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China’s gaming market, which has fared significantly better compared to 2022, is expected to exceed $47 billion this year. That’s thanks in most part to the stabilized flow of game approvals from the country’s regulator. But after two years of ambitiously pursuing the gaming industry, ByteDance, the Chinese parent company of TikTok, is letting go of its gaming market share.
Nuverse, the gaming branch of ByteDance, is laying off hundreds of its employees in a “restructuring” move following “a recent review.” The unit launched just in 2019 and has taken strides in the mobile and web games market since, acquiring Chinese RPG developer C4games and Moonton in 2021 and pumping billions into expansion. Since, it has released several titles, with Marvel Snap and Crystal of Atlan as its top hits.
Marvel Snap, released a year ago, is a simple digital card game with new perks added monthly to keep players interested. The game is free to play, runs a credit system for card upgrades and has developed its own fan community. On PC, Marvel Snap currently counts 5,700 players present at a time on average, according to Steam Charts.
Unlike Marvel Snap, developed by Nuverse’s partners, the action role-playing game Crystal of Atlan was built in-house. And the anime-style game has made China’s top 10 best-selling mobile games earlier this year, thanks to ByteDance’s heavy marketing via Douyin, TikTok’s domestic version, and other game platforms like Huya. It was also Crystal of Atlan that doubled Nuverse’s monthly revenue upon its release on iOS in July – and the game ranked 11th among China’s top revenue-generating mobile games in September.
However, after all this time, Nuverse has not reached commercial success. Claims that ByteDance would rival Chinese gaming giants Tencent and NetEase proved futile.
Over the past few years, China undertook a massive crackdown on tech monopolies across the board, imposing fines. Among other things, it cranked down on the game market as it addressed the growing cases of myopia and gaming addiction. Specifically, the restrictions included weekly game time limits for minors – though the link between gaming and near-sightedness is yet to be set in stone.
In 2022, the market experienced a first-ever decline, down 2.5% year-over-year. However, the regulator has eased its hold lately: in 2023, 844 video games were greenlighted already, compared with 512 for all of 2022 and 755 titles in 2021.
It would seem like the time to grow is now for Nuverse, but ByteDance decided otherwise. The company told Reuters: “We regularly review our businesses and make adjustments to center on long-term strategic growth areas. Following a recent review, we've made the difficult decision to restructure our gaming business."
And this came quite unexpectedly for Nuverse’s 3,000 employees, now in limbo. Reportedly, the company will let go of 1,000 of its game makers by December. We could say the move repeats Nuverse’s big downsizing a year ago at its Hangzhou and Shanghai locations, but this time the company also seeks to divest its games to other publishers and is reportedly considering selling Moonton. In the meantime, Nuverse’s games will continue to operate.
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