On June 20, tech giant Tencent Holdings announced that it would be establishing a new extended reality (XR) department that will helm metaverse-related businesses.

Consisting of up to 300 employees (a large workforce given the recent cuts at tech companies), the department will work on both hardware and software.

The news has generated a decent amount of buzz on Chinese social media. Not only has the hashtag related to the general announcement gained more than 130 million views on Weibo, but another on the implications of this move has gained over 2.8 million views.

“Will Tencent be the one to succeed in building the metaverse?” reads one comment.

“Tencent is very good in the gaming sector; they might be good at developing the metaverse too,” wrote another netizen.

Extended reality is a loosely defined umbrella term that addresses computer-generated realities such as virtual and augmented reality (VR and AR).

Not much is known about the exact tasks the department will undertake, but sources have called it a “passion project” of Tencent’s founder and CEO, Pony Ma.

Many believe that Tencent plans to play an active role in the metaverse race and will compete with other Chinese companies such as Alibaba and ByteDance, which owns TikTok.

While it’s hard to predict what a comprehensive ‘Chinese Metaverse’ will look like, the concept has been a hot topic in both the private and public sectors, with the Shanghai government even including it in its five-year development plan.

Cover image via Weibo