."
Employees affected by the decision will be provided with a two-month transitional period, and they will receive priorities in arranging interim job transfer and external job recommendation opportunities, the source noted.
Tencent previously bet heavily on the metaverse concept of virtual worlds. In June 2022, the company announced the official formation of XR unit, which was tasked with building up the extended reality business for Tencent including both software and hardware that time, the Reuters reported. The unit has about 300 employees, according to a report by domestic news portal 36kr.com on Thursday. 
Tencent's move comes as a host of global tech giants including Microsoft and Meta have either downsized their metaverse teams or suspended investment in the area, amid an artificial intelligence (AI) chatbot frenzy that has somewhat put brakes on hefty investment in metaverse, a market buzzword that almost all tech firms had raced on.
"The metaverse is losing the glamour due to a range of restrictions from the technology, infrastructure to ecosystem, which means it could take ten years or more for a mature metaverse application to be launched. And due to the slower-than-expected progress, market expectations have dwindled drastically over the past year," a crypto industry insider surnamed Zheng told the Global Times on Thursday. 
Nevertheless, he noted that AI business is "a clear direction" which companies could quickly pocket profits from, and that's why all tech companies are rushing to "get on board" on the technology. "It's also part of the broad strategy to improve efficiency amid economic downturn," Zheng said.  
In January, Microsoft reportedly laid off the entire teams behind Virtual, Mixed Reality, and mixed reality hardware HoloLens. AltspaceVR, a metaverse social networking platform the company launched in 2015, will also shutter in March. In contrast, the company in January announced a new multiyear, multibillion-dollar investment with ChatGPT-maker OpenAI.
Meta also recorded massive losses in its metaverse business Reality Labs. In 2022, Meta lost $13.7 billion on Reality Labs, and the amount of losses jumped 35 percent compared with that of 2021. In 2021, Mark Zuckerberg, CEO of Facebook, changed the company's name to Meta Platforms, signaling that time a high-profile ambition to commit the future of his company to building a metaverse.