After two ambitious years, TikTok parent ByteDance has begun a number of layoffs

ByteDance’s gaming ambition is an expensive, short-lived pursuit.

In late 2021, TikTok’s parent’s plans for video games came under fire after it became one of the company’s six main business units, posing a new threat to incumbents. such as Tencent and NetEase and the rising star MiHoYo. However, after two years of strong performance, the gaming division, called Nuverse, has significantly slowed down its operations in a move that shocked many employees.

“We are constantly reviewing our businesses and making changes to focus on long-term strategic growth areas. Following a recent review, we have made the difficult decision to restructure our business in play,” a ByteDance spokesperson told TechCrunch in a statement.

This round of mass layoffs began Monday and many Nuverse members are anxiously awaiting a decision on their future, people familiar with the matter told TechCrunch. It’s unclear how many employees will be affected by the change in the long run, but Nuverse has grown rapidly to nearly 3,000 people in 2021 and has largely remained that size for the past few years, according to Chinese tech news outlet. LatePost.

ByteDance has also spent heavily on acquisitions, including a $4 billion purchase of a promising Shanghai-based studio called Moonton. Reuters reported It was earlier this month that the company looked at the removal of the studio and met with a company based in Saudi Arabia for discussion.

Reuters first broken news about the layoffs Monday morning, reporting that ByteDance will soon announce “discontinuation of its Nuverse gaming brand and complete withdrawal from mainstream video games,” citing sources . But ByteDance’s comments suggest that parts of the team will be retained.

ByteDance’s debacle in video games — and its virtual reality effort Pico — cast doubt on the universal applicability of its data-driven, A/B testing strategy that propelled TikTok to global dominance. Through its short video apps, ByteDance has amassed an unparalleled wealth of consumer insights. Success in video games, however, requires a longer, more patient creative process and may be less predictable than the instant gratification provided by dopamine-laced video clips. Both of its rivals Tencent and NetEase pour more resources into games with longer development cycles.

Without a title of success or commercial success after two years, Nuverse’s positioning as one of ByteDance’s main revenue drivers is likely to be under scrutiny by the company’s management team. ByteDance remains one of the rare Chinese internet giants that hasn’t gone public, in part because of its involvement in rising US-China tensions.

Nuverse’s mass layoffs add to a flurry of bad news in China’s internet industry, which has been reeling from a widespread regulatory explosion in recent years, which has led to run-down businesses and shrinking worker. The video gaming sector in particular has been hit by a hiatus in license approvals, and although the process is ongoing, the space is recovering. limited by macroeconomic challenges.

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