Tencent walks away from deal to buy Black Shark gaming phone brand as regulatory scrutiny of metaverse ramps up: report
- Many Chinese businesses have rushed to embrace the metaverse concept but Beijing has been scrutinising the industry closely
- Multiple trademark applications containing the word ‘yuan yuzhou’ – which translates as metaverse – have been rejected by authorities
Tencent began talks with the phone brand in January with the aim of having it make virtual reality (VR) headsets for metaverse-related content, but the internet and gaming giant has decided to walk away after it failed to get approval from authorities for a deal, local newspaper the 21st Century Business Herald reported on Thursday.
A potential acquisition of Black Shark by Tencent would have marked the Shenzhen-based company’s first investment in a hardware maker in the metaverse field, perhaps heralding more investment in the emerging sector.
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Tencent declined to comment on Thursday. Black Shark did not immediately respond to a request for comment from the South China Morning Post.
The aborted metaverse venture comes as several Chinese firms, including Tik Tok operator ByteDance and Alibaba Group Holding, which owns the Post, have hit regulatory red flags with forays into the metaverse in recent weeks, signalling that Beijing is scrutinising industry developments closely.
Multiple trademark applications containing the word “yuan yuzhou” – which translates as metaverse – have been rejected by the National Intellectual Property Administration, according to data from business and trademark registration tracking firm Tianyancha.
Some of those applications denied registration include “Ali Metaverse”, “Taobao Metaverse” and “QQ Metaverse”, according to Tianyancha. Taobao is the name of Alibaba’s flagship online marketplace, and QQ is Tencent’s chat app.
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“The highly immersive and decentralised feature of the metaverse is likely to give rise to new ideologies … some of which might be radical and cause a severe impact on mainstream ideology and traditional social governance,” said Li Zheng, a researcher at the China Institutes of Contemporary International Relations, in an article published in state-run newspaper Guangming Daily this week.
It has set up a 1 billion yuan (US$148.7 million) fund to support companies that want to explore metaverse-related technologies in fields such as manufacturing, healthcare and commerce.
