TikTok Owner ByteDance Acquires VR Hardware Startup

ByteDance Acquires VR Headset Maker Pico

ByteDance, the parent organization of TikTok, appears to be actively seeking opportunities to surpass Facebook in various areas. Following TikTok’s success in becoming the most downloaded social media application globally, ByteDance is now targeting Facebook’s ambitious ventures by acquiring Pico, a virtual reality headset manufacturer.

Deal Confirmation and Background

The acquisition, initially reported by Bloomberg last week, was officially confirmed by ByteDance on Monday. The financial details of the transaction were not publicly disclosed. Pico had previously secured approximately $62 million in venture capital funding from Chinese investors, including a $37 million Series B round in March.

Similar to Oculus, Pico develops both the hardware and software components for its VR systems. However, a key differentiator is Pico’s significant market presence within China.

Pico’s Market Position

While perhaps not as widely recognized as Oculus or HTC, Pico has established itself as a leading VR hardware provider. The company serves both individual consumers in China and business clients in Western markets.

The integration of Pico into ByteDance now places two major virtual reality brands under the ownership of social media giants.

Consumer Preference and Data Concerns

Interestingly, many North American consumers have reportedly chosen Pico headsets over Oculus hardware, driven by concerns regarding Facebook’s data practices and advertising-focused business model. There is a fear that Oculus will increasingly integrate these elements.

The VR Market Landscape

The virtual reality market has experienced a relatively slow initial growth phase. Facebook, however, has been a pivotal force, investing substantial capital into developing the ecosystem, despite limited interest from traditional investors in recent years.

Future Implications

Without complete knowledge of the acquisition terms, it remains uncertain whether this signifies a revitalization of the VR market or a contraction. It seems probable that ByteDance intends to cultivate a consumer VR brand, closely emulating Facebook’s approach.

ByteDance will likely learn from Facebook’s experiences and leverage their contributions to the virtual reality ecosystem. A crucial decision for ByteDance will be determining whether to primarily focus on the consumer market in China or also pursue enterprise clients in the United States.