TikTok parent company ByteDance seems to be looking to one-up Facebook anywhere it can. After taking over the mantle of most-downloaded social media app in the world with TikTok, ByteDance is coming for Facebook's moonshot, buying up its own virtual reality headset maker called Pico.
The deal first reported on by Bloomberg last week was confirmed by the company on Monday, though ByteDance didn't disclose a price tag for the deal. Pico had raised some $62 million in venture funding from Chinese firms, including a $37 million Series B in March. Like Oculus, they create both hardware and software for their VR devices. Unlike Oculus, they have a substantial presence in China. Pico may not hold the same name recognition as Oculus or HTC, but the company is a top VR hardware maker, selling to consumer audiences in China and enterprise customers in the Western world.
With Pico finding its home now at ByteDance, two of the world's largest virtual reality brands now reside inside social media companies. Ironically, many of the company's North American customers I've chatted with over the years seem to have at least partially opted for Pico headsets over Oculus hardware due to general weariness of Facebook's data and ads-dependent business models, which they fear Oculus will eventually become a larger part of.
It's no secret that the virtual reality market has been slow out of the gate, but Facebook has blazed the trail for the technology, dumping billions of dollars into an ecosystem that traditional investors have largely seemed uninterested in, in recent years.
Without knowing broad terms of the deal (I'm asking around), it's hard to determine whether this is a moment of resurgence for VR or another sign of a contracting market. What seems most likely to me is that ByteDance is indeed interested in building out a consumer VR brand and is aiming to follow in Facebook's footsteps closely while learning from their missteps and capitalizing on their contributions to the ecosystem. Whether the company solely focuses on the consumer markets in China or loosely pursues enterprise clients stateside as well is a big question ByteDance will have to address.