ByteDance has raised its gaming arm Nuverse through a hiring round and in March acquired the gaming studio Moonton.
GUANGZHOU, China – ByteDance has acquired a large mobile game studio Moonton, highlighting the ambitions of the video game industry and setting it against the Chinese giant Tencent.
ByteDance is known as the owner of TikTok or Douyin in China, and wants to diversify beyond advertising and take a piece of the mobile gaming market of 86 billion dollars, as well as expand its footprint internationally.
“Moonton is the perfect partner to expand our gaming strategy in international markets,” ByteDance said in a statement.
Reuters reported that the deal valued Moonton at $ 4 billion, citing two unnamed sources. ByteDance declined to comment on the value of the deal.
“This is a mega-deal in the global gaming industry, not just in China. So the M&A craze in the gaming sector continues, and I think ByteDance is still looking for other studios,” said Serkan Toto, CEO of consulting firm Kantan Games , told CNBC.
“Be prepared for a long war between Tencent and ByteDance to provide game content.”
ByteDance’s international press
Tencent is a world leader in mobile gaming and behind some of the top titles. It has managed to do this in recent years through acquisitions and strategic efforts in smaller companies, as well as developing its own titles. This has enabled Tencent to have a comprehensive portfolio of games that continue to raise money for the company.
It has also enabled Tencent to expand internationally, a feat that ByteDance also hopes to achieve.
Moonton is known for “Mobile Legends” a so-called multiplayer online battle arena (MOBA) game where teams fight against each other in large virtual arenas. Popular titles in this category include Tencent’s “Honor of Kings” and “League of Legends” developed by Riot Games.
“Mobile Legends” is popular in Southeast Asia. And ByteDance collaborated last year with the gaming company Gravity to release “Ragnarok X: Next Generation” in the region.
“Bytedance takes a global approach to its video game business from day one,” game analysis company Niko Partners wrote in a note to clients.
ByteDance runs short video app Douyin in China and TikTok in international markets. Last year, ByteDance said that Douyin had 600 million active users every day, and that TikTok had 700 million active users every month.
The company could use the social media platform to market games and attract users.
With Bytedance at the helm, the two companies (Moonton and ByteDance) were able to leverage TikTok / Douyin to market Mobile Legends in markets such as China and the US, where Tencent’s Honor of Kings and Riots’ League of Legends: Wild Rift is the dominant mobile MOBA. titles, “said Niko Partners.
But ByteDance may not be able to rely on acquisitions alone to succeed with games.
“The biggest challenge for Bytedance will be to create a self-developed hit that it can operate on in the long term. Therefore, it signs publishing agreements to publish games based on popular IP and acquire game development companies with a proven track record of success,” Niko Partners added.