ByteDance’s Oculus rival Pico has laid off hundreds of people and halted aggressive expansion TechCrunch

When Pico launched its Oculus Quest competitor in China last year, it did so with great optimism. The lightweight (295g) and affordable ($420) virtual reality headset released by the ByteDance-owned manufacturer was expected to tap into a market inaccessible to Meta.

Chance was against Pico. Sales have been slow, and this week Pico, which was bought by parent TikTok two years ago, began a new round of layoffs.

This week, Pico held an internal meeting and announced a major reorganization. A person familiar with the matter told TechCrunch that “several hundred” employees left, leaving Pico with “under 2,000” people.

Even after the layoff, Pico, as it stands today, is significantly more than the 200-300 team at the time of purchase. The change signals that Pico is regrouping to cut costs and pursue more sustainable growth after a period of aggressive expansion.

In a statement, a Pico spokesperson said the unit is being restructured to focus more on “hardware and core technologies.”

“We frequently assess our business needs and make adjustments to strengthen our organization and better align our teams with company goals,” the spokesperson said.

At a time when China’s post-Covid economic recovery misses expectations, frequent assessments are indeed needed. According to market research firm Counterpoint, China’s VR shipments in the first half of 2023 fell by 56% year-on-year.

The slowdown “marks the end of China’s VR markets’ two-year growth streak between 2020-2022 and a return to stagnation,” the report said.

This decrease was due to several factors. First, Chinese consumers are spending less amid a weak economy. To overcome the weak economic recovery, Pico has reduced its marketing investments, leading to a smaller shipping target, according to Counterpoint’s analysis.

Another contributing factor is the lack of high-quality VR content needed for mass adoption. Virtual reality technology is still in the early stages of development, and the hardware is awaiting significant improvements. At a time when businesses are tightening their belts, it makes sense for Pico to focus on improving its hardware rather than investing heavily in content creation.

Mixed show host Gavin Newton-Tanzer suggested that in China, youth gaming — arguably one of VR’s biggest consumer categories — is heavily regulated, with complex content review processes and legally limited display time. It adds to the sales pressure in China. AWE Asia Reality Conference. Newton-Tanzer said regulatory hurdles also “complicated” pico launches in the United States.

“Pico has strong fundamentals, but luck and timing conspired against them, so some degree of restructuring was inevitable due to weak consumer sales,” he added.

“While I strongly believe consumer VR will take off in China at some point, it won’t happen in 2023. In this context, it makes sense for Pico to spend time and focus on hardware: they will continue to improve in this area. B2B market while keeping the options open for another implementation in the consumer market in the future.

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