![]() The problems are manifold: high price entry barriers, subpar user experiences, the lack of quality content, and the absence of “killer apps.” ![]() “After playing it for a few times, it was left on the shelf collecting dust,” noted one Pico user. But consumers are still not convinced that it’s something essential to have in their lives. To be sure, the design and performance of the PICO 4, priced at 2,500 yuan ($343), offers great value. With Pico’s 59% market share, that means Pico may have sold around 194,000 units during the first six months of 2023.Ĭonsumers Find VR Headsets Aren’t Must-Haves Sales dropped further in 2023, when the total AR/VR headsets shipments in the entire Chinese market slumped to only 328,000 units. The total sales for 2022 were estimated to be around 700,000 units, well below their target. However, despite leveraging its extensive short video platforms for marketing and enlisting numerous celebrities for promotions, Pico’s sales fell short. The company set an ambitious target of selling 1 million units for 2022, doubling on Pico’s half million in total sales in 2021. But things didn’t go according to plan.īyteDance had hoped that an upgraded VR headset, a high-cost performance PICO 4, could help it establish a dominant market position, similar to what Meta’s Quest headset was able to achieve. In 2021, Facebook rebranded as Meta, Disney officially established a metaverse division, and major Chinese companies all formed teams related to XR and the metaverse. This hefty investment reflects the company’s vision of VR as a key player in the future of technology at a time when the metaverse was the hottest concept out there. In total, ByteDance’s expenditure on its VR ambitions is estimated to be around 20 billion yuan ($2.74 billion). Reports suggest that the company injected an additional 10 billion yuan in the subsequent year, aiming to boost the sales of Pico headsets. ![]() This acquisition price significantly exceeded the market consensus, which valued Pico at around 2-3 billion yuan at that time.įollowing the acquisition, ByteDance kept up its pace of investment. In a strategic move that underscored its obligation to VR, ByteDance acquired Pico in August 2021 for a staggering 9 billion yuan ($1.3 billion). The Beijing-based company is seeking to balance the need for innovation against the realities of a challenging market.īyteDance is the most committed Chinese investor in the virtual reality (VR) sector. The company aims to sustain its research endeavors at a minimal cost, while awaiting a potential resurgence in the VR market at a later date. ByteDance, in response to the uncertainty in the sector, has chosen a strategic path of conservation.
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