The owner of TikTok ByteDance has revealed that it is in discussions with several possible purchasers for its video game division, among them Tencent Holdings, the largest gaming business in the world based on revenue.
Following a report by the local media site LatePost that the company’s gaming arm Nuverse was in talks with Tencent about selling its operations, ByteDance confirmed the news on Tuesday. The article said that after investing over 100 million yuan (US$14 million) in developing many games, ByteDance was attempting to reach a sale by decreasing the worth of its video game companies.
The firm and Tencent have not signed a deal, the official stated. The Beijing-based company informed staff members in November, according to the South China Morning Post, that it would sell the rights to at least two of its games, the sci-fi survival game Earth: Revival and the anime-style role-playing game Crystal of Atlan, and shut down the majority of its game projects that had not yet been published online.
ByteDance laid off its game division
Layoffs at ByteDance’s games division, which employs close to 2,000 people, were also initiated, however, it was unclear how many workers were directly impacted. According to the Post, employees who choose to stay at ByteDance may be permitted to move to different teams.
At the time, a ByteDance spokesman stated that the company had made the decision to make adjustments to focus on long-term strategic growth areas and restructure its gaming business. In spite of its enormous success with the short video app TikTok and its Chinese counterpart Douyin, ByteDance has not been able to recoup its investment in video games. According to local media site DingjiaoOne, the corporation invested and acquired video games from around 20 studios for over 30 billion yuan between 2019 and 2022.
Less than 1% of the company’s US$54 billion in revenue in the first half of 2023 came from its video game division, according to Lisa Hanson, CEO of gaming industry consulting firm Niko Partners. Prior to taking a tentative step into the video game industry, ByteDance founder Zhang Yiming was not a video game aficionado. He resigned as chairman and CEO in 2021. According to the Post, Yan Shou, the leader of ByteDance’s video game division, has a history in strategic investments and has employed a number of individuals with consulting and strategy experience to assist him in managing the division.
Tech media source The Information said in December that Zhang had grown irritated with the sluggish development and had complained in 2022 about the lack of progress at the game company during a video chat with executives, claiming that its Moonton studio had not developed despite tripling its personnel. A month prior, ByteDance was reportedly in discussions to sell Moonton, according to Reuters.
