How China Will Build the Metaverse
China's corporate national metaverse hinges on Facebook being disrupted by ByteDance.
ByteDance Enters Metaverse Acquires Third Biggest VR Maker
TikTok owner ByteDance has made its first foray into virtual reality (VR) through the acquisition of a start-up called Pico. This is notable since Pico is the third biggest VR player globally today.
Pico was the third-largest virtual reality headset maker globally in the first quarter of 2021, with shipments growing 44.7% year-on-year, according to IDC. This is a huge play by Beijing based ByteDance, to replace Facebook as the metaverse engineer of the future.
Pico is known for its Neo lineup of standalone virtual reality headsets, most recently the Pico Neo 3.
ByteDance, which found success with TikTok and Chinese version Douyin, the Pico acquisition marks a push to diversify its business and namely to create its own on-ramp into the metaverse. ByteDance will emerge as a leader in both B2C and B2B metaverse creative platforms and I predict will be the leader in the BCI era (brain computer interface).
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. There may be more synergy between ByteDance and Pico than there has been between Facebook and Oculus.
ByteDance found success with short video app TikTok and Chinese version Douyin and has been the most innovative consumer app maker in the last five years, and are creeping up as the Next Facebook status.
Even with new restrictive polices for gaming of China’s minors, ByteDance’s forray into gaming has been somewhat serious. In March, ByteDance acquired a major mobile gaming studio called Moonton for a reported $4 billion, as it looks to expand into gaming. ByteDance is well on its way to create a bleeding edge metaverse contribution. This is because its hold on GenZ consumers is just so massive globally.
ByteDance is known primarily as a social app company, thanks to global juggernaut TikTok and China-based Douyin and it’s diversification of its product and R&D is really truly incredible in gaming, Ed-Tech, advertising, AI services for B2B and other new domains. It is the most valuable company that’s not gone public yet and should be worth well over $200 Billion by now. If it was worth $180 billion before this VR acquisition, it’s certainly more by now.
Where Apple bought NextVR and Facebook bought Occulus, they haven’t done much with it and have yet to create a VR product that’s gone mainstream to any degree. ByteDance could theoretically beat them to it, since ByteDance has so much more riding on such a move, to truly disrupt Facebook before the metaverse is even born. ByteDance is the very definition of a 996 company, with a strict hierarchy that’s almost military like shrouded in secrecy and State-backed plans.
Pico is also a lot better than many realize. 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.
ByteDance also realizes for the future of gaming you need a VR product. So Facebook is intensifying its push into VR, Apple reportedly preparing to enter the market, and Sony preparing a follow-up to its PlayStation VR headset, ByteDance is signaling that it’s also interested in the space. However if ByteDance succeeds in its mission, it will on-board many services into VR and create a Chinese style metaverse for its over 1 billion netizens – that’s more than 3x the entire population of the U.S.
ByteDance is preparing for IPO and it’s going to be pretty epic. This is the company most likely to topple Facebook in global apps and advertising. Meanwhile it’s working on innovation on many fronts simultaneously. It’s the company that’s most likely to compete with Microsoft in gaming in the long-run.
The Beijing-based social-media giant, last valued at $180 billion in a funding round in December, had been weighing an initial public offering of all or some of its businesses in the U.S. or Hong Kong, according to people familiar with the company’s plans. Most believe that a Hong-Kong IPO and then a double IPO is likely in early 2022.
In late 2021, Pico has been assimilated into the Chinese corporate metaverse. ByteDance is the company best positioned in the world to turn VR into an Ed-tech play. While Facebook sees the metaverse as an extension for its Ad-model (Zuckerberg’s greed expansion), ByteDance isn’t constrained by such limiting factors.