ByteDance confirms purchase of VR firm Pico

Chinese tech giant ByteDance on Monday confirmed it has purchased virtual reality firm Pico Interactive to focus on the country's consumer market.

Though the companies didn't provide details about the transaction, industry sources said the value of the deal may reach over 5 billion yuan (US$781 million).

"Pico's comprehensive suite of software and hardware technologies, as well as the talent and expertise of its team, will support both our entry into the VR space and long-term investment in this emerging field," ByteDance said, adding that it was optimistic about the future of VR.

Founded in 2015, Pico Interactive now has a team of 300 people, providing VR devices and services. Its distribution channels cover 40 cities globally.

The global VR market revenue reached US$17.3 billion in 2020, and is expected to hit US$184.7 billion by 2026, with an annual growth rate of 49 percent on average. VR technology is being increasingly adopted, having gained widespread recognition, according to industry figures.

In the consumer market segment, VR has reached a "fusion and watershed moment" and will see rapid growth in deployment and sales in the next two or three years, Pico officials told media previously.

The acquisition will allow ByteDance to integrate its services like the popular Douyin (Chinese version of TikTok) with Pico's devices and services to offer users more immersive experiences, industry insiders said.

The purchase was the first strategic acquisition during the tenure of Liang Rubo, who has recently replaced Zhang Yiming, co-founder of ByteDance, as the company's new CEO.