Relevant sources revealed to EuqalOcean that ByteDance will gradually abandon the PICO VR.
According to the latest news on October 20, relevant sources revealed to EuqalOcean that the person in charge of PICO recently went to Singapore to report to Zhang Yiming, the founder of ByteDance, and the feedback he received was that ByteDance will gradually abandon the PICO VR; the reason is that the hardware field of PICO is not what ByteDance is good at. The company's performance in the past few years has not met expectations, and there is no hope for the future.
Since the beginning of this year, the popularity of the Metaverse has cooled down rapidly. ByteDance’s PICO and Tencent’s newly established XR (extended reality) business line last year have reported layoffs. Not only that, Meta, which started the metaverse craze, also announced layoffs. With the popularity of Chatgpt, capital, and public attention have gradually turned to the field of AI. The VR industry, which has lost the popularity of the Metaverse, will inevitably enter a period of distress. As large manufacturers invest a lot of money, personnel, energy, etc. but have no effect, ByteDance’s decision to gradually abandon the PICO business is understandable.
Looking back on its history, PICO was established in March 2015, dedicated to VR research and development, virtual reality content and application creation, and releasing virtual reality software and hardware products; in August 2021, ByteDance acquired PICO for 9 billion yuan and was merged into Byte VR business line. Since then, ByteDance has begun spending heavily to build PICO’s brand and seize market share. In September 2022, PICO launched the all-in-one VR product PICO 4. This is also the first product launched after the brand merged with ByteDance. The domestic price starts at 2,499 yuan. However, it is estimated that the cost of PICO is around 3,000 yuan. Therefore, ByteDance’s low-price strategy to seize market share and increase sales also paved the way for its subsequent decline.
From 2021 to 2022, the top five manufacturers in global VR shipments are Meta, PICO, Dapeng VR, HTC, and iQiyi. At the same time, after two years of fierce price wars, the oligopoly effect has gradually intensified—Meta’s market share increased from 78% to 85%, and PICO’s market share increased from 4.5% to 8%. The increase in PICO's market share has also improved PICO's overseas competitiveness and made full preparations for future overseas expansion. But as we enter 2023, the industry returns to rationality. The weak demand side has led to the hoarding of goods by a large number of VR manufacturers and channel vendors. Therefore, manufacturers have also slowed down their investment in VR hardware, but companies like ByteDance have directly shut down VR hardware. There are still very few businesses.
We don’t know the exact sales volume of PICO 4. Looking at the overall VR market this year, according to EqualOcean estimates, in the second quarter of 2023, the omni-channel sales of China's VR/AR market were 186,000 units, a year-on-year decrease of 51.4%. At the same time, VR online sales dropped severely, with a year-on-year drop of as much as 61%. This means that consumer demand for VR equipment is declining. As the leader in the VR industry, PICO’s sales are self-evident.
Zhou Hongwei, the head of PICO, once publicly stated that PICO needs longer-term investment. The sales volume of each generation is just a process. His greater significance is that sales and user data of each generation of products need to be used to verify the progress of technology and experience. But for now, it seems that continued heavy investment without corresponding output has worn away ByteDance's patience. The gradual shutdown of PICO also means that it has temporarily stopped its exploration of the Metaverse.