TikTok parent company ByteDance, has reportedly laid off hundreds of workers in its Gaming unit known as Nuverse, and has withdrawn entirely from the mainstream video game industry.
Speaking on the closure of its gaming unit, a spokesperson at the company said,
“We regularly review our businesses and make adjustments to center on long-term strategic growth areas. Following a recent review, we have made the difficult decision to restructure our gaming business”.
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The Chinese tech giant added that it has no plan to return to the $185 billion global video gaming industry. In addition to the closure of Nuverse, ByteDance is looking into divesting from already launched games. Earlier this month, it was reported that the company was seeking buyers for its game development subsidiary, Moonton Technology.
ByteDance has also restructured its virtual reality firm, Pico, significantly downsizing its content team. However, amidst the restructuring at the company, gaming brand Ohayoo and casual games on TikTok, as well as Douyin will not be impacted by these changes.
The recent rounds of layoffs at the ByteDance gaming unit commenced on Monday, and many workers are still anxious to know the outcome of the restructuring process.
It is however unclear how many workers are affected by the current layoffs, meanwhile, Nuverse was reported to have grown to around 3,000 workers in 2021 and has largely maintained that number over the past few years.
ByteDance launched Nuverse in 2019, which is behind mobile card games such as Marvel Snap and Warhammer 40,000. But its performance during its initial launch was not impressive which saw it come into focus again in 2021 when ByteDance formalized its status as one of its six business units under a broader structural overhaul.
Without a breakthrough title and commercial success after two years, Nuverse’s positioning as one of ByteDance’s key revenue drivers came under close examination by the firm’s management team, hence the decision to shut it down.
The mass layoffs at Nuverse are said to have caused a panic in the Chinese internet industry which is reeling from a widespread regulatory crackdown in recent years, leading to dampened businesses and slashed workforces.
It is also worth noting that the Chinese video gaming sector has come under heavy pressure lately, as regulators are looking to clamp down on illegal games that contain pornography, gambling, violence, and content deemed inappropriate by Beijing, including titles that rewrite history.
Also, China is calling for game developers to have a stronger sense of social responsibility, especially when it comes to protecting minors from addiction and illegal content.