According to Nikkei Asia, which cited people familiar with the situation, Titok’s parent firm ByteDance plans to lay off some 1,000 workers in its gaming division, Nuverse, signaling a major reorganization effort in what was formerly seen to be a critical section for the Chinese internet behemoth.
Details on Bytedance, the parent company of Tiktok, plans to eliminate 1000 positions in its gaming division, Nuverse
According to a report citing a source, ByteDance will stop working on unreleased games as part of the shakeup, with the exception of a small number of creative projects. Although it is looking into divesting options, the business intends to keep running its current titles.
The decision is the result of ByteDance’s belief that the gaming division is unfocused and has little opportunities for game monetization. ByteDance intends to focus on its core operations instead, which include e-commerce endeavors, its Chinese equivalent Douyin, and the well-known short-video platform TikTok.
It should be mentioned that Since 2016, ByteDance has made significant investments in the gaming industry with the goal of competing with Tencent Holdings, the largest gaming firm in the world by revenue. ByteDance is believed to have invested over 30 billion yuan ($4.2 billion) in around 19 gaming startups between 2019 and 2022.
But in the second half of 2021, ByteDance started making big cuts to its gaming business due to underwhelming performance. Significant layoffs occurred at Nuverse, a game brand ByteDance launched in 2019 to expand globally, in the preceding year. In addition, poor performance led to the dissolution of one of its main game studios.
ByteDance issued a statement in response to the gaming industry’s reorganization, stating, “We routinely assess our operations and make adjustments to focus on long-term strategic growth areas. We’ve taken the tough choice to reorganize our gaming company after a recent evaluation.”
According to the source, ByteDance’s virtual reality unit Pico, which is having trouble with sales both domestically and internationally, lay off 23% of its personnel this month, or roughly 300 individuals.
This action is taken in the midst of greater difficulties facing China’s gaming industry, which is dealing with the fallout from the global economic crisis. ByteDance is increasing its research into generative AI, but it is also cutting back on its gaming efforts, in line with other large Chinese tech companies.
Though ByteDance’s huge language models—a generative AI basic technology akin to OpenAI’s ChatGPT—have been revealed somewhat slowly, the company’s AI division, Flow, has been quickening the creation of applications to be integrated into ByteDance products.
ByteDance has joined Tencent and Alibaba Group Holding in the competitive workplace chatbot market with the release of the AI bot Doubao in August and the integration of an AI assistant into Feishu, an office tool, this month.