Image: Black Shark

BEIJING, January 10 (TMTPOST) — Chinese Internet and game giant Tencent is planning to acquire smartphone company Black Shark, tech media 36Kr reported.

Under the deal, Black Shark will merge with Tencent's Platform & Content Group directed by Ren Yuxin.

Black Shark will shift its focus from smartphones for gaming to VR devices, according to the deal. While Black Shark will provide VR devices for consumers, Tencent will be supplying the content.

Founded in 2017 with financing support from Xiaomi, Black Shark specializes in making smartphones and accessories for gaming. According to information on enterprise record platform Tianyancha, Tianjin Venture Capital, owned by Xiaomi, holds 46.4% of Black Shark's shares, which makes it the biggest shareholder of Black Shark. Black Shark's founder and CEO Luo Yuzhou served as the vice president of Huawei's consumer business in China before.

Black Shark is known for its smartphones for gaming. Statistics show the brand enjoys the biggest market share in its niche market. The acquisition of Black Shark is approved by Xiaomi, 36Kr reported.

"Black Shark is valued at three billion yuan. Tencent got the valuation down to around 2.6~2.7 billion yuan," a source familiar with the matter told 36Kr.

Tencent has declined 36Kr's request for comment on the matter.

Though smartphone makers have clear disadvantages in making VR technologies, 36Kr was informed by industry experts that it is not difficult for smartphone makers to make up the gap.

There are already mature suppliers of VR technologies in the VR industrial chain. An industry expert said it would only take a team of over a hundred people and tens of millions of yuan to develop a VR product.

Black Shark has already started to explore the VR business since late 2021, 36Kr reported, quoting sources. "They (Black Shark) have been asking around about how to make a VR device," several sources with knowledge on the matter told 36Kr.