According to persons familiar with the situation, ByteDance is laying off some 1,000 employees in its gaming division, marking the largest restructuring of what was previously seen to be a crucial business area for the Chinese internet giant.
One insider stated that ByteDance will continue to operate its current titles as it attempts to unload them, but that the business will stop working on new games except for a few creative initiatives.
The individual stated that ByteDance would rather concentrate on its main businesses of short-video platform TikTok, Chinese sister app Douyin, and e-commerce than the gaming segment, which it believes lacks concentration and has limited opportunities for monetization of games.
Since 2016, the operator of TikTok has made significant investments in the gaming industry in an attempt to compete with its fellow countrymen Tencent Holdings, which is currently the largest gaming firm globally in terms of revenue. According to Chinese official media, ByteDance invested over 30 billion yuan ($4.2 billion) in over 19 gaming firms between 2019 and 2022.
However, in the second half of 2021, ByteDance began to significantly reduce its gaming activities due to a lackluster result. At Nuverse, the brand ByteDance launched in 2019 to expand into the global gaming market, and many jobs were eliminated last year. Due to its underwhelming results in the previous year, the business also dissolved one of its primary gaming studios.
ByteDance released a statement on Monday stating,
“We regularly review our businesses and make adjustments to center on long-term strategic growth areas.” “Following a recent review, we’ve made the difficult decision to restructure our gaming business.”
ByteDance Navigates Challenges
Due to challenges with both domestic and international sales, ByteDance last month let go of around 300 people, or 23% of the workforce, from its virtual reality division, Pico. The move away from video games coincides with the global economic slump and China’s gaming industry’s ongoing recovery challenges. Tencent, a rival, has maintained growth because of its extensive portfolio.
When it comes to publishing its own massive language models the technology that powers generative AI products like OpenAI’s ChatGPT ByteDance has lagged behind competitors. However, Flow, the company’s AI section, has stepped up the creation of apps that will be integrated into ByteDance products.
ByteDance, Tencent, and Alibaba Group Holding are the other companies in the race for workplace chatbots; it discreetly released the AI bot Doubao in August and this month introduced an AI assistant to its office tool Feishu.
Games by ByteDance
Marvel Snap, One Piece: The Voyage, Crystal of Atland, and more top ByteDance games are available online. Second Dinner, a US-based studio, produced Marvel Snap. In addition, ByteDance is expected to declare shortly that it is “winding down its Nuverse gaming brand and full retreat from mainstream video games,” according to sources quoted by the new agency.
TikTok remains Banned in India
In the meanwhile, TikTok is still prohibited in India. India banned TikTok in June 2020 because of national security concerns that arose after a military confrontation with China. This action made it possible for Instagram to seize a sizable portion of the industry, and several TikTok knockoffs quickly became prominent competitors in the newly open market.