TikTok owner ByteDance is Retreating From Gaming and Laying Off Hundreds
ByteDance, the Chinese tech giant renowned for its ownership of TikTok, is making a strategic shift away from the gaming industry, resulting in a significant reduction of its workforce.
The company will wind down Nuverse, the unit housing its video game studios, next month, aiming to concentrate on its core businesses, according to an inside source reported by CNN. Although Nuverse will retain certain operations, including staff focusing on exploratory initiatives, specific details on the extent of the downsizing remain undisclosed.
ByteDance plans to halt the development of unreleased games and explore the sale of existing titles, such as “Crystal of Atlan” and “Earth: Revival.” Additionally, ByteDance is seeking a buyer for Moonton, a video game studio it acquired in 2021, known for the popular mobile game “Mobile Legends: Bang Bang.”
A spokesperson from ByteDance confirmed the restructuring of its gaming business, emphasizing the decision’s difficulty. The company cited a regular review of its businesses, aiming to make adjustments that align with long-term strategic growth areas.
This move follows ByteDance’s broader efforts to streamline its operations, including recent downsizing in its virtual reality unit, Pico. The decision to pull back from gaming reflects the company’s reevaluation of its investments, particularly in an industry where it has faced challenges competing with established leaders like Tencent and NetEase.
Industry experts note that ByteDance’s foray into gaming did not yield significant success, with Nuverse contributing only a small fraction, approximately “1% or less,” to the company’s total revenue. The gaming arm’s restructuring aligns with ByteDance’s focus on its core business, notably TikTok, and its broader strategic goals.
The gaming industry in China faces its own challenges, with mobile gaming revenue declining and rising user acquisition costs. ByteDance’s move is seen as a pragmatic decision to cut losses and prioritize investments in areas with greater potential for success.
