A recent rumor, which alleged that TikTok parent company ByteDance is slated to spin down its XR hardware subsidiary Pico Interactive, is false, the company says.

China-based publication EqualOcean reported late last week that ByteDance is set to “gradually abandon the PICO business.”

The report alleged the person in charge of Pico recently went to Singapore to report to ByteDance founder and CEO Zhang Yiming, maintaining Pico’s performance in the past few years has “not met expectations, and there is no hope for the future.”

Pico 4 | Image courtesy Pico

ByteDance has since disavowed the report, telling China’s Financial Associated Press (Chinese) the news was “untrue,” and that “PICO is operating normally and the company will invest in XR business in the long term.”

Founded in 2015 and later acquired by ByteDance in 2021, Pico Interactive has created a number of standalone VR headsets over the years. Its most recent of which, Pico 4, was released in 2022 as an apparent competitor to Meta’s Quest 2.

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While priced competitively and available for purchase in most of Europe and a number of countries in Asia, the €429 (~$450) Pico 4 still hasn’t made its long-awaited debut in the United States where it would more directly compete with Quest 2 or Meta’s latest, Quest 3. Meanwhile, Pico has made a concerted effort in those regions to bring a majority of Quest’s top apps to Pico 4.

Back in February, Pico began a round of layoffs that at the time were reported to be in the hundreds. Responding to that report, the company maintained it would only be a “small number of colleagues.”

Thanks to Cix Liv for pointing us to the news.

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Scott Hayden
Well before the first modern XR products hit the market, Scott recognized the potential of the technology and set out to understand and document its growth. He has been professionally reporting on the space for nearly a decade as Editor at Road to VR, authoring more than 3,500 articles on the topic. Scott brings that seasoned insight to his reporting from major industry events across the globe.
  • Arno van Wingerde

    Hm…. after the Bloomberg “analist” who told PSVR2 did not sell as planned, we had Ming-Chi Kuo tell that Quest3 pre-orders were disappointing we now have the rumour of the “demised” Pico. You will probably hear this another ten times via YouTube etc. All of these things might be true, but I am rather sceptical of such comments…

  • Christian Schildwaechter

    The (translated) rumor lists valid reasons, while the single sentence Bytedance denial look like a default reaction, not an actual strategy. The reasons are what everybody can guess: the Pico 4 is sold at est. USD ~70 loss in China, local sales in Q2/23 were ~180K units, a 51% total/61% online drop from Q2/22. Globally Meta has 78%-85% market share, Pico 4.5%-8%. VR demand/sales have fallen since the 2022 Metaverse hype, causing layoffs and reduced investments everywhere, with companies shifting money towards AI. Competing with Meta’s cheap hardware neither has nor is expected to generate the expected user number growth.

    ByteDance seems still interested in XR, but not necessarily VR hardware, as it sees itself as a software/content company. Not surprising, everybody (besides Meta) selling VR hardware focuses on either high end or business. Consumer VR/XR is a money pit, only for those with deep pockets and strategic long term strategic. ByteDance could focus on building an XR content platform that works with HMDs from other vendors, like VRChat or Roblox, or Microsoft buying game studios and then selling Game pass subscription not only for Xbox, but everywhere, now even usable with Quest.

    There are good reasons for sticking the hardware, and Pico is very cheap to run compared to USD 10bn/year MRL. Before the acquisition, Pico relied heavily on XR development by Goertek and Qualcomm, and operated on just USD 75mn in VC investment for several years, what MRL burns in three days. USD 70 loss on 180K units is USD 13mn/quarter, nothing that would get Bytedance into financial trouble. Eating the cost/loss only makes sense if they still expect future benefits, but they knew it would take a while when they bought Pico in 2021 for USD ~775mn. Pico 5 rumors say it will be announced in April 2024, once Meta’s six months XR2 Gen 2 exclusivity ends, then we will (possibly) know how they decided.

    • Great analysis. I just hope for more companies to take the MR/XR to the next level, since meta isn’t even really trying, considering they launched their first MR „Pro“ headset a year ago… while launching their „first mainstream MR headset“ without depth API and without any real focus on MR software out of the box.

      • ViRGiN

        Needs developers on board. Valve launched their consumer VR headset with zero VR games.

        • Sven Viking

          They planned to release it together with Alyx, seemingly in 2017 or soon after, with a Valve dev at Steam Dev Days 2016 responding to a Half-Life-related question that “no one in this room will be disappointed” when they reveal their VR game/s “next year”. Then Valve Time struck and they simply didn’t hold Steam Dev Days the following years.

          Once the headset finally did release in 2019 and Alyx still wasn’t ready, they said their “flagship VR game” would ship later the same year. In an abnormally mild case of Valve Time, it only slipped to early the next year.

      • VrSLuT

        Bad analysis. This guy just posts these numbers in hope of someone correcting him about his questionable conclusions. If he keeps it up I’m going to block him.

