TikTok owner scales back its video game operation

ByteDance is the parent company of TikTok, the globally popular short-form video app. Especially popular with Generation Z, TikTok has become ubiquitous among teens and young adults, while its owner also wanted to grow his business by investing in video game development. Now, it seems that he is cutting back on this plan.

A year ago, the Beijing-based company was spending millions to get into the gaming business, while expanding its operations to diversify its revenue streams. But now ByteDance is “aggressively downsizing” its gaming division, according to the South China Morning Post (SCMP).

Related: More than half of young Chinese gamers adhere to government-set time limits


The SCMP report says this could affect hundreds of employees, and has meant the close closure of Shanghai-based Wushuang Studio, the closure of 101 Studio in June, and layoffs at Hangzhou-based Jiangnan Studio, with the Shanghai-based newspaper Hong Kong. citing sources familiar with the situation. However, ByteDance is not getting out of the gaming business entirely, as it will keep some offices running in Shanghai for projects that are already in development.

It comes amid macro trends in China’s video game industry, as giants such as NetEase and Tencent increasingly look to foreign markets to expand their business, while smaller operations try to navigate a restrictive regulatory environment. China’s authoritarian government has cracked down on a huge, once-growing industry to keep things under its control. It instituted a curfew on online gaming for minors, froze approvals of new games for many months, and censors scrutinize every detail of a game before allowing it to be sold.

ByteDance is one of China’s biggest success stories, having achieved international success with TikTok and troubling US rivals like Meta, which owns Instagram and Facebook. ByteDance had wanted to invest in games seeing the profits Tencent is enjoying, but with the new restrictive regulatory environment, it is probably looking to cut its losses.

But ByteDance isn’t the only social media company scaling back its gaming business. Only yesterday it came to light that Snapchat is laying off 20 percent of its staff and freezing its gaming division. While Snapchat may not have been very successful with games, ByteDance did have profitable titles, though these were mostly small, casual games that generated ad revenue. But his video game ambitions have now been drastically curtailed.

Next: Tekken Bloodline Needed To Be More Self Indulgent

Leave a Comment