ByteDance, the Chinese company that owns TikTok, has acquired the virtual reality startup Pico in a deal that marks a major push by the company to diversify its business holdings and keep pace with the drive toward the metaverse.
Although ByteDance, which is headquartered in Beijing, did not immediately disclose the size of the deal, the company told CNBC that Pico’s “comprehensive suite of software and hardware technologies, as well as the talent and deep expertise of the team, will support both our entry to the VR space and long-term investment in this emerging field.”
Pico—which ranked as the third-largest virtual reality headset maker globally in the first quarter of 2021—is no small fry in the VR space, and the proposed deal harkens back to Facebook’s 2014 purchase of Oculus for a combination of $400 million in cash and 23.1 million Facebook shares. Although Facebook acknowledged at the time that the real-world applications of VR were still mostly confined to gaming, the platform signaled that it believed in the potential to expand VR “to new verticals, including communications, media and entertainment, education, and other areas.”
“Mobile is the platform of today, and now we’re also getting ready for the platforms of tomorrow,” Facebook founder and CEO, Mark Zuckerberg, said at the time. “Oculus has the chance to create the most social platform ever, and change the way we work, play, and communicate.”
In acquiring Pico, ByteDance could be gearing up for a potential future showdown against Facebook’s Oculus VR division, and could also face competition from Apple, which bought the virtual reality company NextVR last year.
The announcement of the proposed deal comes less than a week after TikTok, which ByteDance owns, announced that it was testing out a new augmented reality studio, which creators might soon be able to use to experiment with new in-app features, including lenses and visual effects.
A ByteDance spokesperson told CNBC that the company is “optimistic about the future of VR and its alignment with our mission,” but did not immediately respond to request for further comment.