        • ViRGiN

          He attempts to appear smart, but he is out of touch with reality out there for sure. Blocked me the first time I have provided counter-evidence to his analysis many months ago.

        • Christian Schildwaechter

          I am always glad if someone corrects me. Most of the numbers are taken directly from the Google translation of the Chinese article by EqualOcean, I don’t have a second source for these. The rest is some simple math. Feel free to block me.

    • Sven Viking

      CIX posted this update after the refutation:

      I have further verification that the original post is still somewhat accurate.

      That the VR department is shutting down, to focus on an Apple headset competitor.

      Further clarifying that this meant “they are focusing on mixed reality and not VR/games”. A couple of people in the replies including SadlyItsBradley said they’d heard the same.

      • Christian Schildwaechter

        I wonder how they plan to pull that off. The Pico 5 rumors say that there will be three models, and only the top tier Pro and Max models will get eye and face tracking, sort of a requirement for an AVP competitor. The standard model would be mostly like a Quest 3 with 2560^2 pixel displays.

        Their main problem would be content. So far the Pico 4 library is largely based on ports from Quest. Pico has shifted their development funds to MR, but most developers will continue to target Quest 2 and 3, because most potential buyers own one of these, and only later port to Pico. And Apple pushed the use of existing iPad apps and integration into their FaceTime and iMessage services with literally millions of apps and billions of users, plus a couple of native AVP use cases, to compensate for the (at least initial) lack of software.

        Pico has neither existing a large non XR user/software base, nor will there be a lot of easy to port AVP-like apps on Quest 3 to port, due to lacking/less capable eye and hand tracking. I have no doubt that Pico can come up with the hardware for a cheaper AVP-like clone, but lacking software is a big part of why VR isn’t more successful. The same would apply to MR/AR.

        • Sven Viking

          I definitely agree, although perhaps with everyone relatively lacking in compelling MR applications at this point (as opposed to already having a substantial library built up from past headsets), it could actually be seen as levelling the playing field to a degree? Some of the things currently presented as major uses like virtual screens could be overall easier to imitate than something like Asgard’s Wrath 2 for example.

          • Christian Schildwaechter

            PCVR, PSVR and mobile VR being ignored by AAA could also be seen as leveling the playing field, but ended badly for everyone. And the 2024 field isn’t really leveled:

            – AVP is high price, high fidelity with 4K and matching Apple TV+ 2D/3D streaming, NextVR NBA and concert VR streaming, iOS apps plus virtual Mac screens. They rely the least on MR/XR apps, enabling mostly existing use cases.
            – Quest 3 has the lowest price/resolution and no eye tracking. Meta has to leverage VR games, using MR mostly to improve comfort and accessibility. They try to push their networks, but ratings for “WhatsApp for Quest” are even worse than for “Horizon Worlds”. VR will be the main use.
            – Pico 5 ends in the middle, with 2.5K and 4K models, the only player in 1.4bn people China, where many HMDs are bought as TV substitutes. Bytedance might take a mixed approach, keeping VR games, but selling Pico 5 as a main media device, which for many Chinese is their phone. They could offer flat Android apps without Google’s Play Store, making “enhanced smartphone” their MR use case.

            Meta, Apple and Pico need to find compelling reasons for MR to reach beyond VR users. If they can’t, it will again end badly for all, as investment in XR would drop even further.

        • shadow9d9

          A single sheet of fake specs is not even at the level of rumor. It is amazing just how little effort is required to make people believe anything they read on the internet.

          • ViRGiN

            they believe it, cause that’s exactly what they want. 4k per eye with displayport. everything else is irrelevant.
            i love their suffering.

    • Arno van Wingerde

      The rumor is just that: a single idiot analist with some quote and a few reasons that are reasonable, only if you believe that Bytedance is not really committed to trying to get into the market. I am actually impressed with their modest losses at this stage. We have heart the same about PSVR2 (Bloomberg) and Quest3 (Kuo: sales falling short of his own predictions). Of course any party may pull out of any market at any time for any reason: listening to possibilities may just get the “analyst” more attention and serves a clickbait for sites like this…

  • What an absolute fracking JOKE …. lol
    All the anti-Azuck hatred just could not WAIT to shit all over Quest and lookat this Pico mess as “The VR Savior From Above” ….

    That there was just a eumor is immaterial.
    The point is that there even WAS a rumor in the first place.
    I’m in total adoration with my Quest 3: much moreso than Quest 2.
    Sadly It’s Bradley’s most recent vid, 18OCT, he walks around Disneyworld
    with a Quest 3 absolutely singing the praises of it’s MR prowess ….
    And he brings-up a great point: Quest 3 is a Android-driven spatial computer.
    So there should be in the Shoppe an “Droid Apps” section.
    Can you imagine pairing a 8-BitDo wireless controller in a SNES emulator …??
    Oh man, the [Nova] prospect of playing “STAR TREK: Starfleet Academy” on a virtual 100-incher ….

    • Cl

      Tiktok just as bad as Facebook. That’s why everyone hopes valve comes out with something since all they want from you is to buy stuff on steam.

