ByteDance’s Gaming Gambit: Can TikTok’s Parent Rebuild its Game Empire?

Okay, grab a virtual cup of coffee (or maybe some Longjing tea, since we’re setting the scene here in China), and let’s talk about something you probably don’t associate with the company behind TikTok: hardcore video games.

I’m writing this from my apartment here in China, where the digital landscape moves at lightning speed. As an American expat running a blog focused on demystifying modern China for folks back home, I spend a lot of time observing the tech giants. And while everyone knows ByteDance as the behemoth parent company of TikTok, fewer realize it’s been making a serious, albeit incredibly turbulent, push into the massive global gaming market.

This isn’t just about casual mobile time-wasters anymore. We’re talking major investments, big-name hires, AAA ambitions, and a strategy that’s shifted more dramatically than Shanghai weather. If you thought the tech wars were just about social media feeds and e-commerce, think again. ByteDance wants a piece of the $200 billion+ gaming pie, and its journey has been nothing short of a rollercoaster. Let’s unpack the saga of ByteDance Games – the rise, the fall (or was it a strategic retreat?), and the surprising reconstruction happening right now.

Chapter 1: The Blitzkrieg – When ByteDance Tried to Buy the Gaming World

It feels like ages ago in tech years, but ByteDance’s serious gaming ambitions really kicked off around 2017-2018. Initially, founder Zhang Yiming wasn’t even a gamer – a fact often repeated in tech circles here. He famously described himself as disciplined, eschewing games and cards. But even a “moral paragon,” as his colleague once jokingly called him, couldn’t ignore the sheer scale and potential of the gaming industry, especially when you command the attention of billions of eyeballs through apps like Douyin (China’s TikTok) and the international version of TikTok.

The initial strategy was classic ByteDance: move fast, leverage traffic, and don’t be afraid to spend. They started by building distribution channels and dabbling in hypercasual games under the banner of Ohayoo, releasing over 150 titles like My Kung Fu is Special (我功夫特牛) – some even pulling in respectable revenue (one reportedly hit over 600 million RMB, roughly $85M USD, in a year). But hypercasual wasn’t the end game. It was just the appetizer.

The main course involved flexing what the Huxiu article aptly calls “钞能力” – “cash ability.” Starting around 2019, ByteDance went on a shopping spree, mimicking Tencent’s playbook but arguably with even more aggression at times. They weren’t just investing; they were acquiring studios and talent wholesale:

• Talent & Tech: Snapping up studios like Shanghai Mokun (上海墨鹍) and investing in others like Cadtle (凯撒文化) primarily for their development teams and technical know-how.
• IP & Established Hits: Acquiring companies like Moonton Technology (沐瞳科技) – the makers of the hugely popular Mobile Legends: Bang Bang (MLBB) – in a deal reportedly worth a staggering $4 billion in 2021, significantly outbidding rivals (including, rumor has it, Tencent). They also brought Youai Entertainment (有爱互娱), known for hits like Red Alert OL (红警OL) and the massively successful Idle Girls (放置少女), into the fold.
• Strategic Bets: Investing in a diverse range of studios targeting different genres and markets, from MMORPGs to anime-style games, sometimes even poaching targets reportedly courted by Tencent.

By its peak, ByteDance’s gaming division, primarily operating under the brand Nuverse (known as 朝夕光年 – Zhaoxi Guangnian – domestically), had ballooned. We’re talking over ten studios, multiple publishing arms, and connections to nearly 30 game companies. They had studios dedicated to massive online games (like Shanghai Wushuang), classic IP adaptations (101 Studio), and RPGs (Beijing Oasis). The message was clear: ByteDance was serious, and it was using its immense resources – both financial and its unparalleled user traffic from Douyin/TikTok – to brute-force its way into the top tier of gaming.

Chapter 2: The “Earthquake” – When Ambition Met Reality

The high-speed expansion, however, hit some serious roadblocks. The Chinese government’s crackdown on gaming licenses (“版号” – bǎnhào) starting in 2021 significantly slowed down domestic releases for everyone, including ByteDance. But the issues ran deeper.

