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TikTok Parent Company Restructures Gaming Division
TikTok Parent Company Restructures Gaming Division – ByteDance, the powerhouse behind TikTok, has recently undergone a strategic transformation, signaling a departure from its once ambitious foray into the gaming industry. Previously a major player in this space, ByteDance has executed a significant restructuring of its gaming division. This move involves a substantial downsizing, with hundreds of employees from the Nuverse gaming division facing termination, alongside plans to offload Montoon Technologies, the developer responsible for the widely popular Mobile Legends: Bang Bang (MLBB).
This restructuring underscores ByteDance’s commitment to refocus its core business on social media, strategically trimming down unprofitable units. A spokesperson for ByteDance conveyed to Reuters, “We regularly review our business and make adjustments to focus on long-term strategic growth areas. After careful consideration, we have made the tough decision to restructure our gaming business.”
Nuverse, responsible for a series of games, has yet to achieve commercial success or breakthroughs in the last two years, making it a scrutinized division within the company. ByteDance has instructed senior managers from Nuverse to halt all ongoing game projects, effective no later than next month. Subsequently, hundreds of employees, out of a total of 3,000, working on these projects have been laid off.
ByteDance, currently valued at $223.5 billion USD (approximately Rp 3.4 trillion), had previously laid off over 150 employees from its gaming division in 2022. Additionally, in November 2023, hundreds more were let go from the team developing the virtual reality (VR) headset Pico. Beyond layoffs and halting game development, ByteDance is reportedly in talks to sell Nuverse-published games, such as Marvel Snap and Crystal of Atlan. Moonton Technologies, the studio behind the MOBA sensation Mobile Legends, is also on the selling block, with ByteDance reportedly engaging with a Saudi Arabian company for the sale, following its acquisition for $4 billion USD (approximately Rp 61.9 trillion).
In contrast, the casual gaming brand Ohayoo, known for games launched on Douyin (the Chinese version of TikTok), remains unaffected by the restructuring. Casual games playable on TikTok are not part of the sale.
The impact on ByteDance’s overall business remains uncertain, but the company has made strides in e-commerce with TikTok Shop, an online shopping feature recently permitted in Indonesia for promotional purposes to prevent algorithmic monopolies. ByteDance is also expected to continue investing in artificial intelligence (AI). However, the company has expressed no interest in re-entering the global gaming industry, valued at $185 billion USD (approximately Rp 2.7 quadrillion).
Nuverse was initially acquired by ByteDance in 2017, seen as the company’s strategic move to enter the global gaming market and compete with Tencent Holdings, the world’s largest gaming company. Marvel Snap, Nuverse’s flagship game, garnered a loyal player community but fell short of commercial success. Nuverse also published titles like One Piece: The Voyage and Crystal of Atlan. ByteDance emphasized Nuverse’s importance in 2021, officially designating it as one of six business units under its structural overhaul, alongside TikTok, Douyin, Dali Education, Lark, and BytePlus. In 2021, Nuverse expanded its portfolio by acquiring external studios, including Moonton Technologies in March and C4games in April.
Positive Conclusions and Suggestions
ByteDance’s strategic shift away from the gaming industry reflects a decisive move towards consolidating its strengths in the ever-expanding realm of social media. The restructuring, though challenging for those directly impacted, aligns with ByteDance’s commitment to long-term strategic growth. The decision to refocus on areas of proven success, such as TikTok and e-commerce through TikTok Shop, indicates a keen awareness of market dynamics and a dedication to innovation.
As ByteDance navigates this transformative period, it is poised to leverage its considerable resources in artificial intelligence and continue shaping the future of digital experiences. While the fate of Nuverse and its associated gaming assets remains uncertain, ByteDance’s steadfast commitment to key areas of growth positions the company for sustained success.
In light of these developments, a positive outlook is warranted for ByteDance’s strategic direction. The company’s resilience, adaptability, and emphasis on high-impact ventures such as TikTok Shop signal a bright future. It is recommended that ByteDance continues to invest in innovation, building on its strengths in social media and e-commerce, and explores synergies between these domains to unlock new avenues for growth and engagement. This strategic repositioning, backed by a commitment to technological advancements, sets ByteDance on a trajectory to thrive in the dynamic digital landscape.