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TikTok parent company, ByteDance, has invested billions of dollars in its gaming division called Nuverse since its launch in 2019. The investment was considered a strategic move to challenge domestic market leaders like NetEase and Tencent. However, after a recent review, the company has decided to restructure its gaming division. Hundreds of jobs are expected to be cut because of the restructuring drive.

TikTok Parent Company ByteDance Expected To Cut Hundreds Of Jobs In Gaming Division

“We regularly review our businesses and make adjustments to center on long-term strategic areas,” said a ByteDance spokesperson. “Following a recent review, we’ve made the difficult decision to restructure our gaming business.”

According to sources familiar with the matter, ByteDance asked employees to pause work on all unreleased games by December. Also, the company said that it would look for ways to divest from titles already launched, according to a Reuters report.

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Some of the affected employees learned their fate over the weekend. Reports also claim that ByteDance has no plans of playing further roles in the $185 billion global games market. The sources declined to be mentioned in the report since they were not allowed to publicly speak about the information.

TikTok Parent Company ByteDance Expected To Cut Hundreds Of Jobs In Gaming Division

Ohayoo, a casual gaming brand featuring games on TikTok’s sister app Douyin will not be affected. Also, casual games that run on TikTok will not be affected according to one of Reuter’s sources. The rise and fall of Nuverse will add more numbers to the already sour 2023 layoff count.

Nevertheless, Nuverse’s fairytale story has further shown how difficult competing in the gaming industry can be. Earlier this month, Reuters reported that ByteDance was seeking buyers for its game-developing subsidiary, Moonton Technology which it acquired in 2021 for $4 billion. Also, the company restructured its virtual reality company, Pico, making several roles redundant in the process.  

ByteDance will not completely shut Nuverse

TikTok Parent Company ByteDance Expected To Cut Hundreds Of Jobs In Gaming Division

Experts believe that shutting down Nuverse was only a matter of time considering its poor performance that doesn’t quite justify the billions of dollars that ByteDance has pumped into it. The only standout game that Nurverse can brag about is Marvel Snap, an online card game that garnered sizable followers—but not enough to be considered a commercial hit.

Crystal of Atland and The Voyage also released by Nuverse were mostly unnoticed. In 2021, Nuverse made headlines when ByteDance formally made it one of its six business units under a broader structural overhaul. To quickly attain production capacity, Nuverse acquired external studios including C4games.

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A source who refused to be named told CNBC that Nuverse will not be completely shuttered. However, operations in the gaming division will be significantly scaled back.

It’s also possible that ByteDance was a victim of government policy that clamped down on video games for several months. The government crackdown only started to ease in the past few months. To date, China’s gaming market is yet to achieve its record COVID-19 heights—when people mostly stayed indoors.

TikTok Parent Company ByteDance Expected To Cut Hundreds Of Jobs In Gaming Division

To achieve success in the gaming sector, companies rely on a steady stream of hits, particularly titles that keep players hooked. For example, Tencent which operates WeChat, the all-in-one app, publishes Honor of Kings which is a commercial success in the country.

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Nuverse’s role-playing action game Crystal of Atlan struggled to retain a large audience—which also meant a shortfall in revenue. There are those who believe the gaming industry is overcrowded and too many games are being released annually making it harder for players to keep up.

This year, several big studios across the globe have announced layoffs and a few have been shut down. Rarely does a week pass without the news of a layoff in one studio or another making headlines—and ByteDance has received the baton for this week. Who knows the next company that will take the baton from them?

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