ByteDance contemplates the sale of gaming arm Moonton amid shifting priorities

ByteDance, the tech giant behind the cultural phenomenon TikTok, is reportedly in the early stages of exploring the potential sale of its gaming subsidiary, Moonton Technology. This Shanghai-based studio gained recognition for creating the highly popular mobile game “Mobile Legends: Bang Bang.” As reported by Reuters, ByteDance’s move to consider parting ways with Moonton suggests a strategic reassessment, aiming to streamline its operations and refocus resources on its core business areas.

The acquisition of Moonton in 2021, valued at a substantial $4 billion, marked ByteDance’s ambitious entry into the competitive global video games market. However, recent reports indicate that Moonton’s post-acquisition performance has been somewhat underwhelming. The studio, known for its multiplayer online battle arena game, has struggled to replicate the success of “Mobile Legends” with another breakthrough title.

To reallocate resources more effectively, ByteDance has engaged in discussions with potential buyers for Moonton. Among the companies approached, at least one Saudi-based firm has reportedly been in talks with ByteDance. Despite these discussions, sources emphasize that the process is still in its infancy, and a definitive deal is far from guaranteed.

This potential divestiture aligns with ByteDance’s broader strategy to focus on its core competencies, possibly shedding non-core assets that have not met anticipated performance levels. ByteDance’s venture into the gaming sector has faced challenges, including the Chinese government’s regulatory crackdown on the video game industry shortly after acquiring Moonton. This regulatory intervention resulted in an industry-wide contraction, presenting additional hurdles for ByteDance’s gaming expansion.

Moonton Technology, boasting a global workforce exceeding 1,600 employees and an operational presence in various Asian markets, has played a notable role in the mobile gaming landscape. ByteDance’s contemplation of Moonton’s sale reflects the dynamic nature of the gaming industry and underscores the strategic adaptability required to navigate evolving market conditions.

Recently, TikTok’s sibling CapCut crossed the $100 million mark in user spending on both iOS and Google Play.