According to insiders, the Beijing-based corporation has laid off or reassigned the majority of its employees at Wushuang Studio.
Prior to the government crackdown, ByteDance was counting on gaming to diversify its revenue streams.
According to people familiar with the matter, TikTok’s owner, ByteDance, is aggressively shrinking its video game arm, affecting hundreds of staff, in yet another hint that China’s smart money is continuing to abandon the strictly regulated industry.
According to one source, ByteDance is also laying off employees at Jiangnan Studio, a game production studio in Hangzhou.
ByteDance did not reply quickly to a request for comment.
The employment layoffs by ByteDance, China’s most valuable unicorn with big finances, would exacerbate the troubles of China’s gaming sector, which some analysts believe has peaked given that China’s censors scrutinise every component of a new game, from a story’s storyline to a character’s wardrobe.
The Chinese government has also reduced the issue of new gaming licences as part of a sweeping regulatory crackdown, adding considerable uncertainty as game makers often have no idea whether or when their goods may be brought to market.
However, it is not only the game sector that has suffered tough times.
ByteDance’s new CEO Liang Rubo, who succeeded founder Zhang Yiming, has applied a strategy known as “increasing muscle and decreasing fat,” which literally implies cutting back on activities with low profitability or bleak prospects.
Because ByteDance is not listed, it is not required to disclose changes in personnel or financial performance. However, according to recent findings from other publicly traded technology businesses, employment layoffs have become more regular.
According to the firm, Tencent Holdings, the social media and video gaming behemoth, reduced its staff to 110,715 by the end of June, a fall of almost 5,500 people from March. According to the company’s financial report, Xiaomi also slashed 900 positions in the second quarter.
ByteDance had been depending on gaming to diversify its revenue streams by tapping into its massive TikTok user base. In February of last year, it put its main gaming company Nuverse front and centre by developing a separate website for the development and publishing teams. According to its recruitment site, Nuverse is led by former Tencent CEO Yan Shou and has teams in first-tier cities including as Beijing, Shanghai, Hangzhou, and Shenzhen.
Nuverse’s website lists numerous titles that have been released, including Flower, an ancient Chinese-style aristocratic school development game, and One Piece Blood Routes, a 3D-action mobile game. It received a licence for the mobile game Crystal of Atlan in July.