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Tencent, the China-based multinational known for WeChat and a host of mobile games, reportedly announced to staff that was creating a unit dedicated building out its XR offerings.

As reported by Reuters, Tencent allegedly told staff on Monday about the official formation of a unit tasked with building up its XR business, which is said to include both software and hardware projects. The internal XR unit was supposedly launched in secrecy earlier this year.

Tencent Games Global’s Chief Technology Officer Li Shen is said to head the unit, and it will be a wing of its Interactive Entertainment business group. It’s also said the company is aiming to hire over 300 staff members to fill various XR roles.

The report maintains that Tencent founder and chief executive Pony Ma views the XR unit as a passion project, underling the importance of the metaverse by dubbing it in 2020 an “all-real internet.” Tencent has yet to comment on the information alleged in the report.

This follows continued downsizing by Tencent, first announced in May. At the time, it was said the Shenzhen-based company would reduce its headcount to between 10%-15% this year alone.

At least within China, it seems Tencent is primarily looking to compete with TikTok parent company ByteDance, which acquired Chinese VR headset creator Pico Interactive for an estimated $775 million in August 2021.

However with ByteDance pouring millions into VR developer support, it’s clear the target is a wider launch in Western markets, with the company’s Quest 2 competitor, Pico Neo 3 Link, now available in Europe and coming soon the United States.