ByteDance, the Chinese tech conglomerate behind TikTok, is undergoing shifts by withdrawing from the gaming industry, resulting in the termination of hundreds of jobs.
The company, headquartered in Beijing, will phase out Nuverse, the unit housing its video game studios, next month as part of an effort to refocus on its core businesses. The announcement, made internally on Monday, has prompted job cuts, with Nuverse retaining some operations for exploratory initiatives.
Development on unreleased games will cease, and ByteDance aims to sell existing titles, including “Crystal of Atlan,” an anime-style multiplayer game, and “Earth: Revival,” a sci-fi survival quest, both launched earlier this year.
ByteDance is also actively seeking a buyer for Moonton, a gaming studio acquired in 2021, known for the popular mobile game “Mobile Legends: Bang Bang.” This move is significant as “Mobile Legends” is Nuverse’s flagship game, boasting over 1 billion installations and more than 100 million monthly active users, according to Niko Partners, a video game and esports market research firm.
In a statement, a ByteDance spokesperson confirmed shifts of their gaming business, citing a recent review and the challenging decision to streamline operations. The spokesperson emphasized the company’s commitment to long-term strategic growth areas.
This strategic retreat aligns with ByteDance’s wider operational streamlining efforts, including recent downsizing in its virtual reality unit, Pico.
As global economic uncertainty persists due to the pandemic, many major tech companies worldwide have had to reduce their workforce. ByteDance, in particular, faced challenges in the gaming sector despite substantial investments, prompting a reevaluation of priorities. According to Lisa Hanson, CEO of Niko Partners, ByteDance may be shifting away from the massive investment required for blockbuster titles.
The gaming industry at large is grappling with challenges, including declining mobile gaming revenue and escalating user acquisition costs, as noted by Neil Barbour, a research analyst at S&P Global Market Intelligence. Publishers, in response, are reassessing their strategies, recognizing that anticipated payoffs may take longer than expected or be unattainable.