TikTok creator ByteDance snaps up the maker of the biggest mobile game in Southeast Asia, putting on an esports collision course with Tencent

ByteDance is acquiring Moonton Technology for an undisclosed amount amid an ongoing lawsuit with Tencent, which alleges intellectual property infringement

Moonton’s Mobile Legends: Bang Bang is one of the biggest mobile games in Southeast Asia, where Tencent has struggled to make headway with Honour of Kings

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ByteDance headquarters in Beijing. ByteDance has long sought to rival Tencent in gaming, and it recently made its biggest acquisition yet towards that end. Photo: AFP

Published: 5:00am, 23 Mar 2021Updated: 5:51am, 23 Mar 2021

TikTok maker ByteDance announced on Monday its biggest video game acquisition to date with Moonton Technology, which is being bought for an undisclosed amount by the company’s Nuverse studio, netting the tech giant one of the biggest mobile games in Southeast Asia as it seeks to rival Tencent Holdings as an equal in the industry.

Moonton is the maker of Mobile Legends: Bang Bang, which surpassed 1 billion downloads in November, according to the company. The acquisition gives ByteDance what could be its first esports-calibre title, something it has been lacking as it has sought to monetise its large social media user base through other channels, a strategy successfully deployed by Tencent.

“Moonton is definitely ByteDance’s best purchase as yet, whether in terms of scale or reputation in the industry,” said Liao Xuhua, a gaming analyst with Beijing-based market research firm Analysys. “In the short term, Moonton can very effectively strengthen ByteDance’s gaming business.”

The acquisition of the Shanghai-based studio is a pointed addition in ByteDance’s fight against Tencent. Moonton was created by former Tencent employee Xu Zhenhua, who was forced to pay Tencent 19.4 million yuan (US$3 million) in 2018 as compensation for breaking a non-compete clause in his contract with his former employer.

Tencent’s fight with Moonton continues in a separate lawsuit in Shenzhen, which alleges Mobile Legends violated its intellectual property from hit titles Honour of Kings and League of Legends. The case opened in September 2018, and Moonton later attacked the judge in an open letter, accusing him of being influenced by Tencent. No ruling has yet been made.

The dispute between Moonton and Tencent has remained one of the most eye-catching lawsuits in China’s gaming industry. The ByteDance acquisition extends a lifeline to Moonton, and the company is likely shelling out billions of dollars for the privilege.