ByteDance has been raising its Nuverse gaming arm through a hiring storm and in March acquired the Moonton gaming studio.
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GUANGZHOU, China – ByteDance has acquired the largest 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 wants to diversify beyond advertising and take a share of the $ 86 billion mobile gaming market, as well as expand its footprint internationally.
ByteDance’s gaming arm, Nuverse, founded in 2019, was behind the acquisition.
“Moonton is the perfect partner to help expand our gaming strategy to international markets,” ByteDance said in a statement.
Reuters reported that the deal values Moonton at $ 4 billion, citing two unnamed sources. ByteDance declined to comment on the value of the deal.
“It’s a mega deal in the global gaming industry, not just in China. So the fashion for mergers and acquisitions in the gaming industry continues and I think ByteDance is still looking for other studios,” he said. 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 drive
Tencent is a world leader in mobile gaming and is behind some of the best titles. It has achieved this in recent years through acquisitions and strategic stakes in smaller companies, as well as developing its own titles. This has allowed Tencent to have an extensive portfolio of games that continue to accumulate 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 game (MOBA) where teams fight each other on large virtual stages. The most 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 last year ByteDance partnered with gaming firm Gravity to launch “Ragnarok X: Next Generation” in the region.
“Bytedance has taken a global approach to its video game business from day one,” game analysts firm Niko Partners wrote in a note to clients.
Take advantage of TikTok
ByteDance operates the Douyin short video app 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 leverage TikTok / Douyin to promote Mobile Legends in markets such as China and the United States, where Tencent’s Honor of Kings and Riots: Wild Legends League Rift is the dominant mobile MOBA Securities, ”said Niko Partners.
But ByteDance may not be able to rely solely on acquisitions to succeed in gaming.
“Bytedance’s biggest challenge will be to create a self-developed success that can operate in the long run. That’s why it’s signing publishing agreements to publish popular IP-based games and acquiring game development companies with a proven track record. , “Added Niko Partners.