ByteDance, the global technology giant best known as the owner of the wildly popular short-form video platform TikTok, has made a significant strategic move by acquiring Pico, a virtual reality (VR) startup. This acquisition signals ByteDance’s serious intent to expand its business interests beyond its core social media offerings and actively participate in the burgeoning metaverse landscape. The move positions ByteDance as a potential competitor to established players like Meta (formerly Facebook) and emerging contenders such as Apple in the rapidly evolving VR market.
While ByteDance, headquartered in Beijing, has not officially disclosed the financial terms of the acquisition, the company emphasized the strategic importance of Pico’s technological capabilities and expertise. In a statement to CNBC, ByteDance highlighted Pico’s "comprehensive suite of software and hardware technologies," along with the "talent and deep expertise of the team," as key assets that will bolster ByteDance’s entry into the VR arena and support its long-term investment in this nascent but promising technological domain.
Pico’s position in the VR market is not to be underestimated. The company held the third-largest share of the global VR headset market in the first quarter of 2021, demonstrating its established presence and competitive edge in the hardware space. This acquisition is reminiscent of Facebook’s bold move in 2014 when it acquired Oculus, a VR pioneer, for a substantial sum comprising $400 million in cash and 23.1 million Facebook shares. At the time, Facebook recognized that VR applications were primarily focused on gaming, but the company articulated its vision to extend VR’s reach "to new verticals, including communications, media and entertainment, education, and other areas."
Mark Zuckerberg, Facebook’s founder and CEO, famously declared, "Mobile is the platform of today, and now we’re also getting ready for the platforms of tomorrow." He envisioned Oculus as having the potential to "create the most social platform ever, and change the way we work, play, and communicate." Zuckerberg’s vision underscored the transformative potential of VR beyond gaming, highlighting its potential to revolutionize various aspects of human interaction and experience.
ByteDance’s acquisition of Pico suggests a similar strategic outlook. By investing in VR technology and talent, ByteDance is positioning itself to capitalize on the potential of the metaverse, a persistent, shared virtual world that blends physical and digital realities. The metaverse is envisioned as a future iteration of the internet, characterized by immersive experiences, social interaction, and economic opportunities within virtual environments.
The acquisition could set the stage for a future competitive battle between ByteDance’s Pico and Meta’s Oculus VR division. Meta has been heavily investing in VR and augmented reality (AR) technologies, positioning itself as a leader in the metaverse space. However, ByteDance’s entry into the market with Pico could disrupt Meta’s dominance and create a more dynamic and competitive landscape.
Furthermore, ByteDance may also encounter competition from Apple, which acquired the VR company NextVR last year. Apple’s entry into the VR/AR space is highly anticipated, given its track record of innovation and its loyal customer base. The company is rumored to be developing its own VR/AR headset, which could potentially challenge the offerings from Meta and ByteDance.
The timing of ByteDance’s acquisition of Pico coincides with TikTok’s recent announcement of testing a new augmented reality studio. This studio would empower TikTok creators with tools to experiment with new in-app features, including lenses and visual effects. The integration of AR capabilities into TikTok’s existing platform further underscores ByteDance’s commitment to immersive and interactive experiences.
A ByteDance spokesperson conveyed the company’s optimism regarding the future of VR and its alignment with the company’s overall mission. The spokesperson, however, did not provide further details regarding the acquisition’s specific implications or future plans.
In conclusion, ByteDance’s acquisition of Pico represents a significant strategic move that positions the company as a major player in the burgeoning VR and metaverse landscape. By acquiring Pico’s technology and expertise, ByteDance is signaling its intent to diversify its business holdings and compete with established players like Meta and emerging contenders like Apple. The acquisition underscores the growing importance of VR and AR technologies as key components of the future of computing and human interaction. As the metaverse continues to evolve, ByteDance’s investment in Pico could prove to be a pivotal step in shaping the future of virtual experiences and the next generation of digital platforms. The battle for metaverse dominance is heating up, and ByteDance’s entry with Pico promises to inject further innovation and competition into the market.