Despite the massive investments and the hype, ByteDance struggled to produce consistent, large-scale hits from its internal studios that could truly challenge the dominance of Tencent and NetEase in China, or stand shoulder-to-shoulder with global giants. While some games performed decently – One Piece: Burning Blood (航海王热血航线) hit the top 10 grossing charts in China initially, and Crystal Core (晶核) had a strong launch in July 2023 – none became the kind of breakout, long-lasting phenomenon ByteDance seemed to be banking on. Titles like The Tale of Food (花亦山心之月) and HeatBlood Basketball (热血街篮), despite receiving significant resources, reportedly didn’t quite live up to expectations.

As one source close to ByteDance told reporters, the strategy under then-CEO Liang Rubo (who took over from Zhang Yiming) began to shift. The feeling was that the gaming division had become “large but not comprehensive” (大而全 – dà ér quán), spreading resources too thinly across too many unfocused projects. Compared to the massive, reliable revenues from Douyin and its burgeoning e-commerce business, the return on investment (ROI) from gaming simply wasn’t cutting it. The “move fast and break things” approach, while effective for scaling social apps, wasn’t necessarily translating well to the long, complex, and creatively demanding cycles of AAA game development.

This culminated in what many in the industry called the “ByteDance gaming earthquake” (字节游戏大地震) in November 2023. ByteDance announced a massive restructuring and downsizing of its gaming operations under Nuverse/Zhaoxi Guangnian.

• Project Shutdowns: Many projects still in development were canceled, except for a few deemed innovative or strategically important (particularly in UGC – User Generated Content, and AIGC – AI Generated Content).
• Asset Sales: Already launched games with decent performance were put on the block, seeking buyers to take over operations. A prime example was the sale of Youai Entertainment’s Red Alert OL assets to Ruyi Jingxiu (儒意景秀) in May 2024. Interestingly, Ruyi is linked to Tencent, meaning ByteDance’s rival effectively picked up a valuable piece of the puzzle at what many considered a bargain price (reportedly a minimum of 259 million RMB, potentially less than the asset’s book value). This sale, however, seemed specific to Red Alert OL, with ByteDance likely retaining control over other Youai assets like the lucrative Idle Girls franchise.
• Team Dispersal: Studios were downsized, merged, or dissolved. The Shanghai 101 studio had already been disbanded earlier.

It looked like a dramatic retreat. Many observers wondered if ByteDance was throwing in the towel on its grand gaming dream. But as is often the case here, the reality was more nuanced. This wasn’t a complete exit; it was a painful, strategic consolidation.

Chapter 3: Enter the Fixer – Zhang Yunfan and the Rebuilding Phase

Just when the dust seemed to be settling, ByteDance made another surprising move. In May 2024, they brought in a seasoned industry veteran, Zhang Yunfan (张云帆), to lead the reconstituted gaming division.

Zhang Yunfan is a well-respected figure. He was previously the President of Perfect World’s gaming business and also operated as an investor. His arrival signaled a potential shift in philosophy. Unlike the previous focus, which some insiders felt relied too heavily on pouring resources and traffic (“大力出奇迹” – dàlì chū qíjì, roughly “brute force creates miracles”), Zhang Yunfan publicly emphasized a different approach.

In interviews and podcast appearances (like one on “知行小酒馆”), he stressed the importance of “people” as the core asset in creative industries like gaming. He highlighted the crucial role of producers’ judgment, the need for careful consideration of team capabilities and market trends, and cautioned against blindly chasing fads. He spoke of avoiding “greed and arrogance” and focusing on building a “virtuous cycle” through continuous improvement and sound management. He even mentioned divesting from his personal investments in gaming companies to avoid potential conflicts of interest and fully commit to the ByteDance role, stating, “You can’t have it both ways… wanting to do one thing well requires giving up other things.”

