TikTok's owner ByteDance has launched a new website for its gaming studio Nuverse Games, outlining its portfolio of nine published mid- and hardcore games. The brand focuses on games development and distribution for international markets, with the purpose of "offering top-tier games, building a global community, and providing fun and inspiring experiences for every gamer", according to Nuverse.

Headquartered in Beijing, ByteDance is currently the world's most valuable tech unicorn, owning short-form video sharing platform TikTok (or Douyin in China), news platform Toutiao, professionally generated content (PGC) video app BuzzVideo and other influential products. It continues to expand globally, with its killer app TikTok getting more and more favoured by the younger generations. 

ByteDance has been trying to enter the lucrative gaming business, and it has made some progress since the launch of its first casual game in 2018, but its titles still can't outperform the veterans such as Tencent and NetEase in China. 

ByteDance has established a multi-brand strategy for its gaming business

The new site is a consolidation of ByteDance's existing gaming brands. Ampere Analysis has found that several mobile titles which were once released outside China by publishers called PixDance and FireForce Game Studio are now under the new label. This makes ByteDance's once-secretive gaming business clearer to the public:

•    Nuverse Games is responsible for publishing midcore and hardcore games for ByteDance, some of which are developed by one of the studios it owns, for example, Wushuang Studio, One Zero One Studio or Oasis Studio.

•    Ohayoo is a publisher of casual and hyper-casual games that takes advantage of ByteDance's online advertising platform. It has published more than 150 games, most of which are monetised solely by in-game advertising.

•    Pixmain, an indie game publisher first announced in November 2020, is currently working on a pipeline that contains 5 indie games.

•    Danjuan (Egg Roll) Games is a mobile casual game distribution platform that incorporates both social features and user-generated content, similar to Valve's Steam concept.

•    Bytedance also owns a cloud gaming platform, Aoli Games, which launched its beta test on Android and iOS in January 2021.

Besides, ByteDance has invested in four different games studios in 2020, three of which are targeting overseas markets, namely C4games, Mybo, and Gravity (Shanghai). 

Tencent and NetEase are formidable competitors

It has been three years since ByteDance's foray into the games industry, and its business model and value chains are emerging. However, the performance of its products is still not commensurate with the huge investment that ByteDance has made. It is still waiting for a truly standout title, especially when it comes to self-developed midcore and hardcore games.

Despite the lack of convincing gaming products, ByteDance has been expanding its gaming business aggressively since 2020, and the business layout suggests that it is learning from Tencent's path to success, which benefited from the userbase of a huge social network. Tencent also sees ByteDance as one of its major competitors. It has restricted users from sharing content from Douyin on its instant messaging app WeChat and QQ, which led to Douyin suing Tencent for monopolistic behaviour. Since 2020, Tencent has been also accelerating its investment in small and medium-sized studios; firing up its resources against ByteDance. 

Meanwhile, the Chinese games market is not what it was when Tencent started its gaming business: it grew and thrived from the distribution of Korean online games such as Dungeon and Fighter and Crossfire, it lacked competition, and gamers desperately needed high-quality game products. Now, China is one of the world's largest and most competitive markets. The two largest gaming giants, Tencent and NetEase, share nearly 80% of the market and have built top-tier R&D teams especially for mobile games. ByteDance needs to break through these barriers in terms of brand name, talent acquisition, technology and IP partnerships.

ByteDance's core competencies may be the key to achieving its ambitions

Bytedance also has its advantages. It is more international than any other Chinese Internet giant, with its main business generating a constant, global cash flow to fund its expansion in all areas. ByteDance has pulled in $37bn in revenue in 2020, and more than doubled what it earned in 2019, according to The Information. The largest contributor was its advertising business. 

In addition, ByteDance is still hiring aggressively, with headcount reaching 100,000 at the end of 2020. Its gaming division was reported to have 3,000 employees in March 2021, more than doubled its size within a year. 

ByteDance also owns Ocean Engine, an integrated online advertising platform based on its huge userbase across services, which has become an important channel for companies (including Tencent) to advertise their games, given the overwhelming popularity of its short-form video apps. How to leverage these commercial weapons will be the key to the success of ByteDance's gaming business.

Table: ByteDance's lineup of published mid- and hardcore games