On October 21st, it was reported by the media that the head of PICO, a VR company under ByteDance, recently went to Singapore to report on their work. The feedback received indicated that ByteDance will gradually abandon its VR business. The reason is that the hardware field in which PICO operates is not ByteDance’s expertise. Additionally, in recent years, the achievements made after acquiring PICO have not met ByteDance’s expectations. As a result, capital and public attention have shifted more towards the AI field.
Regarding this, the reporter sought confirmation from ByteDance, and a relevant person from ByteDance responded: This news is not true. PICO is currently operating normally, and ByteDance will also continue to invest in XR business for the long term. Another source from PICO also denied this possibility to the reporter, stating that internal hardware release plans for PICO are still proceeding as usual.
PICO was founded in 2015 and was a subsidiary of Goertek before being acquired by ByteDance in 2022. In less than six years, PICO has become the leading VR hardware manufacturer in the domestic market, surpassing competitors such as iQiyi VR and HTC VIVE, with a market share of over 50%. It has also become the second-largest global VR headset manufacturer in terms of market share.
After the acquisition, ByteDance not only made significant investments in hardware subsidies, VR game content, and other areas for PICO but also provided traffic support across the entire PICO platform. By leveraging Douyin’s live streaming sales promotion and collaborations with industry KOLs (Key Opinion Leaders), it brought PICO exposure to over 1.1 billion people through various channels. However, PICO has consistently failed to achieve the projected shipment volume of one million units set by ByteDance internally, and there have been multiple reports of layoffs at PICO.
Starting from 2022, PICO has been gradually laying off employees. The most recent round of layoffs occurred in February 2023: ByteDance cut approximately 15% of the staff in its PICO business. The teams affected the most were operations, marketing, sales, and other related functional positions based in Beijing.
Even though Apple’s release of Vision Pro has settled the dust, the VR market experienced a significant contraction in 2023. The main reason is that current VR/AR hardware struggles to provide longer user experiences, and product limitations restrict further exploration of usage scenarios. Global shipments of augmented reality and virtual reality headsets have declined for four consecutive quarters, with a year-on-year decrease of 44.6% in Q2 2023. Shipments were only slightly higher than those in 2017.
“At present, content production still revolves around existing content consumption, and the new ecosystem is still being explored. Apple also shares this perspective.” said Misa, the founder of AR glasses company Rokid, when evaluating the current stage of VR/AR ecosystem.
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