ByteDance boosts investment in video game platform in race with Tencent
ByteDance, the Chinese tech giant that owns TikTok, recently sued its larger rival Tencent (OTC:TCEHY) over alleged antitrust violations. ByteDance says Tencent blocked users on its WeChat and QQ apps — which host 1.21 billion and 617 million mobile monthly active users, respectively — from accessing content from Douyin, the Chinese version of TikTok.
In another high-profile acquisition last week, ByteDance acquired game studio C4 Games, the developer of Red Alert Online. Meanwhile, Tencent has already invested more in gaming studios this year than it did in all of 2020.
However, the battle for Moonton, the developer of team-battle game Mobile Legends: Bang Bang, came at a steep price, which two sources familiar with the deal said was worth US$4 billion. Accepting ByteDance’s offer also meant breaking one with Tencent that Moonton had signed just days before, according to the sources, who asked not to be identified.
Internet giant Tencent Holdings is merging its two video platforms in a major reorganisation to buttress its efforts against ByteDance-owned Douyin, the Chinese version of TikTok, according to sources familiar with the matter.
Roblox saw usage rise during the Covid-19 pandemic, and it has been regarded as one of the more exciting gaming companies to explode in popularity in recent years.
That popularity was rewarded by Wall Street last month when it went public on the New York Stock Exchange, where it had a market capitalisation of more than US$38 billion at the time of publication.
Tencent previously barred WeChat’s users from posting links to Jinri Toutiao’s news stories. Tencent also didn’t approve ByteDance’s WeChat Mini Programs for its cloud-based office platform, Feishu. That’s why it wasn’t surprising when Tencent finally cut its users off from Douyin’s videos.
Gaming has become a top priority for ByteDance. It has proven to be an effective way of monetising social media users from other apps – a strategy used by Tencent – and a steady stream of gaming revenue works as insurance against TikTok someday falling out of fashion.
Despite a growing gaming division with more than 3,000 new hires, ByteDance’s search for a flagship game was advancing at a snail’s pace. After a few of its self-developed titles flopped last year, experts said the social media firm needed a headlining purchase to reinspire confidence, according to analysts.
China had 818 million short video-sharing users at the end of June last year, according to a report by the China Netcasting Services Association. Douyin and Kuaishou Technology, which had about 300 million daily active users, were the dominant players in the market. Tencent is a major investor in Kuaishou.
The escalation of the rivalry between Tencent and ByteDance in gaming reflects the industry’s rapid growth in recent years. Nearly half of China’s population now plays video games, and the country is the world’s largest video game market in the world by revenue.
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