His appointment wasn’t just symbolic. The past year (late 2023 to late 2024) has seen a quiet but determined rebuilding effort under his leadership:

• Organizational Restructuring: Studios were consolidated and refocused. For example, the teams behind One Piece: Burning Blood, The Tale of Food, and the upcoming Hatsune Miku: Colorful Stage! were merged into a single Shanghai studio called Zero36.
• Key Hires: Besides Zhang Yunfan himself, ByteDance brought in other experienced leaders:
  • Lu Lingqing (陆凌青): Former Honor of Kings publishing producer and Tianmei L2 operations head (Tencent), later COO at Yoozoo. He now heads the Zero36 studio in Shanghai and is also responsible for publishing the domestic version of MLBB (决胜巅峰).
  • Lu Jiaxian (陆家贤): Founder of MuQiQi (木七七), known for games like Adventure & Mining and Card Monsters (which reportedly inspired Marvel Snap, a game ByteDance published globally). He’s now a producer at Zero36, reportedly working on a Star Wars IP CCG (Collectible Card Game).
  • Liu Qian (刘谦): Former producer for Tencent titles like CrossFire (逆战) and PUBG: Army Attack (绝地求生 全军出击). He’s now leading a new studio in Shenzhen focused on a high-end shooter.
  • Yin Weiye (殷炜晔): Experienced art director and executive (TiGames, Kuaishou, Perfect World) with a background in virtual worlds and avatars, joined to lead art for “virtual innovation business.”
  • Hao Jing (郝景来): Former head of SandBox Network’s Guangzhou branch, joined as a UGC producer.
• Renewed Project Pipeline: Contrary to expectations of a complete freeze, new projects are being greenlit at a “surprising” pace, according to a 36Kr report.

ByteDance Games wasn’t dead; it was being rebuilt, seemingly with a more focused, pragmatic, and talent-centric approach.

Chapter 4: The Arsenal – What’s Cooking in ByteDance’s Game Studios Now?

So, what does ByteDance’s gaming portfolio look like after the earthquake and during this reconstruction? Based on the reports from late 2024 and early 2025, it’s still surprisingly broad and ambitious. Let’s tour the key locations:

