ByteDance is a cautionary tale for anyone who sees China’s video gaming industry as a quick route to bags of cash
- Decision to pull back by China’s highest-valued unicorn underscores the lingering risks in the world’s biggest video gaming market
- ByteDance’s retreat may give market leaders like Tencent and NetEase a chance to snap up some talent
ByteDance’s retreat from video gaming is a cautionary tale for both Big Tech companies as well as smaller studios in China, with the industry no longer seen as a gold mine amid economic headwinds and regulatory pressures.
For many, the decision to pull back by China’s highest-valued unicorn underscores the lingering risks in the world’s biggest video gaming market despite signs of a nascent recovery earlier this year.
In the first half of 2023, overall revenue from China’s video gaming industry fell 2.4 per cent from a year earlier, but the combined amount of 144.3 billion yuan (US$20.3 billion) was up 22.2 per cent from the second half of 2022, according to a report released in July by China’s Game Publishing Committee.
Matthew Chen, co-founder and chief operating officer of Zencat Gaming, a start-up in Chengdu, Sichuan province, that develops and distributes video games, says the move “confirms that winter is coming” for the industry.
According to Chen, even though Beijing resumed approvals of new game licences last year, the industry is still struggling amid economic pressures. “Players just don’t spend that much money now,” he said.
