The VR industry needs companies with resilience and a long-term vision. According to recent reports, Pico’s parent company Bytedance is not one of them.
Pico set out to challenge Meta’s VR monopoly. Now the company is teetering and crumbling, to the dismay of studios, fans, and the VR industry as a whole. What happened?
TikTok owner Bytedance bought the Chinese headset manufacturer in 2021, and the Pico 4 was released to the Western market in the fall of 2022. It was the first standalone VR headset to challenge Meta Quest 2 in terms of technology and price. The press welcomed the arrival of a competitor. However, the device was unable to take significant market share from Meta, in part because it was never released in the US.
Rumors of a drastic restructuring of the company have been circulating for a few weeks now. There has been talk of major layoffs, cancelled software projects, and a strategic pivot that will see Pico’s product strategy shift from Meta’s to Apple’s approach.
Pico itself has issued a statement confirming that it will continue to invest in the future of its platform. However, there have been no concrete statements as to what this might look like. Will there be a successor to Pico 4, will the company continue to fund VR content and to what extent? We do not know.
Pico stumbles over its own ambitions
The reports and Pico’s sparse communication raise doubts about whether VR studios or consumers should continue to invest in the platform.
Pico had launched a single product for Western consumers and is already showing signs of weakness after moderate success. Didn’t the executives realize that it would take many years and billions of dollars just to keep up with Meta? Even worse: Pico now apparently wants to go after Apple, even though it hasn’t even touched Meta.
After the release of last year’s Pico 4, I listed five reasons why I wasn’t (yet) ready to switch to Pico’s ecosystem. One of the reasons was doubts about the long-term investment that Pico and its parent company Bytedance were willing to make.
“Virtual reality will be a loss-making business for many years to come. Companies and innovators need a lot of stamina. Especially when the competitor is called Meta and has a significant head start. If Bytedance gives up prematurely and scales back its investments, Pico’s ecosystem could collapse before it has even taken off,” I wrote back then.
The VR industry is brutal
I have nothing against Pico. My doubts are justified and are also directed at other companies that will enter the market in the coming years. For example, Samsung and Google, who have tried their hand at VR in the past, only to abandon the platform after failing to find quick success. All companies are driven by profit, and virtual and augmented reality is not something that promises an immediate return of investment. VR and AR are a risky bet that must be taken for the long haul.
The path of VR history is littered with dead platforms, and anyone who has ever been a part of one will ask themselves twice if it is worth the risk of re-entering. For this reason, companies that only dabble in VR are hurting the industry, developers and consumers.
Valve got a bloody nose, Sony as well, and I think Apple is about to be the next. Valve VR’s efforts seemingly stopped since the release of Half-Life: Alyx, Sony admits that Playstation VR 2 isn’t its core proposition, and I’m waiting to see if Apple is still singing the song of spatial computing in three years from now.
Aside from Meta, I think Apple is the company most likely to take the long view and keep its promises, given the stunning engineering effort that the Vision Pro represents. But I could be wrong.