Facebook and Xiaomi to Launch VR Headset in China -- Update

Facebook Inc. and Chinese smartphone company Xiaomi Corp. are teaming up to launch a virtual-reality headset in China that would give the American tech giant a toehold in a growing market where its main business has long been blocked.

The two tech companies are working together to develop a VR headset sold only in China called Mi VR Standalone, Facebook said Monday. The new device is modeled after Facebook's Oculus Go, a previously announced $199 headset that the company plans to launch outside of China in early 2018.

Xiaomi is also Facebook's manufacturing partner for Oculus Go, the Silicon Valley company said. Facebook declined to comment on any revenue-sharing arrangement with Xiaomi, which will take a lead role in the Mi's rollout.

The Mi headsets will be stamped with the Oculus logo, giving Facebook's products exposure in China, where the company's services have been blocked since 2009. Facebook needs to crack the large and growing China market to meet its previously stated goal of "connecting the world," but Chinese officials show few signs of changing their policy.

Facebook executives spent years publicly courting Chinese officials, making Chief Executive Mark Zuckerberg more visible and internally developing a tool that people familiar with the matter say would have allowed third parties -- including governments like China -- to block content before it could be posted on Facebook.

More recently, however, Facebook has adopted a quieter approach. Last May, the company covertly launched a photo-sharing app in China called Colorful Balloons under the name of a different company.

The latest Xiaomi deal is partly the handiwork of Hugo Barra, the former Xiaomi executive who joined Facebook a year ago to oversee the social-media company's virtual-reality efforts. Mr. Barra's portfolio includes Oculus VR, which Facebook bought for more than $2 billion in 2014.

The two companies won't share any data about their users, a Facebook spokeswoman said. Users of the Xiaomi headset won't be able to access the main Facebook service, used by more than two billion people a month world-wide, but developers working with the Oculus platform will be able to share their content to the Mi platform in China.

Both Oculus Go and Xiaomi Mi are standalone headsets that don't require a personal computer or mobile phone to work. That is unlike Oculus's debut device, the Rift virtual-reality goggles, which need to be tethered to a powerful computer to work, or the Samsung Gear VR, a smartphone-powered headset jointly developed by Facebook and Samsung Electronics Co.

Write to Deepa Seetharaman at Deepa.Seetharaman@wsj.com

(END) Dow Jones Newswires

January 08, 2018 19:37 ET (00:37 GMT)