Iqiyi doesn’t want to pay back the money owed by VR?

Source: Helix Lab, Author: Pastoral, Editor: Nuts

Image source: Generated by Unbounded AI‌

Another VR company is teetering on the edge of life and death.

According to the "Kechuangban Daily" report, iQIYI's VR company Qingdao Dream Blossom Technology Co., Ltd. (hereinafter referred to as Dream Blossom) has now stagnated in business, and a total of more than 100 current and former employees have been owed wages.

Dream Blooming is one of iQiyi’s many independent businesses. Its predecessor was iQiyi Smart, and it can even be traced back to the smart hardware department established by iQiyi in 2016. This department has focused on research and development since its inception. VR technology and "Adventure" series of VR all-in-one machines.

In December 2021, iQiyi Smart officially launched the iQiyi Qiyu Dream VR all-in-one machine. At the press conference, iQiyi Smart announced that it will change its name to Dream Bloom.

According to the information from Tianyancha, Beijing iQiyi Co., Ltd. is still the largest shareholder of Dream Blossom, accounting for 49.62% of the shares.

Helix Labs also noticed that less than a month ago, it was disclosed that Bai Peng, the vice president of Xiaomi’s To B business, had resigned from Xiaomi and that the company he joined was “Blooming Dreams”. After Bai Peng took office, he took over the company Veteran Xiong Wen served as CEO.

Less than a month after this important personnel change, the news of Dream Blooming’s business stagnation and employees’ wage arrears came out. For the cold VR industry this year, this situation seems not surprising, but there is nothing we can do about it .

There are early signs of a shutdown

In fact, there are already signs of the suspension of Dream Blossom. At the beginning of this year, Wang Kai, who was the vice president of Dream Bloom at the time, announced to the public that in April this year, he will launch the "Qi Yu Next Generation New Mixed Reality MR Flagship New Product", and he vowed to cooperate with Apple's MR products "formed a trend of rushing ahead."

But after April, iQiyi’s new products did not arrive as scheduled. On the contrary, many iQiyi users complained on the Internet that the cashback for user activities originally promised by Qiyu VR products could not be fulfilled.

In May last year, Qiyu VR launched a check-in activity, promising users to get 3,000 yuan cashback and other gifts for checking in for 300 consecutive days. However, many users did not get the expected promised cashback after completing the required check-in.

For this reason, many users have already wanted to obtain refunds through lawsuits, and some users have complained about this to the local market supervision department. "; "Recommend the complainant to sue the merchant".

Other rumors about Dream Blossom in the past two months have also suggested that the VR company is in a difficult situation.

36 Krypton quoted people familiar with the matter as saying that Dream Blossom has carried out two layoffs in the past six months, and the layoff ratio exceeded 50%, leaving less than 100 employees.

The report of the "Science and Technology Innovation Board Daily" also shows that Dream Blooming has been delaying salary payments since March this year. At first, it was paid at 50% or 70%. In May, some people did not get paid for the whole month.

Where does the financial pressure of Dream Bloom come from? As a hardware technology company, weak sales of its products may be a major factor. Blooming also failed to generate growth against the trend, and the cashback activities could not be fulfilled, which made its reputation decline among the user community.

At present, the Qiyu VR flagship store has been removed from e-commerce platforms such as Tmall, Taobao and JD.com.

It is also due to the poor performance of product sales that Dream Blossom’s life-saving food and grass have not yet arrived. In January this year, Dream Blossom announced that it had obtained a C round of financing of 400 million yuan. Qingdao Economic Control Group and Real knowledge capital joint investment.

However, a person familiar with the matter revealed that this investment is not a one-time payment, but a phased allocation, which also involves certain gambling terms. Because Dream Bloom "did not complete the set sales target, so there was no way to get the complete financing, only tens of millions".

Gong Yu doesn't want to care anymore?

On the one hand, the front-end sales cannot support the company's daily operations; on the other hand, the financial assistance from the rear has basically bottomed out. For today's dream to bloom, it seems that we can only pin our hopes on the old club iQiyi.

But the problem is that iQiyi seems to be reluctant to take over the mess of Dream Blossom.