• Beijing (Oasis Studio, Bluesea Studio, potentially remnants of Youai):
  • Crystal Core (晶核): Their successful ARPG launched in 2023 is ongoing. A Crystal Core 2 is rumored.
  • Mistfall Hunter (雾影猎人): This is a significant new bet – a third-person PvEvP “extraction” game (think Escape from Tarkov or Dark and Darker, but fantasy). It features classes (Warrior, Archer, Mage, Assassin), distinct weapons, RPG elements, and emphasizes tactical combat and resource management. It had overseas tests on Steam in late 2024 and is targeting a 2025 release, marking a serious push into the PC/Console space.
  • Other projects: Reports mention ongoing work on SLG (Strategy) games, Card RPGs, casual titles, pixel-art games, and crucially, the continuation of the Idle Girls (放置少女) series, likely under the Youai banner which seems to still exist within ByteDance despite the Red Alert OL sale. Land of Empires: Immortal is another SLG linked to Beijing.
• Shanghai (Zero36 Studio, Moonton Shanghai):
  • One Piece: Burning Blood (航海王热血航线): Still a key revenue driver, receiving significant updates and showing resilience on the charts.
  • The Tale of Food (花亦山心之月): Also under Zero36.
  • Hatsune Miku: Colorful Stage! (初音未来：缤纷舞台): Published by Zero36, this rhythm game based on the globally popular virtual idol launched successfully in China in March 2025, hitting #1 on TapTap and Bilibili charts, and #2 on iOS free charts. (Originally expected March 2025, but seems to have launched then based on the April 2025 article).
  • Star Wars IP CCG: This is a big one. Reportedly a collectible card game set in the Star Wars universe, developed in collaboration with external partners and produced by Lu Jiaxian. This leverages a massive global IP.
  • Moonton Shanghai: Seems focused on ARPG projects and potentially PC-based action games. They also have card games like Card-Z and Card-W listed as in development.
• Guangzhou (Nuverse Guangzhou, Moonton’s IGNI Studio & Lighthouse Studio):
  • Bleach: Sword Resonance (境·界 刀鸣): This project, based on the popular anime/manga, seems to have had a rocky development involving external studios, but the remaining team was apparently absorbed by ByteDance, and the game received its license (版号) in early 2024.
  • Jungo Jam (Code: Block): An ambitious UGC sandbox platform. Initially tested globally with a focus on being a game creation platform (like Roblox), it pivoted in late 2024 tests towards “role play” (RP) experiences, encouraging users to create RP scenarios using AI tools. This project is reportedly considered important, reporting directly to Zhang Yunfan.
  • “Brawl Stars-like” project: A self-developed game inspired by Supercell’s hit mobile brawler.
  • Moonton IGN_I Studio (founded Feb 2024): Working on “light anime” and simulation games (one described as “Animal Crossing-like”).
  • Moonton Lighthouse Studio: Working on “light casual” games.
  • You Ming Zhi (幽明志) & Xi Ta (汐塔): These two IP incubation projects, previously under Nuverse Guangzhou, were moved under Moonton’s Guangzhou branch after the restructuring. You Ming Zhi is apparently now being developed as an animated film, still led by original producer Yu Wanzhou. Xi Ta‘s status is unclear.
  • Other projects listed include 代号Dawn (Code: Dawn) and a DC Comics IP game.
• Hangzhou (Jiangnan Studio):
  • Project: REBORN (星球：重启): Their sci-fi survival shooter is being maintained with long-term operations.
  • AIGC/UGC Focus: Job postings indicate a strong focus here, requiring experience with editors like Roblox, Minecraft, War3, Dota2, StarCraft 2, and Eggy Party.
  • Three-Body Problem IP Game: Another potentially massive project, leveraging Liu Cixin’s internationally acclaimed sci-fi novel. As of early 2025, it was reportedly still in the early Demo stage but already generating buzz.
• Shenzhen (New Studio):
  • UE5 / PC-Console / PvE / 3A Shooter: Led by Liu Qian, this new studio is aiming high with a project built on Unreal Engine 5, targeting PC and consoles, focusing on PvE (Player vs. Environment), potentially with extraction elements (“open economic trading system”), and explicitly described using the “3A” label. This signals serious intent to compete at the premium end of the market.
• Moonton Technology (Global Powerhouse, HQ likely Singapore with global studios):
  • Mobile Legends: Bang Bang (MLBB): The crown jewel. Continues to dominate in Southeast Asia and achieved record DAU and revenue globally in 2024, according to sources. ByteDance/Moonton are actively developing it into a larger IP with spin-offs like the auto-battler Magic Chess: Go Go.
  • Other Titles: Watcher of Realms, Mobile Legends: Adventure, Fantasy Saga (幻世与冒险) are also part of their portfolio.
  • New Directions: Reports suggest Moonton is taking more risks with new projects compared to previous years, exploring open worlds, action games, and various competitive genres. They also seem to handle some global publishing/development, like One-Punch Man.
• Discontinued Projects: It’s worth noting some projects didn’t survive the shift. ParaSpace, a UGC/social platform launched in early 2023, was shut down in January 2025. The fate of the Darker and Darker-like rumored in Beijing is unclear, possibly morphed into or replaced by Mistfall Hunter.

Across the board, the scale remains impressive. One report from April 2025 claimed ByteDance Games now oversees over 40 projects, with at least 28 yet to be released, spanning MOBA, card games, SLG, shooters, MMOs, and simulation.

Chapter 5: Strategic Shifts – Reading the Tea Leaves of the New Game Plan

Looking at this whirlwind of activity, what can we deduce about ByteDance’s new strategy under Zhang Yunfan? Several trends emerge:

