Bytedance to gradually shut down Pico, report says – Bytedance denies

According to a Chinese report, Pico Interactive (Pico 4) is nearing completion. Bytedance owner plans to shut down virtual reality headset maker

Recently, there have been false rumors about the Pico 5 VR headset. Now the rumors are turning the other way and if true, it will be a disaster for the VR industry.

Bytedance (Tiktok) is looking to phase out VR company Pico Interactive in 2021, according to a report from Equal Ocean, an international investment research and information services company founded in 2018 and based in China and the United States. bought

According to the article, Pico’s chairman, Henry Zhou, is likely to have recently been instructed to report to Bytedance CEO Zhang Yiming. Apparently he was there to personally report on the state of affairs for Pico Interactive.

Bytedance is unhappy with Pico’s business development

Bytedance is said to have explained that Pico’s business has not developed as expected and therefore Pico Interactive will be discontinued over time.

Sources directly connected to Pico say this is because the hardware domain that PICO is in is not what ByteDance is good at, and its results have not met expectations for several years, with little hope for the future. Does not exist. Equal Ocean has been told.

This is consistent with several reports in recent months. In November, Chinese website Sina Technology reported that Pico was in crisis. According to the report, the sales target of one million Pico 4 headsets set by Pico CEO Zhou was not met. It also claimed that employees knew that some hardware and software were years behind the competition. In February, Pico confirmed it was laying off about 200 people.

Reasons for possible closure of Pico Interactive

A source close to Pico said that Pico was too aggressive to enter an immature market. Pico thinks he can create a market by spending a lot of money. But if you look at the current development of the VR industry, the adoption rate of VR products among home users is still low. Most consumers don’t even know what experience virtual reality can bring.

Virtual reality and augmented reality have never really lived up to the hype. While these technologies still have considerable potential, there are many challenges to their development and advancement in the fabled mass market: headsets are still too bulky and often too uncomfortable for long-term use, but above all, there is a lack of content to engage users. has it. . Additionally, VR and AR must be experienced to understand its benefits or potential, meaning adoption will be slow. All this requires a lot of perseverance in the market.

Bytedance bought Pico Interactive just two years ago for about $600 million. Although the Pico 4 was a significant step up from previous VR headsets and the Meta’s first serious competitor, Pico Interactive has struggled to gain traction in the West. It is still officially available only in East Asia and Europe. At least in Europe, there hasn’t been significant marketing, even though Tiktok was a great marketing platform.

Another reason for the lack of success in the West is the limited independent content. In fact, the Pico 4 is only really useful as a PC VR headset, but that limits the target audience to those with PCs.

Lack of staying power in a difficult market

Bytedance seems to be hoping for quick success, a common phenomenon in the VR industry, where big hype always leads to wildly unrealistic expectations. Apparently, the social media giant’s patience has run out.

This is a bad sign for the VR market itself, especially as other major players are also struggling. Sony hasn’t done anything with its Playstation VR 2 for six months, even though it’s a great VR headset for PS5 gaming.

Right now, it’s the only meta that’s really pushing VR and AR. However, Quest 3’s release has not been without problems: widespread supply issues indicate that the release was not as confident as market expectations. At Connect 2023, Meta CEO Zuckerberg also gave up on the XR issue in just ten minutes.

Competition is especially important in the mixed reality space because the proliferation of immersive technologies requires choice and content. The fewer these options, the slower the growth. If this report is true, then today is a sad day for XR.

We’ve reached out to Pico for comment and will update this article if we receive a statement.