ByteDance, the Chinese tech behemoth known for TikTok, is shifting its focus away from the gaming sector, a move that will result in a significant reduction in its workforce.
The Beijing-based company plans to phase out Nuverse, the division housing its gaming studios, next month as part of a strategic pivot towards its core ventures, an individual familiar with the situation revealed to CNN on the condition of anonymity.
Internally announced on Monday, this decision is expected to lead to substantial layoffs. Although Nuverse will maintain certain operations, including teams working on exploratory projects, specifics regarding retained staff weren’t disclosed.
Unreleased game development will cease, and ByteDance aims to sell existing titles such as “Crystal of Atlan,” an anime-style multiplayer game, and “Earth: Revival,” a sci-fi adventure, both launched earlier this year. Additionally, ByteDance seeks a buyer for Moonton, the studio behind the popular mobile game “Mobile Legends: Bang Bang.”
The potential sale of Moonton holds significance as it’s Nuverse’s flagship title, boasting over 1 billion installations and 100 million active monthly users, according to Niko Partners, a video game and esports research firm.
Confirming this restructuring, a ByteDance spokesperson acknowledged the company’s decision to review and adjust its gaming division to focus on long-term strategic growth, without delving into further details.
This retreat aligns with ByteDance’s recent streamlining efforts, including downsizing its virtual reality wing, Pico, amid ongoing economic uncertainties worldwide.
ByteDance’s foray into gaming, initiated in 2019, failed to pose a formidable challenge to industry leaders like Tencent and NetEase, both dominating China’s gaming market. Despite ByteDance’s substantial investment in gaming, it struggled to make a significant impact, with gaming contributing only a fraction, approximately 1% or less, to its overall revenue, as estimated by industry analysts.
Amid declining mobile gaming revenue and rising user acquisition costs, some industry players are reevaluating their strategies, realizing that expected returns might take longer or might not materialize at all.
ByteDance’s exit from game development and publishing may not drastically affect its core business, given that gaming accounted for a minimal share of its overall revenue. Despite being the world’s largest mobile and PC gaming market, China’s gaming industry poses fierce competition, making it challenging for newcomers to carve out a substantial share.
