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ByteDance Sells Gaming Unit to Tencent-Backed Firm in Ongoing Industry Consolidation

ByteDance sells its gaming studio, C4Games, to a Tencent-backed subsidiary. The deal is valued at 259 million yuan (US$35.8 million). This follows ByteDance's previous divestments of two other gaming units to Tencent.

ByteDance, the parent company of popular social media platform TikTok, has made another move in its retreat from the gaming industry. The company has sold its gaming studio, C4Games, to a subsidiary of China Ruyi Holdings, a film and game production firm backed by Tencent. The deal, valued at 259 million yuan (US$35.8 million), highlights the ongoing consolidation in the gaming industry amidst weak consumer spending and regulatory uncertainties.


C4Games, which was acquired by ByteDance in 2021, is best known for its game "Red Alert Online," a derivative of the iconic 1990s American single-player game "Red Alert." This sale follows ByteDance's previous divestments of two other gaming units to Tencent earlier this year.


The consolidation trend in China's gaming industry, the world's largest by revenue, has been gaining momentum. ByteDance's decision to shut down unreleased gaming projects and sell off launched games, such as "Crystal of Atlan" and "Earth: Revival," reflects the challenging market conditions.


In January, ByteDance confirmed that it was in talks with multiple potential buyers for its gaming operations, with Tencent being one of them. The industry as a whole has been facing economic headwinds and regulatory pressures, leading to cost-cutting measures and layoffs across various companies.


Even Alibaba Group Holding's Lingxi Games has discontinued a game engine project aimed at simplifying game development. Similarly, Kuaishou Technology, China's second-largest short video platform operator, disbanded a gaming project in Beijing, resulting in job losses for around 30 employees.


In response to the changing landscape, Tencent's gaming unit has shifted its focus to supporting low- and medium-budget projects through its "spring bamboo shoots" initiative. This marks a departure from its previous emphasis on high-production-cost projects.


The National Press and Publication Administration, the regulatory body responsible for licensing video games in China, approved only 95 new titles in April, the smallest batch of approvals so far this year. This indicates a more cautious approach to game releases and further underscores the challenges faced by the industry.

 
  • ByteDance sells its gaming studio, C4Games, to a Tencent-backed subsidiary.

  • The deal is valued at 259 million yuan (US$35.8 million).

  • This follows ByteDance's previous divestments of two other gaming units to Tencent.


Source: SCMP

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