Around noon on Monday, ByteDance officially announced that “the gaming business under Nuverse is going to undergo a massive business contraction.”
Specifically, games that have already been launched and are performing well will seek to spin off while ensuring operation; projects that have not yet been launched, except for a few innovative projects and related technical projects, will all be shut down.
Nuverse further stated that it will adjust its business direction and organization, and will focus more on the exploration of innovative games and related technologies. At the same time, Nuverse will continue to operate the products that have been launched to fully protect the rights and interests of players.
Over the past few years, ByteDance has acquired several gaming companies and has studios in Hangzhou, Shanghai, Beijing, and Shenzhen, all under the brand of Nuverse. However, Nuverse’s contribution to ByteDance’s revenue, profit, and user growth has been relatively limited in the past few years, making it difficult to bear the responsibility of a strategic business unit. Last week, Pandaily reported that ByteDance plans to sell Moonton, a game studio it just acquired in 2021, for $5 billion.
Chinese gaming blogger Gamelook believes that one of the main reasons for recent layoffs in ByteDance’s gaming business is that Zhang Yiming does not want to invest resources in game development and distribution, due to its limited contribution to the company.
The layoffs at Nuverse, however, does not mean that ByteDance’s presence in the domestic gaming industry has diminished. Even if Nuverse’s self-research and distribution teams have undergone major adjustments, it has not affected ByteDance’s advertising sales to gaming companies. “It only means that ByteDance has given up the pursuit of a closed-loop model”, wrote Gamelook.
In addition, ByteDance is preparing for an IPO and needs to present better profitability. In the face of slowing growth both domestically and internationally, cost reduction and profit realization are necessary choices to persuade investors.
SEE ALSO: ByteDance’s PICO Announces Lay-off Plans