1. Focus on Self-Development (自研 – zìyán): While they still publish third-party games (like Hatsune Miku) and partner on development (like the Star Wars CCG), there seems to be a stronger emphasis on building internal development capabilities and owning the core IP generation. This reduces reliance on external partners and potentially offers higher margins long-term. It’s a shift away from just being a distribution channel leveraging traffic.
2. Continued Global Ambition: The choice of IPs like Star Wars, DC, One Piece, and the continued investment in Moonton (whose strength is primarily outside China) underscores a persistent global focus. They are hiring talent specifically for Western and Japanese markets (ONE Studio roles mentioned). Many internal projects (Mistfall Hunter, the Shenzhen shooter, the Star Wars CCG) are clearly designed with a global audience in mind from day one.
3. IP Power Plays: Recognizing the difficulty of launching original hits, ByteDance is heavily leaning on established, globally recognized IPs to de-risk projects and attract audiences – Star Wars, One Piece, Bleach, Hatsune Miku, potentially DC and Three-Body Problem. This is a common tactic in the industry, but ByteDance is applying it across multiple high-profile franchises simultaneously.
4. Exploring New Frontiers: They aren’t just sticking to mobile MOBAs and RPGs. The push into PC/Console (Mistfall Hunter, the Shenzhen 3A project), the deep investment in UGC (Jungo Jam) and AIGC (across multiple studios, leveraging ByteDance’s core AI strengths), and exploring genres like extraction shooters shows an ambition to innovate and find the next big thing, not just replicate existing successes.
5. Pragmatism and “Long-Termism”: Zhang Yunfan’s rhetoric about patience and avoiding arrogance seems reflected in the actions. They are optimizing older games (One Piece getting a big revamp), keeping stable earners going (Idle Girls), and seemingly taking a more measured approach to greenlighting new projects based on studio strengths, rather than the previous “spray and pray” investment strategy. The internal memo mentioning “long-termism” supports this.

Chapter 6: The Billion-Dollar Question – Is an IPO Back on the Table?

With this level of activity and investment, the inevitable question arises: is ByteDance planning to spin off its gaming division via an IPO?

Rumors flared up intensely in April 2025. Media reports, citing multiple independent sources, suggested ByteDance was actively considering packaging Nuverse (Zhaoxi Guangnian) and Moonton into a single entity for a public listing, potentially targeting Singapore, Hong Kong, or even the US (though geopolitical tensions make the US seem less likely to some observers).

The rationale? Scale and potential value. Analysts estimated the combined entity’s annual profit could be around 2 billion RMB (approx. $280M USD), heavily driven by Moonton’s estimated $200M USD contribution (mostly from MLBB). Revenue was placed in the 10 billion RMB tier (around $1.4B USD), making it a strong contender for the #4 spot in China behind Tencent, NetEase, and miHoYo. Based on typical gaming company P/E ratios (15-30x), this could imply a valuation anywhere between 30 billion and 50 billion RMB ($4.2B – $7B USD), potentially higher given future growth prospects and synergies with the ByteDance ecosystem.

However, just as quickly as the rumors spread, an official ByteDance Games spokesperson shut them down, stating curtly: “No plans for an IPO at this time” (目前暂无上市计划).

So, what’s the real story? It’s likely complicated. An IPO could provide dedicated capital for the gaming division, unlock value, and offer liquidity for employees with stock options. But challenges remain: Would ByteDance group options convert? Would the market value the entity fairly given the recent turbulence and current economic climate? How independent would it truly be from the parent company? For now, the official stance is no IPO, but given the scale and the history of tech giants spinning off divisions, it’s a rumor that will likely resurface.

Conclusion: Down, But Far From Out

The saga of ByteDance Games is a fascinating case study in ambition, strategy, and the harsh realities of the hyper-competitive gaming industry. They stormed onto the scene with immense resources and disruptive potential, stumbled, underwent a painful but necessary restructuring, and are now quietly but determinedly rebuilding under new leadership with a seemingly more focused, global, and long-term strategy.

Make no mistake: despite the setbacks, ByteDance remains a formidable player with deep pockets, unparalleled access to users via TikTok/Douyin, cutting-edge AI technology, and a renewed pipeline of ambitious projects spanning mobile, PC, console, UGC, and major global IPs.

Can the TikTok giant truly become a gaming giant? The jury is still out. They need to prove they can consistently deliver high-quality, engaging games that resonate globally and sustain long-term success. The competition is fiercer than ever. But based on the current trajectory – the talent they’ve attracted, the IPs they’ve secured, the diverse projects in development from Shanghai to Shenzhen – ByteDance is clearly playing the long game now.

For anyone watching the global tech and entertainment landscape, ByteDance Games is a story that’s far from over. The next few years will be crucial in determining if this reconstructed gaming division can finally deliver on its immense potential. Keep an eye on those project releases – the proof, as always, will be in the playing.