How ByteDance is copying Tencent’s playbook to conquer gaming

ByteDance is leveraging popular platforms like TikTok and Toutiao to get users for self-published games while developing its own

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ByteDance is now going after one of the most lucrative segments of the internet business -- gaming. (Picture: SCMP)

Published: 12:48am, 13 Feb 2020Updated: 4:29am, 13 Feb 2020

This article originally appeared on ABACUS

As ByteDance moves further into the lucrative gaming business, analysts expect the TikTok maker to follow Tencent’s path of using games to further monetise the millions of users on its social media apps.

With a lineup of popular apps like TikTok for short videos and Jinri Toutiao for news, ByteDance has become the world’s most valuable startup. Its apps have 1.5 billion monthly active users and 700 million daily active users, the company said in July.

The Beijing-based company is now looking for more ways to profit from its massive reach outside of advertising, and it’s focusing primarily on gaming. To achieve this, ByteDance is pulling directly from the playbook of its competitor Tencent. First it’s publishing games, then building up its own developer and creating its own game store. ByteDance’s gaming division reportedly already has more than 1,000 staff members.

“Gaming is one of the best ways to monetise traffic,” Hua Chuang Securities analyst Geng Chen said. “Now ByteDance relies on its platform traffic to cut into the game publishing business. It has formed a mature business and monetisation model.”

Gaming has always been the golden goose for internet companies. Online games can generate a steady revenue stream, and popular titles can keep users coming back for years. That’s why ByteDance is also trying to copy Tencent’s biggest trick of all: Funnelling users from other popular apps into lucrative mobile games.