ByteDance strengthened its Nuverse gaming arm through a lease and acquired the gaming studio Moonton in March.
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GUANGZHOU, China – ByteDance has acquired a large mobile game studio in Moonton, highlighting its ambitions in the video game industry and against Chinese giant Tencent.
Known as the owner of TikTok or Douyin in China, ByteDance is looking for a variety of ads and part of the $ 86 billion mobile gaming market, as well as expanding its footprint internationally.
At the time of purchase, Nuverse, founded in 2019, had Nuverse’s player arm.
“Moonton is the perfect partner to expand our gaming strategy in 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 transaction.
“This is a mega-deal in the global gambling industry, not just in China. So the M&A craze in the gambling industry continues, and I believe ByteDance is still looking for other studios,” said Serkan Toto, CEO of Kantan Games, told CNBC.
“Be prepared for a long war between Tencent and ByteDance to get game content.”
ByteDance’s international press
Tencent is a world leader in mobile gaming and behind some of the top titles. The company has achieved this over the past few years through acquisitions and strategic interests in smaller businesses as well as the development of own titles. This has enabled Tencent to have an extensive portfolio of games that still raise money for the company.
It has also enabled Tencent to expand internationally, an achievement that ByteDance also hopes to achieve.
Moonton is known 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” 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 industry from day one,” game analyst Niko Partners wrote in a note to clients.
TikTok lever
ByteDance operates a short video app Douyin in China and TikTok on international markets. Last year, ByteDance said that Douyin has 600 million active users daily and that TikTok has 700 million active users monthly.
The company can use the social media platform to promote games and attract users.
With Bytedance at the helm, the two companies (Moonton and ByteDance) can use TikTok / Douyin to promote 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 be successful in the game.
“The biggest challenge for Bytedance will be to create a self-developed hit that can use it in the long run. Therefore, it signs publishing offers to publish games based on popular IP and acquire game development companies with a proven track record of success, “Niko Partners added.