Pico VR Headsets Face Challenges as Company Implements Layoffs
Pico VR Headsets Struggle to Gain Traction in China
When Pico, the virtual reality headset manufacturer owned by ByteDance, launched its Oculus Quest competitor in China last year, it had high hopes for success. With its lightweight design and affordable price tag, Pico’s VR headset seemed poised to penetrate a market that was out of reach for Meta. However, the reality has been quite different for Pico, as the company’s sales have been sluggish, leading to a recent wave of layoffs.
Pico Announces Major Restructuring and Layoffs
Pico recently held an internal meeting to discuss a major reorganization. According to sources familiar with the matter, the company has laid off “a few hundred” employees, resulting in a headcount of “under 2,000.” Despite the layoffs, Pico still boasts a significantly larger workforce compared to its acquisition by TikTok’s parent company two years ago. This shakeup suggests that Pico is aiming to cut costs and pursue more sustainable growth following a period of aggressive expansion.
Pico Focuses on Hardware and Core Technologies
In response to the restructuring, a Pico spokesperson stated that the company is shifting its focus towards “hardware and core technologies.” The spokesperson emphasized the company’s commitment to regularly assessing its business needs and making necessary adjustments.
Challenges in China’s VR Market
Pico’s struggles come at a time when China’s VR market is experiencing a decline. According to market research firm Counterpoint, VR shipments in China decreased by 56% year-over-year in the first half of 2023, ending a two-year growth streak. The country’s weakening economy and a lack of high-quality VR content contribute to this downturn.
Tightened Regulations and Limited Consumer Sales
Pico faces additional challenges due to regulatory barriers and limited consumer sales. The youth gaming segment, which represents a significant portion of the consumer VR market, is heavily regulated in China, with strict content vetting processes and capped screen time. These regulations have complicated Pico’s U.S. launch as well. Despite having strong fundamentals, Pico has been unable to capitalize on the market due to unfavorable circumstances.
Pico’s Path Forward
Experts believe that Pico’s decision to focus on improving its hardware while weathering the current market challenges is a strategical move. By prioritizing the business-to-business (B2B) market and keeping options open for future consumer market endeavors, Pico aims to maintain progress in the industry.
In conclusion, Pico’s VR headsets encountered difficulties in gaining traction in China’s market, leading to a recent round of layoffs. The company hopes to overcome these challenges by refocusing on hardware and core technologies while exploring opportunities in the B2B sector. Although the road ahead may be challenging, Pico remains optimistic about its prospects and aims to position itself for future success in the consumer VR market.