      • ViRGiN

        “everyone hopes”. Speak for yourself. It’s time for global reset and for new hegemonic entity to raise up. Valve is bigger cancer than Tiktok.

    • Garhert

      True, the Quest app store and (probably) the support are better. But the Pico 4 is still a good HMD. Quest 3 lenses and picture quality is only slightly better, would have expected more. And the menu navigation is way better on Pico 4. And as far as I know you can still not use a USB stick on a Quest HMD, right? And the passthrough video quality is quite similar on both. For me, aside from the app store, the new SoC and maybe MR, the Quest 3 is maybe a Pico 4.2 at best. I am keeping the Quest 3 simply because of the exclusives. But I cannot enjoy the Quest 3 until I get a different strap. Sorry, it is just that uncomfortable compared to the Pico 4, and I’m not willing to spend another $150 for the elite strap.

      Don’t get me wrong, I’m neither a fan of Meta nor Bytedance. But you should at least try both headsets before making a judgment.

    • Arno van Wingerde

      Eh… you have made more coherent posts…
      Pico has worse software and game library than Quest and probably worse customer service. But it is a device that is better than Quest2, contains the “elite strap” and will likely be superseded by the pico5, where the pro version might be an Apple Vision Pro wannabe for a fraction of the price. I will stick to Quest for now, but I see no reason to downplay other parties.

    • shadow9d9

      It is amazing that people worship at the throne of nobodies on the internet, doing stupid shit. He walked around Disney as a stunt to attract the fools on the internet to give more clicks. The guy is ethically bankrupt and paid for someone to break their legal agreement to leak info to him so he could sell it on his channel.

      • Nobodies …??
        He’s won global VR championships ….
        CNN regularly quotes him ….
        He was a “VR Correspondant” for a Florida TV station.
        This “nobody” has, and will continue to,
        done a thousand more things than you and I have.
        And I’d hardly call fandom “adoration”.
        Get a grip.

        • shadow9d9

          A florida tv station labelled him a correspondent. AHAAHAHAHA. I can’t think of a more meaningless metric. They could have put “youtube nobody” too, but that likely would seem less legit, so they made up a name.

          The guy was caught being a scumbag and paying someone to do something illegal. Supporting him reveals quite a bit about you and your values.

          • GunnyNinja

            If he was a nobaody, you wouldn’t be talking about him.

  • ViRGiN

    Yeah, even valve “confirmed” being interested in vr and we haven’t seen anything for years.

    Official statements are the last valuable ones.

    Pico has failed. Competition is great.

    • Tanix Tx3

      I feel getting the pico after my quest wrecked was a good choice at the time.
      This way I can just wait for the real next gen pcvr hmd to appear (doesnt matter who produce it, but has to be inclusive working eye tracking).
      No need to spend extra money on the current quest just to update the soc, To take advantage of these new soc for pcvr you better own an new gpu too. Otherwise just skip to the next iteration.

      • shadow9d9

        Nothing uses eye tracking though. Not even vrchat has it build in. You need a mod.

        • Tanix Tx3

          What you are saying is actually wrong in so many ways, how should I even start? Not only psvr games like nms proofed the combination of eye tracking and foveated rendering can be very valuable, also there are mods to use this combination in openxr pc games.
          Ofcourse you wont find any pcvr game implementing this, since 99% of the pcvr headset, dont implement eyetracking. Time to change that.

          • ViRGiN

            ok

        • XRC

          Using Tobii eye tracking with dynamic foveated rendering yesterday, working great in a number of PCVR titles I regularly play. Seeing a performance uplift of around 20%, which is very useful.

        • Tanix Tx3

          Couldnt write all my thought, was running out of time yesterday.

          Especially vrchat is not a good example for this kind of eyetracking(foveated rendering), since it dont need it even on a mobile soc. It takes more advantage out of face/eye tracking to visualize them in vr.

          I imagine that pcvr will get access to a lot double and tripple A games till next year, by release of the ue injector. Its very likely these games will run with all kind of mods. If the average gpu is something like 3080/4070, I imagine a good advantage for headsets with foveated rendering. This could establish it for pcvr.
          I get this from games like GTFO where my hardware struggle a lot to provide decent fps. An universal vr mod might deliver even worse results.

  • Andrew Jakobs

    We will see, as other sources said the Pico told them they have exciting news at AWE in Vienna, which starts tomorrow.

    • Andrew Jakobs

      Well AWE 2023 vienna has past (24/25oct) but no news appearantly. At least not publicly or nobody picked up on any news from AWE.

  • Sven Viking

    ViRGIN just succeeded in luring me into engaging with his Valve obsession this time :). (Also one of the times I don’t disagree with what he’s saying.)

  • Lucidfeuer

    Misinformation like that should be illegal anti-astroturfing

    • shadow9d9

      It is likely correct. PR denials are not fact.

  • silvaring

    How do you know this? Honestly, how are guys like you and Christian so in the know