ByteDance’s gaming ambition has been an expensive and short-lived pursuit.
In late 2021, TikTok’s parent company’s plans for gaming came to light after it became one of the company’s six main business units, posing a new threat to incumbents like Tencent and NetEase. and rising star MiHoYo. However, after two years of lukewarm performance, the gaming department, called Nuverse, is significantly scaling back its operations in a move that has surprised many employees.
“We periodically review our businesses and make adjustments to focus on areas of long-term strategic growth. Following a recent review, we made the difficult decision to restructure our gaming business,” a ByteDance spokesperson told TechCrunch in a statement.
This round of mass layoffs began on Monday and many Nuverse members are still anxiously awaiting a verdict on their future, people familiar with the matter told TechCrunch. It’s unclear how many employees will eventually be affected by the restructuring, but Nuverse quickly grew to around 3,000 people in 2021 and has largely remained at that size in recent years, according to a Chinese tech news outlet. Late publication.
ByteDance has also spent heavily on acquisitions, including the $4 billion purchase of an up-and-coming Shanghai studio called Moonton. Reuters reported Earlier this month, the company is looking to sell the studio and met with a Saudi Arabia-based company for talks.
Reuters first technology/bytedance-wind-down-gaming-brand-nuverse-full-retreat-gaming-sources-2023-11-27/” target=”_blank” rel=”noopener”>bankrupt broke the news about the layoffs on Monday morning, reporting that ByteDance would soon announce the “liquidation of its Nuverse gaming brand and complete withdrawal from mainstream video games,” citing sources. But ByteDance’s comment suggests that parts of the equipment will be retained.
ByteDance’s debacle in gaming, and its virtual reality project Pico, casts doubt on the universal applicability of its data-driven A/B testing strategy that has catapulted TikTok to global dominance. Through its short video apps, ByteDance has amassed an unparalleled wealth of consumer insights. However, video game success requires a much longer and more patient creative process, and is arguably less predictable than the instant gratification provided by dopamine-infused video clips. Its two rivals, Tencent and NetEase, have been investing more resources in games with longer development cycles.
Without a breakthrough title or commercial success after two years, the company’s management team is likely taking a closer look at Nuverse’s positioning as one of ByteDance’s top revenue drivers. ByteDance remains one of the few Chinese internet giants that has not gone public, in part due to its involvement in rising tensions between the United States and China.
The mass layoffs at Nuverse add more bad news to the Chinese internet industry, which is reeling from a widespread regulatory crackdown in recent years, leading to deteriorating business and a drastic reduction in the workforce. The video game sector in particular was greatly affected by the interruption in the approval of licenses and, although the process has resumed, the recovery of the space has been limited by macroeconomic challenges.
