TikTok owner ByteDance retreats from video gaming with cuts at main studio amid a stagnating market dominated by Tencent
- The social media giant is cutting hundreds of jobs at Nuverse, its flagship gaming studio, and will shut down development on most unlaunched titles
- The retreat comes a year after ByteDance made major cuts at two studios under Nuverse, as the world’s largest gaming market slows from tightened regulations
Nuverse, ByteDance’s flagship gaming studio, has informed employees that it will shut down most projects not yet online, the sources said. It usually takes years to develop a new game and to obtain regulatory approval before the game can be put online to generate revenue in China.
The studio will also sell the rights to at least two of its titles – the anime-style role-playing game Crystal of Atlan and sci-fi survival game Earth: Revival – according to one source. Both games were launched by Nuverse earlier this year.
“We regularly review our businesses and make adjustments to centre on long-term strategic growth areas,” a ByteDance representative said in a statement to the Post on Monday. “Following a recent review, we’ve made the difficult decision to restructure our gaming business.”
ByteDance cuts ‘hundreds of jobs’ at gaming operations: sources
It is not clear how many people will be laid off. The unit has nearly 2,000 people, according to one source, but some workers seeking to stay at ByteDance may be granted approval to transfer to other teams. Those who are laid off will be compensated according to the number of years they have served plus an extra one to three months of pay, another source said.
The pullback by China’s most valuable start-up comes as the domestic video gaming market – once regarded as a lucrative area that could be a growth engine for Big Tech firms – has stagnated.
In 2021, Beijing limited people under the age of 18 to playing just one hour a day on Friday, Saturday, Sunday and statutory holidays. All new games also have to go through a rigorous review before being put online and monetised in the country. Since the end of an eight-month freeze on game licences, the number of newly approved titles each month has remained lower than previous levels.
After last year’s lay-offs, one person at the company told the Post that ByteDance had three major gaming studios left. The company had scaled up in the market by offering higher salaries than at Tencent and NetEase, so the lay-offs could impact overall pay in the industry and the flow of personnel, the source said.
