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ByteDance, creator of popular video-sharing app TikTok, aims to broaden its operations by building up its nascent video games business. Photo: Reuters

TikTok creator ByteDance said to name video games head, ramping up rivalry with Tencent

  • The appointment is expected to help ByteDance sharpen its efforts in the video games industry
Video gaming

China’s ByteDance, creator of global hit video-sharing app TikTok, will appoint an executive to exclusively lead its nascent video games business, sources said, signalling the firm’s growth ambitions in the sector and intensifying its rivalry with internet giant Tencent Holdings.

Yan Shou, the head of strategy, investment and gaming at ByteDance, will now focus wholly on the video games business, as the company sees it as the next important source of growth, with plans to roll out a game like Honour of Kings, according to one of the people, who asked not to be identified because the information is not public.

The move comes as the Beijing-based start-up, which was valued at US$78 billion in late 2018 and is backed by major investors including SoftBank Group Corp and KKR, is seeking to diversify its operations amid a US national security investigation into TikTok.

Gaming became strategically important for ByteDance a year ago and that division is working on several games simultaneously, according to separate people familiar with the matter.

ByteDance declined to comment. Yan did not immediately respond to an emailed request for comment.

How ByteDance is copying Tencent’s playbook to conquer gaming

Video games is seen as a steady revenue source, as users tend to keep playing popular titles for years. The industry has also received a boost in recent weeks after the coronavirus outbreak forced many Chinese residents to stay at home, driving up game downloads.

China’s gaming industry, the world’s biggest, is currently dominated by Tencent, which developed popular mobile game Honour of Kings and currently makes up over half of the market by sales, according to research firm Gamma Data. Other major players include NetEase.

An increased focus on gaming by ByteDance will heighten its competition with Tencent, with which it already competes in areas such as short video and music streaming.

Yan, a vice-president at ByteDance, reports to company founder and chief executive Zhang Yiming. Before ByteDance, Yan worked as a strategy manager at Tencent, according to his LinkedIn profile.

The personnel move also means that ByteDance needs a new vice-president to oversee its strategy and investment team. Currently, this team is run by two directors, and the situation is supposed to be temporary, according to one of the sources.

ByteDance first dipped its toes into gaming by launching so-called mini-games via Douyin, the firm’s Chinese version of short video app TikTok, in February of last year. For the mini-games built within Douyin, users do not need to download them separately and can just play within that app. Tencent was first in the market to create and launch mini-games.

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