According to a Thursday report by Chinese media outlet LatePost, three key individuals at ByteDance will soon be transferred to its virtual reality (VR) brand Pico, including Ren Lifeng, Head of Product at Xigua Video, Song Binghua, Head of the Douyin Variety Division, and Wu Zuomin, Director of the Douyin Entertainment Division. The moves indicate that ByteDance, which is also the parent company of Douyin’s international counterpart TikTok, will start to increase its investment in VR content.
According to several sources, about 500,000 Pico products were sold in 2021, while the sales target of the team in 2022 is about one million units. In contrast, Oculus Quest 2, an all-in-one VR product launched by Meta (formerly Facebook) in 2020, has sold more than 10 million units so far.
Pico is a all-in-one VR system developer established in 2015. Founder Zhou Hongwei previously worked at GoerTek, a leading enterprise in China’s electroacoustic industry, for more than 10 years. In September 2021, Pico was acquired by ByteDance for several billion yuan. At present, the brand’s business head is still Zhou, and the total number of employees has increased from 200 in September 2021 to more than 300. It is also the business that ByteDance will soon carry out large-scale recruitment expansion besides Lark Suite, an enterprise collaboration platform, and the e-commerce business.
According to individuals close to Pico, before its acquisition, the firm focused on hardware and technology development with limited resources, and there were obvious deficiencies in its marketing and content ecosystem. At present, it has attracted about 500 content suppliers, while Oculus has more than 10 times that of Pico, including world-renowned intellectual property. Pico then got more support from ByteDance after the acquisition, including significant market exposure, and enough funds to solve the problems of high content adaptation costs and subsidies for content producers. As the source unveiled, “now the growth rate of the brand’s content has doubled.”
According to an IDC report on the Chinese market, Pico’s domestic market share exceeded 50% in 2021, ranking first, followed by DPVR, iQiyi VR and HTC VIVE. ByteDance tries to explore the next generation of entertainment and content industry with VR, but the domestic VR market and hardware still have a long way to go mature. This requires huge investments in the early stages. Even Meta can hardly guarantee positive cash flow in this business, while its Meta Reality Labs division has seen net losses of over $20 billion for three consecutive years.