With the smartphone market getting saturated, Qualcomm Inc. (QCOM) has been looking to diversify into other growth areas, including the gaming market, so it announced a partnership with Interactive Entertainment Group, a unit of China game content provider Tencent earlier Tuesday. The two are partnering to come up with ways to create immersive experiences for gaming and entertainment consumers.

In a press release, Qualcomm’s Qualcomm Communications unit in China and IEG said they will create a “joint innovation” center to come up with new gaming and applications for consumers.

"As virtual and augmented reality deployment accelerates, mobile has many distinct advantages, such as making it possible to enjoy incredibly immersive content wirelessly virtually anywhere you go," said Adrian Ong, vice president, business development, Qualcomm China, in the news release. "The relationship between Tencent and Qualcomm Wireless Communication Technologies (China) Limited will help accelerate these new, mobile AR and VR gaming and entertainment experiences, as we utilize the best of both companies' technologies and engineering expertise." Qualcomm wants its Snapdragon processors to play a role in the advances in augmented and virtual reality.

Qualcomm Looking Beyond Even Automotive, IoT

While most of the attention has been focused on Qualcomm’s pending acquisition of NXP Semiconductors and its push into the automotive and Internet of Things markets, Qualcomm has been eyeing gaming as a pathway to new growth. In early September, Qualcomm rolled out a reference platform for a stand-alone virtual-reality headset dubbed Snapdragon VR820.

The headset, which Qualcomm developed in tandem with Chinese electronics company Goertek, is built on the company’s Snapdragon 820 mobile processor and software kit. The reference design, which it said can be easily adapted into products by other companies, is expected to be available by the end of 2016. Qualcomm predicts commercial devices based on Snapdragon VR820 will be released following quickly after that. (See also: Qualcomm Shows Off Virtual-Reality Headset that Could Reduce Costs Industry-Wide.)

Qualcomm’s move to offer companies a reference design to create virtual-reality products could result in lower prices for the devices industry wide. It’s similar to what Qualcomm did in the smartphone industry, offering reference designs that white-label designers can turn around and use to make lower-cost VR headsets. Ultimately Qualcomm’s strategy could result in a new generation of low-cost VR devices that will be a lot cheaper than what they cost today.