iQiyi's VR company's business has stagnated, and more than 100 employees have been owed wages|Investigation

Source: "Science and Technology Innovation Board Daily"

Reporter Zhang Yangyang

The XR industry is once again in the cold. A reporter from the "Kechuangban Daily" learned from multiple independent sources that the business of Dream Blossom Technology Co., Ltd. (hereinafter referred to as "Dream Blossom"), a VR company under iQiyi, has stagnated, and more than 100 current and former employees have been owed wages. .

iQiyi is currently the largest shareholder of Dream Blossom, holding 49.62% of the shares. Gong Yu, the founder and CEO of iQiyi, also serves as the chairman of the latter. The reporter asked iQiyi and Dream Blossom about this matter. As of press time, neither party responded.

▍All employees will be owed wages from March

A person familiar with the matter told the reporter of "Kechuangban Daily" that since March this year, the company has started to delay the payment of wages, most of them paid half or 70%, and no wages were paid for the whole month in May and July. The person resigned from Dream Blossom in June this year. He said that the company had owed him two months of wages. When he left, "they (Dream Blossom) did not sign any guarantee to clarify when the arrears of salary will be paid."

Another person familiar with the situation, Wang Xuan, said that the company asked all employees to sign a salary delay notice in March this year, and the salary of all employees will be paid in proportion to their ranks, 80% for level 6, 70% for level 7-8, and 50% for level 9. %; The head of the department reported at the CEO level receives Beijing's minimum living standard of 2,300 yuan per month. Currently, he has owed wages for 3 months in total, and compensation for some laid-off employees has not been paid on time, and last year's performance has also been withheld for no reason.

A number of people familiar with the matter said that ** company is currently in a difficult situation. Basically, all employees owe wages. The business has also stagnated in the past six months, and the supplier has owed the payment. The supply chain has ceased to operate. off the shelf. **

On e-commerce platforms such as Taobao, Tmall, and JD.com, the reporter really did not find a store where dreams bloomed.

People familiar with the matter told the reporter of the "Science and Technology Innovation Board Daily" that some resigned and current employees formed a salary-seeking group on August 2. As of press time, there are a total of 134 people in this group (on-the-job + resigned), and Dream Blossom had nearly 200 employees at its peak.

"The current problem is very big. Suppliers' payment, event check-in rebates, and employee wages. Recently, suppliers have come to the company to ask for money." Wang Xuan said, "Because of wage arrears, the customer service team in Deyang, Sichuan has collectively applied for After applying for labor arbitration, some people in Beijing also plan to apply for labor arbitration.”

The development of dreams to the present situation, in fact, has long been a clue.

In mid-July, Dream Bloom was a "cash back" activity to attract consumers to buy VR equipment, and it was revealed that it was difficult to cash out. At that time, the staff of the market supervision department in the jurisdiction where the main company belongs said: the company has a problem with its current funds, and the time for returning the card cannot be determined, and it will be punished according to the interview and investigation situation.

On July 31, Dream Blossom also issued a public statement, acknowledging that it faced challenges and could not issue rebates, and promised to do so. The reporter of "Kechuangban Daily" noticed on the social media platform that there are still many consumers complaining about the incident.

**▍Why come here? **

In the XR industry, although the much-anticipated Apple Vision Pro was launched in June, the industry has not become popular since then, and related companies are still struggling in product development, commercialization, and capital supply.

VR is a technical activity that burns money, and the problem of funding has always been the biggest problem for the dream to bloom.

In January of this year, Dream Blossom announced the completion of the C round of financing of 400 million yuan, jointly invested by Qingdao Economic Control Group and Zhenzhi Capital, and the company name was changed from "Beijing Dream Blossom Technology Co., Ltd." to "Qingdao Dream Blossom Technology Co., Ltd." Also deliberately moved from Beijing to Qingdao.

But Wang Xuan told the reporter of "Kechuangban Daily" that the 400 million yuan in the **C round of financing did not actually arrive in full. The first tranche was only 150 million yuan, but it was spent quickly, and the follow-up funds were not met due to the gambling conditions. , has not arrived yet. **If the funds are not in place, the business cannot be carried out. "The business has stagnated in the past six months, and our production has basically stopped in the second quarter."

