In September 2022, ByteDance subsidiary Pico revealed the Pico 4 and Pico 4 Pro, its newest wave of virtual reality (VR) headsets. The 128GB version of the Pico 4 will retail at €429/£379 and the 256GB version at €499/£449, in Europe and the UK respectively. The device can operate both standalone and tethered, with bolstered technical specifications and comfort features. Details on the Pico 4 Pro are currently scarce, but it offers slight technical upgrades to the standard version and is sold as a ‘professional product’ exclusively to businesses and professionals.

ByteDance acquired China-based Pico in late August 2021, and while the brand lacked a strong presence outside its domestic market, the company had valuable expertise in hardware development. This move aligned ByteDance more closely with one of its main competitors, Meta (the parent company of Facebook, Instagram, and WhatsApp), which acquired the VR company Oculus in 2014 and is pushing the idea of VR headsets as a key access technology for a future metaverse.

Europe remains Pico’s Western focus

The Pico 4 is currently slated to launch in 13 European countries (including the UK, Germany, France, Spain, and Italy), Japan, Korea, and China in 2022. In Ampere’s latest Games Consumer survey (Q2 2022), just 13% of VR gamers in China used a Pico VR headset. The VR market in China is densely saturated with domestic VR headset manufacturers, including Huawei, Xiaomi, and iQIYI, which limits Pico's growth opportunities in its home market. Pico is therefore leveraging ByteDance’s financial strength to expand into international markets where there is less competition, but will face the challenge of building brand awareness and an audience in less established VR markets.

At this point, Pico has not revealed official plans to bring the device to the US, but the company is getting itself into a position to launch there. Pico offices were established in the US in June 2022 and listed jobs related to its international business. Also, FCC filings (a certification that authorises communication equipment for sale in the US) for the device surfaced in July 2022. 

Choosing to focus on Europe allows Pico to test its marketing strategy, observe how users engage with the product, and gain feedback from a broad range of Western consumers. Pico adopted a similar strategy earlier in 2022 when it launched the Pico Neo 3 Link in Europe via a ‘beta programme’, in which the headsets were sold below market rate in exchange for feedback on the device. It’s an intriguing strategy considering the European market is significantly more fragmented than the US and is also experiencing a cost of living squeeze due to inflation and spiralling energy costs.

Launching in the US would put Pico into direct competition with Meta’s Quest 2, and despite offering a handful of technological upgrades, Pico’s device does not provide an advantage over Meta’s in content terms. The company may be waiting to build up its catalogue of games before competing in the US market. More broadly, ByteDance continues to face scrutiny in the US over its data collection practices and links to mainland China, which may impact its willingness to compete in the US market.

Brand awareness and content are the obvious weaknesses

Pico 4 compares favourably with the Meta Quest 2 across its technical specifications, comfort, and price, but doesn’t have the content offer or branding to strongly compete at this time. Ampere therefore expects Pico to experience a slow adoption curve. Pico’s initially small user base will affect its ability to acquire content, as developers will be reluctant to create exclusives for the platform unless the guaranteed payments offset this lack of a customer base. That said, Pico secured its first major exclusive with Just Dance VR (Ubisoft) and this will play a key role in scaling its audience.