Tencent snaps up some of ByteDance’s ditched video gaming projects amid industry consolidation, people say

LightSpeed Studios has absorbed a project in Shenzhen previously owned by ByteDance’s Gravity Studio
A company named Saluosi has been set up for the two projects, with former ByteDance employees from Nuverse joining

Video gaming

Iris Dengin ShenzhenandKelly Le

Published: 10:00pm, 14 Mar 2024

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Tencent Holdings, operator of the world’s biggest video gaming business by revenue, has taken over some of TikTok owner ByteDance’s ditched gaming projects as the industry continues its consolidation amid ongoing weakness in consumer spending and regulatory uncertainties.

LightSpeed Studios, one of Tencent’s key gaming units and the maker of popular title PUBG Mobile, has absorbed a project in Shenzhen previously owned by ByteDance’s Gravity Studio and an open-world project belonging to ByteDance’s Jiangnan Studio in Hangzhou, according to people familiar with the matter.

Both projects are anime titles, according to the people, who declined to be identified.

A company named Saluosi has been set up for the two projects, with former ByteDance employees from its main gaming unit Nuverse studio joining the new venture, according to the people. Business registration information platform Tianyancha showed that Saluosi, established in December 2023, is 100 per cent owned by Tencent.

Tencent did not immediately respond to a request for comment. ByteDance declined to comment.

The move signals a further consolidation of the gaming industry in China, which is the world’s biggest gaming market by revenue, after the retreat of ByteDance in late 2023.

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ByteDance set up Nuverse in 2019 to focus on self-developed “hardcore” games. However, in November last year the company decided to shut down most game projects that had not been released online and tried to find a way to sell titles that had been launched, which included an anime-style role-playing game Crystal of Atlan and sci-fi survival game Earth: Revival.

The restructuring came a year after ByteDance cut hundreds of jobs at two gaming studios under Nuverse – Wushuang in Shanghai and Jiangnan in Hangzhou – according to a previous Post report.

In January this year, ByteDance confirmed it was in talks with multiple potential buyers for its video game operations, including Tencent.

The industry has seen a wave of cost-cutting and lay-offs amid economic headwinds and regulatory pressures. In January, the gaming unit of Tencent launched a “spring bamboo shoots” initiative to support low- and medium-budget projects, in a change from a previous focus on projects with heavy production costs, according to industry blog Youxiputao.

The National Press and Publication Administration, the regulator in charge of licensing video games in China, approved 111 new titles in February, including the highly-anticipated Black Myth: Wukong, an action role-playing game developed by Hangzhou-based studio Game Science.

Tencent did not receive a licence in the February batch of approvals, but it was granted a licence for a mobile game developed in collaboration with America’s National Basketball Association in January.

The regulator approved 115 new video game titles in January, the largest batch of approvals in 18 months, in a supportive gesture after the retraction of severe regulatory proposals that hit gaming stocks, such as Tencent and NetEase.

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