ByteDance offloads gaming unit to Tencent-backed firm in sign of ongoing industry consolidation

C4Games, acquired by ByteDance in 2021, is the third studio to be sold to a Tencent-backed company as the TikTok owner continues its retreat from the business

Last November, ByteDance decided to shut down most gaming projects that had not been released online, and pursue asset sales for those that had been launched

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Signage for ByteDance on a building in Shanghai, China, March 14, 2024. Photo: Bloomberg

Published: 4:00pm, 9 May 2024

TikTok owner ByteDance, which began a retreat from video gaming last year, has sold a third studio to a Tencent-backed company, as the industry continues its consolidation amid ongoing weakness in consumer spending and regulatory uncertainties.

ByteDance has agreed to sell C4Games to a subsidiary of China Ruyi Holdings, a film and game production firm nearly 22 per cent owned by video gaming giant Tencent Holdings, for 259 million yuan (US$35.8 million), Beijing-based China Ruyi said in a Tuesday filing to the Hong Kong stock exchange.

C4Games, acquired by ByteDance in 2021 for an undisclosed amount, is best known for Red Alert Online, derived from the famous 1990s American single-player game Red Alert.

The latest move comes two months after ByteDance sold two other gaming units to Tencent. In March, the South China Morning Post reported that LightSpeed Studios, one of Tencent’s key gaming units and maker of the popular title PUBG Mobile, absorbed a project in Shenzhen previously owned by ByteDance’s Gravity Studio and an open-world project belonging to ByteDance’s Jiangnan Studio in Hangzhou.

The latest deal signals further consolidation in China’s video gaming industry, the world’s biggest by revenue.

A screenshot of the Crystal of Atlan mobile video game. Photo: Handout

Last November, ByteDance decided to shut down most gaming projects that had not been released online, and pursued asset sales for those that had been launched, including an anime-style role-playing game Crystal of Atlan and sci-fi survival title Earth: Revival.