It was clearly evident that Bytedance (TikTok owner) wanted to challenge Tencent who had been comfortably enjoying the top position in the gaming industry. To make this happen, Bytedance acquired a number of gaming studios, one of which was 101 Studios which was a product of the 2019 acquisition of Mokun Technology. And now, according to reports from Bloomberg, Bytedance has disbanded the Shanghai 101 Studios as a result of the expansion setback.
If you are an active internet user who consumes content and plays games, you will know two companies for sure, Bytedance and Tencent Holdings, and also their bitter rivalry. In the past few years, these two Chinese internet companies have been going all out to acquire the first spot, both companies have gone on a bidding rampage to acquire various Gaming Studios to become the best in the industry.
101 Studio disbanded after a crackdown on licensing by Chinese officials
In the battle to acquire the first position, Bytedance had gone all out to acquire a few gaming studios to be able to compete with Tencent on the biggest stage that exists. In March 2019, Bytedance acquired Mokun Technology from its previous owners 37 Interactive Entertainment for $16.4 million. This was one of the large-scale investments Bytedance made.
One of the popular ones among these was Moonton Technology, the creators of the mobile battle royale game Mobile Legends which is globally famous. Bytedance had long-term ambitions to take over the Chinese and SEA market and establish its dominance. Bytedance’s vision to make this happen was by entering the gaming market and disrupting it just like they did with TikTok as they knew that mobile gaming brings in huge chunks of revenue.
But, things didn’t go well for Bytedance as the Chinese officials started to levy heavy restrictions on content and licensing. This has resulted in games not being given licenses to enter the Chinese market. The year-long waits, coupled with the extremely stringent rules have resulted in a sluggish environment where games could not be approved to enter the market, and companies were pushed into an economic crisis.
This historic crackdown by Chinese officials has pushed big tech and internet companies into turmoil. Over the last year, Bytedance has had to shut down most of its online tutoring operations, followed by 101 Studios. The company also disbanded its venture investment team and sold off a stock-trading app. The situation has stunted the growth of the Chinese gaming industry, as the crackdown on licensing still continues. Experts think that this will push China into an era of slower growth and greater caution.
Bytedance to continue competing with Tencent even after the setback
Since the 101 Gaming Studios is disbanded by Bytedance, some workers from the studio will be transferred to Bytedance’s gaming division Nuverse, which focuses on casual games. Despite Nuverse creating several titles in genres like fighting and card games, they haven’t been able to get on the stage to compete with the giants like Tencent. Bytedance’s dream to expand beyond its main short video business has taken a blow with 101 Gaming Studios being disbanded, but that doesn’t mean that the company will stop competing with Tencent.
What are your thoughts as Bytedance owned 101 Studios get disbanded? Let us know in the comments below!