Source: AI Whale Selection

Image Source: Generated by Wujie AI

After Apple released Vision Pro, the XR industry did not usher in a spring, and the once radical Pico has come to the brink of abandonment.

On November 7, Pico, a business under ByteDance, held an all-staff meeting. At the meeting, Pico President Zhou Hongwei announced that Pico will undergo large-scale layoffs in the future, making significant personnel adjustments to Pico's market, gaming, video, live streaming, and other teams. The Pico mobile OS team will be integrated into ByteDance's product development and engineering architecture, retaining only a small part of the hardware team. An internal employee mentioned that this round of layoffs is expected to account for 80%, "reducing the workforce from 2000 to a few hundred, retaining only basic capabilities."

Earlier on October 20, there were rumors of major layoffs at Pico, but no official announcement was made internally at that time. A Pico spokesperson responded to the media, stating that the company will maintain normal product operations and continue to strengthen investment in product technology. The all-staff meeting this time clarified the reality of a major business retreat.

In response, AI Whale Selection sought confirmation from ByteDance, to which they stated: the company will strengthen long-term key technological research and development in the XR field, such as optics and displays. The company has "patience and a long-term view" for the XR business, and Pico will operate as usual.

Several Projects in Incubation, Holding onto Hope

In fact, this is not the first time Pico has laid off employees. Earlier this year, Pico laid off many sales teams. Despite external rumors, ByteDance has come out to refute them. Internally, there is also confidence, as there are still several projects in development.

However, in early October, former Douyin veteran Ren Lifeng, who supported Pico's content development, was reported to have left. Internal sources revealed that Wu Zuomin took over as the vice president of Pico and the overall head of the content and culture department. Some executives who originally transferred from Douyin to Pico with Ren Lifeng, such as the former head of Douyin variety shows Song Binghua, Pico's video live streaming head Liu Yu, and Pico's content product head, have also returned to Douyin or resigned.

Things started to change, but some employees still believe that they can persevere from a project perspective.

Pico is expected to release fisheye lenses by the end of the year, a mobile VR live streaming device. Similar products are priced at around 300 yuan on Douyin, enabling VR live streaming. In addition, VR live streaming is a development highlight this year. Currently, Pico's games and applications are not rich enough, so Pico is spending a lot of money to let everyone experience VR live streaming, aiming to educate the market.

At the same time, next year's XR product release will be a leap for Pico from the VR field. From Apple's Vision Pro, XR is the real opportunity for the future.

However, after the sudden action on November 7, internally, it feels like a high-level strategic meeting was held, and Zhang Yiming suddenly decided not to invest heavily in the XR business.

Burning Money in VR, But No Arrival

ByteDance's Pico has made significant investments in the virtual reality (VR) field. Previously, it was reported that ByteDance spent 9 billion yuan to acquire Pico.

Subsequently, ByteDance also made heavy investments in research and development, marketing, and operations. Pico's level of spending is unique in the industry. For example, a former Pico employee who left the company stated that ByteDance's investment in Pico has reached around 20 billion yuan, equivalent to a loss of 1000-3000 yuan for every Pico device sold.

Behind the massive spending, Pico's sales have also increased. According to public information, ByteDance's acquisition of Pico did increase its market share. Data shows that in the second quarter of 2022, Pico's market share in the domestic VR market reached 70%, and its global market share increased from 0.99% in the first quarter of 2021 to 11.16% in the second quarter of 2022. In addition, in the second quarter of 2022, Pico's shipments reached 260,000 units, nearly 8 times the previous year.

However, the entire industry's downturn is inevitable. According to IDC data, in the first half of 2023, China's AR/VR headsets shipped 328,000 units, meaning Pico has propped up the absolute sales volume of VR devices in China through subsidies.

Following Tencent's abandonment of the XR business unit, ByteDance's VR business is also on the verge of abandonment.

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