ByteDance, the parent company of popular social media platform TikTok, has reportedly made the decision to cancel its next virtual reality (VR) headset. This move comes as a surprise and marks a significant retreat from the VR market, where ByteDance has been competing with industry giants like Meta Platforms. Sources familiar with the situation have revealed that ByteDance’s subsidiary, Pico, was working on the development of the Pico 5 VR headset. However, the company has decided to abandon this project, signalling a major shift in its VR strategy.
The cancellation of the Pico 5 VR headset is said to be a result of disappointing sales of the previous model, the Pico 4. ByteDance’s CEO, Zhou Hongwei, acknowledged that the VR industry is still in its early stages and that the company’s previous growth estimates were overly optimistic. The actual growth of the VR market did not meet their expectations, leading to the decision to cancel the next-generation headset.
As a consequence of this decision, ByteDance plans to lay off employees from its sales, videos, and platform operation teams. While the exact number of job cuts has not been disclosed, reports suggest that “hundreds” of employees may be affected. The restructuring will also involve a shift in focus for Pico’s hardware and software teams. The hardware team will concentrate on developing new technology, while the software team may be downsized or merged into ByteDance’s broader product development team.
ByteDance’s Future Plans
ByteDance has refuted rumours of shutting down Pico and clarified that the company will continue to invest in the extended reality (XR) business, which includes VR and other immersive technologies. Despite cancelling the next VR headset, ByteDance remains committed to the XR industry in the long term.
RTM Watch’s Take
The cancellation of ByteDance’s next VR headset reflects the challenges and uncertainties faced by companies in the VR market. While ByteDance has been a major player in the social media space with TikTok, its foray into VR has proven to be more challenging than anticipated. This decision highlights the importance of market research and realistic growth projections in emerging industries like VR. However, ByteDance’s commitment to the XR business indicates that the company still sees potential in immersive technologies and aims to explore other avenues within the XR space.
