ByteDance Faces Tencent With Major Gaming Studio Acquisition

ByteDance has been boosting its Nuverse gaming division through a hiring spree and in March it acquired gaming studio Moonton.

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GUANGZHOU, China – ByteDance acquired leading mobile game studio Moonton, highlighting its ambitions in the video game industry and pitting it against Chinese giant Tencent.

ByteDance, known as the owner of TikTok or Douyin in China, is looking to diversify beyond advertising and grab a slice of the $ 86 billion mobile gaming market, as well as expand its presence internationally.

ByteDance’s gaming division Nuverse, founded in 2019, was behind the acquisition.

“Moonton is the perfect partner to help expand our gaming strategy in international markets,” ByteDance said in a statement.

Reuters reported that the deal valued Moonton at $ 4 billion, citing two unidentified sources. ByteDance declined to comment on the value of the deal.

“This is a mega deal in the global gaming industry, not just within China. Therefore, the M&A craze in the gaming sector continues, and I think ByteDance is still looking for other studios,” Serkan Toto , CEO of consulting firm Kantan Games, told CNBC.

“Be prepared for a long war between Tencent and ByteDance to acquire game content.”

ByteDance’s international push

Tencent is a world leader in mobile games and is behind some of the best titles. It has managed to do this in recent years through acquisitions and strategic holdings in smaller companies, as well as developing its own titles. This has allowed Tencent to have a broad portfolio of games that continue to make money for the company.

It has also enabled Tencent to expand internationally, a feat ByteDance hopes to achieve as well.

Moonton is famous for “Mobile Legends”, a multiplayer online battlefield game (MOBA) where teams fight each other in large virtual arenas. Popular titles in this category include Tencent’s “Honor of Kings” and “League of Legends,” which was developed by Riot Games.

“Mobile Legends” is popular in Southeast Asia. And ByteDance partnered with gaming firm Gravity last year to launch “Ragnarok X: Next Generation” in the region.

“Bytedance is taking a global approach to its video game business from day one,” wrote gaming analyst firm Niko Partners in a note to clients.

TikTok leverage

ByteDance operates short video app Douyin in China and TikTok in international markets. Last year, ByteDance said that Douyin had 600 million daily active users and that TikTok had 700 million monthly active users.

The company could use the social media platform to promote games and attract users.

“With Bytedance at the helm, the two companies (Moonton and ByteDance) could leverage TikTok / Douyin to promote Mobile Legends in markets such as China and the US, where Tencent’s Honor of Kings and Riots’s League of Legends: Wild Rift are mainstream mobile devices. MOBA titles, “said Niko Partners.

But ByteDance may not be able to rely solely on acquisitions to be successful in games.

“The biggest challenge for Bytedance will be creating a self-development success that can operate for the long term. Hence, it is signing publishing deals to publish popular IP-based games and acquiring game development companies with a proven track record of success. “. “Added Niko Partners.


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