ByteDance is re-evaluating the strategic positioning of its virtual reality (VR) business unit, PICO.
On October 23, reporters from The Paper learned exclusively from several informed sources that many core business leaders at PICO have recently resigned or been transferred. In the first half of this year, PICO’s vice president Ren Lifen was effectively in a state of resignation, no longer in charge of PICO’s business management, but still holding a position within the company.
The Paper’s reporters confirmed that Ren Lifen’s current status within ByteDance’s internal system, Feishu, is “on leave”. According to sources, Ren Lifen will formally resign at the end of this year.
Currently, PICO’s internal business units include marketing, hardware, OS product, content & culture, and social center. Many employees in these units have either been laid off or resigned voluntarily.
According to internal employees, PICO previously had over 2,000 staff, with about 2/3 of the marketing department employees resigning. The technical department has a slightly lower attrition rate, and the overall current staff is nearly half of its peak number.
Later that day, a PICO official replied to The Paper, stating that the company would maintain regular operations and continue to invest in product technology.
Several Executives Leave in Succession
The Paper exclusively learned that PICO’s president, Zhou Hongwei, currently directly oversees the hardware department. The head of the OS product department is Ma Jiesi, who previously led Xiaomi’s VR department. Public reports from May last year stated that after joining PICO, Ma Jiesi was in charge of the “Light World” product in the social center. However, informed sources revealed that there has been a significant staff reduction in the social center, and investment in “Light World” has been significantly reduced. Ma Jiesi is now head of the OS product department, but his status in Feishu still lists him as the head of the social center.
The hardest-hit by the resignations is PICO’s content and culture department, headed by Ren Lifen. As one of the founding members of the TikTok team, Ren Lifen was previously the product manager and was regarded by outsiders as one of the TikTok “elders”.
After Ren Lifen transferred to PICO, many core members of TikTok, including TikTok’s variety show head Song Binghua and TikTok’s entertainment director Wu Zuomin, followed suit.
Reporters learned that after Ren Lifen was effectively in a state of resignation for an extended period, the original head of TikTok’s variety show, Song Binghua, returned to TikTok’s variety and entertainment department last year. Wu Zuomin is currently still in charge of video business at PICO, but this might change in the future. Between September and October this year, Liu Yu, the head of PICO’s live video who was highly regarded by Ren Lifen, has resigned. Moreover, the head of content products under Ren Lifen has also left PICO and returned to TikTok.
According to The Paper’s research, this means that within two years of ByteDance announcing the acquisition of PICO, a significant number of core management from TikTok have left PICO.
Public records show that Zhou Hongwei founded PICO in 2015. He graduated from Harbin Institute of Technology and worked at the electronics manufacturing giant Goer Acoustic for ten years. After leaving Goer Acoustic, Zhou Hongwei chose to start his own business, forming a VR technology team to enter the head-mounted display market. In September 2021, ByteDance formally announced the acquisition of PICO, making a high-profile entry into the VR industry. Zhou Hongwei also chose to co-manage PICO with the ByteDance team.
An insider told The Paper’s reporters that Zhou Hongwei recently went to Singapore to report on PICO’s updates to ByteDance’s founder. “Senior management seems less interested in PICO than they were two years ago, so we expect PICO’s future direction to adjust,” another internal source revealed.
It’s worth noting that an insider told The Paper’s reporters that there were rumors that when ByteDance acquired PICO in 2021, an agreement was signed with the original PICO management, which would provide them with certain financial returns. However, the agreement’s specified period has not yet expired. This news has not been confirmed by ByteDance.
On September 27, 2022, PICO officially released a new generation VR all-in-one machine — PICO 4 series in the Chinese market, with prices starting at 2,499 yuan. This product is the first upgraded product released by PICO since its acquisition by ByteDance, attracting widespread attention.
At that time, ByteDance’s vice president Yang Zhenyu told The Paper in an interview that ByteDance had contacted many companies in the VR industry and had the best talks with PICO. He believed PICO was the most promising and culturally compatible company. “At that time, everyone clicked immediately, and PICO joined ByteDance.” He believed the match was mainly due to the potential combination of PICO and ByteDance’s content business.
Metaverse: Attack or Retreat?
The Paper’s reporters learned that since ByteDance officially announced the acquisition of PICO in September 2021, PICO’s team size expanded rapidly from the initial 200 to about 2,000, with about 30% being overseas teams.
Since the release of PICO 4, there have been continuous doubts about PICO. Rumors previously suggested that due to rapid internal expansion, factions formed within PICO, splitting into the “TikTok faction” and the “PICO faction”, leading to internal strife.
In November last year, a PICO official told The Paper: “We highly value the outside world’s attention to PICO and feedback on the product. But regarding some speculations and rumors about the company’s organizational level, these are mere conjectures and are not true.”
This year, PICO underwent several rounds of layoffs. In February, the layoff scale reached 20%-30%. Other media reports suggested that PICO’s business would gradually shut down, and ByteDance would abandon the metaverse.
In response, on October 23, ByteDance told The Paper that the news was not true. PICO is operating as usual, and the company will continue to invest in XR business in the long term.
Last year’s booming metaverse business has become a “white elephant” for many big tech companies. It is rumored that Tencent began restructuring its XR team in August this year and plans to act as an agent for Meta’s VR headset Oculus Quest, similar to Tencent’s partnership with Nintendo. The Paper learned from sources close to Tencent that this news is accurate.
Public data shows that XR refers to Extended Reality, a collection of VR (Virtual Reality), AR (Augmented Reality), and MR (Mixed Reality). By integrating the visual interaction technologies of these three, it provides users with an immersive experience that seamlessly transitions between the virtual and real worlds. XR is considered one of the essential technologies in the metaverse domain.
On February 16 this year, Tencent made significant adjustments to its XR business, which outsiders perceived as nearing an exit from the XR business. At the time, Tencent responded to The Paper that there were plans to adjust the self-developed hardware development route and optimize related organizations and positions within the business line. In addition to Tencent and ByteDance, companies such as Meta, Microsoft, and Kuaishou have made organizational or personnel adjustments to their metaverse or XR businesses this year to further enhance business efficiency.
Excessive spending is a significant reason why the metaverse business frequently faces obstacles within large tech firms. “VR hardware components require customization. Whether it’s core components or overall production costs, they’re all very high. The current market demand is still in the nurturing stage, and the path to profitability is unclear,” a PICO technician once told The Paper. “Current VR development requires a team of at least 100 people to work on hardware and software, and continuous investments are needed in design and manufacturing, content production, and algorithm optimization. If financial strength is lacking and product power isn’t strong, after several years of continuous investment, there will be financial difficulties, requiring a long-term commitment and a lot of patience.”