ByteDance Bids Farewell to Gaming, Eliminating Hundreds of Jobs

ByteDance, the tech behemoth responsible for the popular app TikTok, is dialing back its involvement in the video gaming industry. The move, slated to result in significant job cuts, will see the company put an end to its gaming arm, Nuverse, within the coming month. The decision is a strategic pivot toward centering on its fundamental business operations, an individual privy to the situation revealed to CNN.

The disclosure, initially made internally at the start of the week, came from an anonymous source due to the private nature of the details. While Nuverse will continue certain operations, including allocating staff to “exploratory initiatives,” the exact number of retentions remains unclear.

ByteDance declared on Tuesday that it has reached the tough decision to reorganize its gaming sector following a comprehensive review. The company emphasized its periodic evaluations and adjustments to focus on areas posing potential for long-term strategic growth.

This retreat occurs in tandem with ByteDance’s efforts to optimize its overall operations, demonstrated by a recent resizing of its virtual reality unit, Pico. The tech giant’s downsizing echoes similar moves by numerous big tech companies globally, responding to the economic turmoil ushered in by the pandemic.

Besides ByteDance’s challenges, the wider gaming sector is also grappling with difficulties. Neil Barbour, associate research analyst at S&P Global Market Intelligence, pointed out that while mobile gaming revenues are shrinking, user acquisition costs are on the rise. As a result, some publishers are reconsidering their ambitious plans.

ByteDance’s Current Games and History

As part of this strategic shift, ByteDance plans to halt the development of unreleased games and sell off its existing lineup. Among the titles on the sales block are the anime-style multiplayer game “Crystal of Atlan” and the sci-fi survival game “Earth: Revival,” both of which made their debut earlier this year.

ByteDance is also looking for a potential buyer for Moonton, a gaming studio known for the hit mobile game “Mobile Legends: Bang Bang,” which the tech giant purchased in 2021. This game boasts over 1 billion downloads and 100 million monthly active users, marking its significance as Nuverse’s principal game, according to Niko Partners, a market research firm specializing in video games and esports.

Since its foray into the gaming sphere in 2019, ByteDance has struggled to compete with industry giants Tencent and NetEase. Lisa Hanson, CEO of Niko Partners, suggested that ByteDance’s intention could be to minimize losses, given that gaming constitutes a minor portion of its overall business. She estimated that Nuverse accounted for approximately 1% of ByteDance’s total revenue, making its exit from game development unlikely to have a significant impact on the firm.

China currently holds the title of the world’s largest mobile and PC gaming market, according to Niko Partners. The firm forecasts a total of 710.3 million gamers in the country this year, with the industry projected to generate around $47.7 billion in revenue from video game software and services.