ByteDance Remains Committed to Virtual Reality Business Pico

ByteDance, will not close virtual reality (VR) business Pico (photo: twitter @Sino_Market ·)

JAKARTA - TikTok owner ByteDance announced on Tuesday, October 24, that it will not close its virtual reality (VR) business Pico and remains committed long-term to the industry. This announcement comes after reports that the Chinese company plans to gradually reduce support for the Pico brand.

The statement came after Chinese research firm EqualOcean published a report saying that ByteDance founder Zhang Yiming told Pico's management team that ByteDance would slowly wind down Pico's business.

"Reports that we will close Pico are not true. Pico is operating normally and the company will continue to invest in the extended reality (XR) business in the long term," ByteDance said, as quoted by Reuters. XR is a broader term that includes VR and other headset-related technologies.

The Pico headset is often considered ByteDance's answer to the popular Quest headset developed by Meta Platforms Inc. Pico has the largest market share for VR headsets in China, accounting for more than 58% of the market, as Meta's Quest device has not yet officially entered the country.

On Tuesday, a separate story published by Chinese online news site The Paper said that ByteDance was reconsidering its Pico strategy and that nearly half of the unit's employees had left the company. They also said that several senior executives had effectively been removed from the Pico business.

Although without providing further explanation, ByteDance said in a separate statement that the company "will maintain normal operation of the product and continue to increase investment in product technology."

ByteDance has been promoting Pico in international markets. The Wall Street Journal reported earlier this year that Pico had increased its headset shipments last year while Meta headset shipments had decreased. ByteDance has also started paying software developers to bring more apps to its ecosystem.

However, signs of trouble began to emerge for Pico at the start of this year. In February, Reuters reported that Pico had laid off more than 200 employees to streamline the company.

ByteDance acquired Pico in August 2021, right at the height of the metaverse hype. But the buzz around the metaverse has died down since then. According to research firm IDC, shipments of extended reality (AR) and VR headsets declined for the fourth consecutive quarter, with volume down 44.6% year over year during the second quarter of this year.