According to public information, Gong Yu, the founder of iQiyi, is currently the chairman of Qingdao Dream Blossom Technology Co., Ltd. Some employees once contacted Gong Yu directly on the internal chat tool about layoffs, but the reply was: "Dream Blossom is an independent company now, I can only ask about the situation and give them advice."

Some employees of Dream Blossom contacted Gong Yu, hoping to solve the problem of wage arrears, but the replies they received were mostly similar. Gong Yu emphasized that iQiyi and Dream Bloom are two independent subjects. Can give advice and help.

Coincidentally, some users who participated in the Qiyu VR check-in activity but could not get cash back also received similar responses when they made complaints on the Internet.

Xiaohongshu user "Lao Zhang Lao Zhang never panics" once initiated a rights protection against iQiyi on the Internet, but the reply was "This product was developed and produced by the business department incubated within iQiyi, and it is now independently operated .”

From a legal point of view, iQiyi and Dream Blossom do belong to two independent company entities, but at the same time, it cannot be denied that Dream Bloom has used the influence of iQiyi to promote Qiyu VR products on many occasions. Endorsement, objectively, many users buy products and participate in activities for the iQiyi brand.

But now the user's activity rewards cannot be cashed out, and the employees' salaries have not been paid in full. iQiyi, which should finally bloom for its dreams, has chosen to get out of the matter.

Looking at the development status of iQiyi in the past two years, it may also be due to its own financial considerations to draw a clear line between its choice and the blooming of dreams.

Losses have lasted for twelve years, and iQiyi struggled to achieve profitability in the middle of last year. An important measure to turn losses into profits is iQiyi's streamlining of business and personnel, including cutting off some efficiency Low and no future business.

As a listed company, iQiyi does need to use concepts such as VR to enrich its business story, but this is only a concept. If it is implemented in real money, iQiyi at this stage seems to be There is no such a rich family background.

Does iQiyi still need VR?

Once upon a time, iQiyi had great enthusiasm for the VR industry. As early as 2016, iQiyi proposed to launch a VR ecological plan, including the 10 largest IP video self-made plans, the 100 largest IP game cooperation plans, and the 10 million VR user plan.

It is against this background that the predecessor of Dream Bloom, "iQiyi Smart", was officially approved.

Later, when the wave of metaverse hit, iQiyi used its own VR business as a gimmick several times to outline its blueprint for metaverse to the outside world.

From the perspective of that time, the Qiyu VR created by Dream Bloom did have a bright moment. Throughout 2021, the shipments of Qiyu VR’s online e-commerce channel accounted for 27.4%, second only to Byte’s PICO , ranked second in the industry, and the two together shared more than half of the market share.

By 2022, Qiyu VR's market share in the world can still be ranked fifth, but the market has already quietly produced a concept. This year, global AR/VR headset shipments have plummeted by 20.9%. Many companies expect The explosion of VR terminals and content ecology in China has not yet come.

Even until this year. Apple's long-awaited head-mounted display device Vision Pro was officially launched, but it still hasn't fundamentally driven the global consumption boom of VR devices.

Under such circumstances, major companies have already reduced their investment in VR. Microsoft started layoffs of 10,000 people this year, Tencent XR department canceled all jobs, Byte PICO lowered its sales target for 2023...

iQiyi is no exception. In the recent financial report meeting, exploring VR and Metaverse were no longer mentioned, replaced by AIGC, which is in the limelight.

Today’s dream blooming is actually similar to iQiyi a few years ago. At that time, iQiyi’s financial situation was poor. It was once speculated that it would be a burden that Baidu was eager to get rid of, but Baidu finally chose to continue to gamble until last year. In March, blood transfusions continued for iQiyi until iQiyi's full profitability came.

But the current VR industry is not the online video industry of last year after all, and Gong Yu, who also serves as the chairman of Dream Blossom Company, may also know whether it is worth continuing to water and fertilize a dying tree.

Perhaps this is the cruelty of the business world. When we start a business together, we are close brothers and partners, but when we are really reduced to life and death, we are "two independent legal subjects".