ByteDance has invested in its mobile games business through key acquisitions and is seeing success outside of China.
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Chinese internet giant ByteDance’s nascent foray into gaming is showing promising signs, with spending on its mobile titles surging over the past year as it seeks to challenge rivals Tencent and NetEase.
The TikTok owner generated $1 billion in player spending on its mobile games between June 21, 2021 and June 20, 2022, a 16% increase from the same period last year, according to the company. Sensor Tower data analysis. This figure includes data from Apple’s App Store and Google Play, but not third-party Android stores in China.
ByteDance, best known for its short video app TikTok and the Chinese version Douyin, has sought to expand aggressively into mobile gaming, an area dominated by Tencent and NetEase in China. Earlier this year, ByteDance created an in-house gaming business unit.
Last year, ByteDance acquired major game studios Moonton and C4, helping to boost its overseas efforts by buying popular games as part of the deals.
The bulk of player spending was on games acquired by ByteDance. Moonton’s Mobile Legends: Bang Bang generated $317.7 million, or 32% of the $1 billion annual revenue, Sensor Tower said. C4’s Girls Chronicle: Idle Heroine is a close second.
“ByteDance’s offerings for Mobile Legends developer Moonton and Girls Chronicle studio C4 have been transformative,” Craig Chapple, mobile intelligence strategist at Sensor Tower, told CNBC via email.
“It has grown its game operations so quickly that it is already becoming a major mobile game publisher, especially in China and Asia. It still has a long way to go to catch up with heavyweights like NetEase and Tencent, of course, but it’s moving in the right direction.”
For comparison between June 21, 2021 and June 20, 2022, player spending on Tencent mobile games totaled $7.9 billion globally, while NetEase’s figure totaled $3.1 billion. , compared to $1 billion for ByteDance.
ByteDance has seen global success with its TikTok app, and the Beijing-based company is starting to see results in games through these acquisitions.
The company’s biggest markets are in Asia, with Japan accounting for 34% of gamer spending on its mobile titles, while China ranks second and the United States third, Chapple said.
“What I find most interesting is the importance of his agreements with Moonton and C4 in this international expansion,” he added.
Over the past year, the largest revenue market for Moonton’s Mobile Legends was the United States with over $50 million, according to data from Sensor Tower. C4’s Girls Chronicle: Idle Heroine, meanwhile, grossed $303.5 million during that time in Japan, according to the data.
International expansion is key for ByteDance as Chinese regulators have tightened scrutiny of the domestic gaming industry. Last year, Beijing said children under 18 were only allowed to play online games for up to three hours per week. And China’s gaming industry is just emerging from a months-long approval freeze. In China, games need regulatory approval to be monetized.
The stringent measures have hit Chinese gaming giants, with Tencent posting its slowest ever revenue growth in the second quarter of the year.
Both Tencent and NetEase have looked to international markets to expand, a tactic ByteDance appears to be replicating amid regulatory headwinds at home.
“The company has spent the last year growing its operations both in China and internationally. In the face of regulatory challenges in China, we could see ByteDance join Tencent and NetEase and expand its operations internationally, which the company already has tremendous experience and success with TikTok,” Chapple said.