TikTok parent ByteDance has now become the latest company to enact layoffs. According to media reports, the powerhouse behind TikTok is set to wind down its gaming arm, including the well-known Nuverse brand. This strategic shift follows layoffs in ByteDance’s VR division Pico, earlier this month.
While an exact number of layoffs have not been officially confirmed, a report by Bloomberg reveals that hundreds of jobs will be cut in the gaming division as part of the restructuring process. Other reports confirm the number to be around 700 employees within ByteDance’s gaming business group. This includes the termination of ongoing projects, highlighting a comprehensive scaling back of operations within Nuverse.
Nuverse was acquired by ByteDance in 2017 and has been a linchpin in the company’s ambitious foray into the gaming industry. Responsible for overseeing prominent titles like Marvel Snap and Ragnarok X: Next Generation, Nuverse epitomized ByteDance’s attempt to challenge the supremacy of established gaming giants, notably Tencent. However, ByteDance’s decision to wind down Nuverse signals a re-evaluation of its gaming pursuits. Apart from the layoffs, ByteDance will also shut down several projects that are currently under development, as well as weigh the potential sales of existing titles.
“We regularly review our businesses and make adjustments to center on long-term strategic growth areas. Following a recent review, we’ve made the difficult decision to restructure our gaming business,” a spokesperson for ByteDance commented on the matter.
Reports indicate that ByteDance’s CEO, Liang Rubo, expressed dissatisfaction with Nuverse’s lack of focus and misallocation of resources. Despite apparent success in gaming titles, ByteDance found itself at a crossroads, prompting a strategic reassessment. It seems that the strategic restructuring is not merely a response to internal challenges but also rooted in financial considerations. ByteDance’s Douyin and advertising businesses significantly outshone the gaming division in terms of revenue. ByteDance’s strategic endeavors in gaming were significantly shaped by acquisitions, with the notable purchase of Moonton in 2021 for a reported $4 billion. Moonton, a high-profile gaming studio, is now reportedly up for sale, adding an element of uncertainty to ByteDance’s gaming ventures. The fate of Moonton exemplifies the dynamic nature of ByteDance’s strategic priorities.
ByteDance’s retreat from gaming sheds light on the formidable competition posed by industry behemoths, particularly its own homegrown competitor, Tencent. Despite substantial investments aimed at challenging Tencent’s market dominance, ByteDance faced formidable challenges in gaining significant market share. The gaming industry’s rapidly evolving dynamics, coupled with regulatory considerations, also played a role in shaping ByteDance’s strategic pivot. In response to inquiries, ByteDance officially communicated its decision to restructure its gaming business. The statement emphasized a commitment to “long-term strategic growth areas” but refrained from providing specific details.