As for whether the financing has been received, the reporter also asked iQiyi and Dream Bloom for confirmation, but they have not yet received a reply.

The funds are unsustainable, and the company has been reducing expenses through frequent layoffs this year.

Wang Xuan also revealed that in March, May, and June this year, 50% of the company's employees were laid off. R&D was the hardest hit area. to hundreds of employees.

It is worth mentioning that in mid-July, there was a personnel change at the top of Dream Blossom. Bai Peng, former vice president of Xiaomi's To B business, joined as CEO, and Xiong Wen, the former CEO, resigned.

Employees and the industry hope that Bai Peng's entry can save this precarious company. "After the new CEO came, he really tried to negotiate financing issues with investors, but there is no progress so far," said a person familiar with the matter.

From the perspective of domestic market share, based on the data of multiple third-party agencies, Dream Blooming has always maintained its second position.

The business of the industry giants is stagnant, and employees are owed wages on a large scale. When the situation has developed to this point, Wang Xuan concluded that the management made a mistake in decision-making: ** spent too much money, blindly expanded recruitment, and imported game content from overseas regardless of cost, including the check-in return. "These are not the attitudes that start-up companies should have." **

Some people in the industry analyzed to the reporter of "Science and Technology Innovation Board Daily" that the development of VR technology requires too much capital, the dream blooms into research and development too late, and the product competitiveness is not good. Check-in cashback activities, spend money to grab users, occupy the market, and cultivate consumption habits. The starting point of marketing is good, but it has not waited for the market to explode, and it is difficult to cover the BOM (bill of materials) brought by "check-in" with additional starting quantity. losses, and labor costs. **

Several people familiar with the matter said that due to wage arrears, many employees have been unable to repay their mortgages and rents on time, and their lives are in trouble. Some employees have already quit, and some even had to leave Beijing.

▍Employees pin their hopes on iQIYI to save the crisis

Since the end of last year, with leading companies such as Meta, Microsoft, and Tencent shrinking their Metaverse and XR businesses one after another, the global XR industry has suffered from cold weather. Especially this year when generative AI represented by ChatGPT occupies the main line of technology, the XR market seems to be Even more lonely.

This experience of Dream Bloom has added a bit of chill to the current precarious and unstable XR industry.

Judging from the exchanges between the reporter of "Science and Technology Innovation Board Daily" and many industry professionals, the current XR equipment, the B-end market has greater demand than the C-end market, and it is better to do it. But Dream Bloom has always been aimed at the C-end market.

Wang Xuan told the "Kechuangban Daily" reporter that C-end users have high requirements for experience and content. "It can be said that they spend the money to buy Xiaomi and want the experience of Apple." To really find out, hardware, basic conditions, algorithms, and software content all need support.

"It's too difficult, unless it's not profitable. At that time (2016) iQiyi asked Xiong Wen to do VR, and he told Gong Yu (CEO of iQiyi) that he had to plan not to make money for 5 years. .” Wang Xuan said.

Dream Bloom also wanted to change its market positioning before. Wang Xuan told the "Kechuangban Daily" reporter that in the middle of 2022, the former CEO Xiong Wen organized a strategy seminar for the company's core employees to sort out what they had done in the past few years. After Bai Peng succeeds, the focus is also to B. **

But the problem facing to B is, "Every customer's needs are different, and the individuality is too strong, and we don't have so many human resources support." If to B and to C "walk on two legs, with our funds, it will not work at all. ".

This company, which was incubated and operated by iQiyi, fell into a quagmire.

iQiyi is currently the largest shareholder of Dream Blossom, holding 49.62% of the shares. Gong Yu, the founder and CEO of iQiyi, also serves as the chairman of the latter. Dream Bloom employees who are in trouble place their hopes on iQiyi to save the crisis.

Several people familiar with the matter told the "Kechuangban Daily" that they have sent messages to Gong Yu on the internal chat tool many times, hoping that he can help solve the problem of salary arrears.

But they seemed dissatisfied with Gong Yu's response, "Everyone received a templated reply, and the first sentence emphasized that iQiyi and Dream Bloom are two independent subjects."