ByteDance expanded its Nuverse gaming arm through a hiring attempt and in March acquired the Moonton gaming studio.
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GUANGZHOU, China – ByteDance has acquired major mobile gaming studio Moonton, highlighting its ambitions in the video game industry and pitting it against Chinese giant Tencent.
Known as the owner of TikTok or Douyin in China, ByteDance is trying to diversify beyond advertising and take over a $ 86 billion share of the mobile gaming market, as well as expand its footprint internationally.
The ByversDance Nuverse gaming arm, founded in 2019, was behind the acquisition.
“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 transaction.
“This is a mega deal in the global gaming industry, not just in China. So the M&A craze in the gaming industry continues and I think ByteDance is still looking for other studios,” said Serkan Toto, CEO of Kantan Games. said CNBC.
“Be prepared for a long war between Tencent and ByteDance for the purchase of game content.”
The international impetus of ByteDance
Tencent is a world leader in mobile gaming and is behind some of the top titles. He has managed to do this in recent years by acquiring and taking strategic stakes in smaller companies, as well as developing his own securities. This has allowed Tencent to have an extensive portfolio of games that continue to make money for the company.
It has also allowed Tencent to expand internationally, a feat that ByteDance also hopes to achieve.
Moonton is famous for “Mobile Legends”, the so-called online multiplayer battle arena (MOBA) game, where teams fight each other in large virtual arenas. Popular titles in this category include “Honor of the Kings” and “League of Legends” by Tencent, which was developed by Riot Games.
“Mobile Legends” is popular in Southeast Asia. And last year, ByteDance partnered with gaming company Gravity to launch “Ragnarok X: Next Generation” in the region.
“Bytedance has been taking a global approach to its video game business since day one,” gaming analyst Niko Partners said in a note to customers.
TikTok lever
ByteDance operates the short video application Douyin in China and TikTok in international markets. Last year, ByteDance said Douyin had 600 million daily active users and TikTok had 700 million monthly active users.
The company could use the social networking platform to promote games and attract users.
“With Bytedance at the helm, the two companies (Moonton and ByteDance) could use TikTok / Douyin to promote Mobile Legends in markets such as China and the US where Tencent Kings Honor and League of Legends Riots: Wild Rift are the dominant mobile MOBA Titles” , said Niko Partners.
But ByteDance may not be able to rely solely on acquisitions to succeed in games.
“The biggest challenge for Bytedance will be to create a self-developed hit that can operate in the long run. Therefore, it signs publishing offers to publish popular IP-based games and acquires game development companies with a record proved successful, “added Niko Partners.