TMTPost -- Latest report suggested TikTok parent ByteDance Ltd. Is making progress in divestiture of gaming business.
Credit：Visual China
Two studios under ByteDance--a Shenzhen-based one working on an action game and a Hangzhou-based one working on an anime game merged into a new company called Saluosi Network Technology Co. Ltd., one of gaming companies that Tencent Holdings Ltd. invested in, people familiar with the matter told National Business Daily, a national financial and economic daily newspaper in China. Founded in December 2023, Saluosi is a wholly-owned subsiidary of Guangxi Tencent Venture Capital, an investment vehicle of Tencent, according to Qichacha, a provider of data and analysis on Chinese companies.
Saluosi independently operates at the moment and hasn’t been merged with Lightspeed Studios, one of flagship video game studios established by Tencent, Chinese technology news media outlet 36Kr learned. It was reported ByteDance have yet not finalized buyers for VI-GAME and MMC, two studios that developed anime-style role-playing game "Crystal of Atland" and sci-fi survival game "Earth: Revival", respectively. These games are deemed as the most successful mobile games since ByteDance forayed into gaming. 36Kr also learned Bytedance had talked with game publishers in China and investors overseas to sell Shanghai Moonton Technology Co., a studio it took over for US$4 billion in 2021, but the sales plan is proceeding slowly as the elevated valuation has discouraged prospective buyers.
Tencent’s reported takeover of two studios is the most significant progress since ByteDance decided to retreat from gaming months ago after two ambitious years. Nuverse, the unit publishes “Marvel Snap”, will significantly scale down its business, look for divestiture of existing titles with good performance while maintaining operation, and shut down all of unreleased titles except few innovative projects and related technology projects, ByteDance confirmed to TMTPost App late November.
Nuverse told TMTPost it does have restructure and business adjustments to focus more on some of new types of games and exploration of relevant technologies. The ByteDance subsidiary set up in 2021 said it will continue work well on operation games already launched to fully protect the rights and interests of players.
ByteDance CEO Liang Rubo and Yan Shou, head of Nuverse, have discussed the decision to scale back repeatedly for a long time, people close to ByteDance revealed to TMTPost. According to the people, Liang believes ByteDance should make efforts on and move resources to more basic, innovative and imaginative projects rather than gaming, as the company has been working for the “big and comprehensive" projects in the past year, leaving the projects without any focus and scattered resources.
ByteDance and Nuverse didn’t specify how many employees will be affected during the restructure. They didn’t respond to queries about future of Moonton and another gaming unit C4games. Prior to ByteDance’s confirmation, Reuters’ sources said last November the TikTok parent will seek to divest from titles already launched. Bloomberg the same month reported ByteDance plans to several lay off hundreds of staff in gaming and phase out Nuverse. The company was reported to wind down projects under development and consider sales of existing titles. It was also weighing sales of Moonton according to the report.
ByteDance later responded that it had made difficult decision to restructure its gaming business following a review. It added that it regularly reviews its businesses and make adjustments to center on long-term strategic growth areas.
Nuverse was in talks with Tencent about sales of many gaming assets, affecting project teams located in various cities including Shanghai and Shenzhen, LatePost learned from multiple sources in January. The Chinese news media outlet reported Nuverse wants to sell such games that it has spent hundreds of millions of dollars in development and is offering big discounts. "Crystal of Atland" and "Earth: Revival", two popular titles which have been published by Nuverse, are reported to be on sales through auctions, with valuations assessed by methods such as gross billing multipled by valuation multiples.
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