ByteDance takes on Tencent with major gaming studio acquisition

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

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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 looking to diversify beyond advertising and take a slice 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 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 only within China. So the M&A craze in the gaming sector continues, and I believe ByteDance is still on the lookout for other studios,” Serkan Toto, CEO of consultancy Kantan Games, told CNBC.

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

ByteDance’s international push

Tencent is a world leader in mobile gaming and behind some of the top titles. It has managed to do this over the past few years via acquisitions and taking 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 rake in money for the company.

It has also allowed Tencent to expand internationally, a feat that ByteDance is also hoping to achieve.

Moonton is famous for “Mobile Legends” a so-called multiplayer online battle arena (MOBA) game 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 last year partnered with gaming firm Gravity to release “Ragnarok X: Next Generation” in the region.

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

TikTok leverage

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