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ByteDance Catching up the Tencent-Dominated Online Gaming Industry
COVID-19 and China
Tencent's record breaking game, Pubg mobile. Image credit: SCREEN POST/Unsplash

Since the outbreak of the new coronavirus, offices and educational institutions have been shut down for a good two to three weeks’ time, leaving millions of citizens trapped in their homes. An article recently published by EqualOcean showed that online gaming giants, Tencent and NetEase, seem to be the main winners in China’s mainland online gaming boom during this period.

ByteDance is a newcomer in the industry compared to the other two; having taken full advantage of the current situation, its strategy is already paying off. Although the world’s most valued startup is yet to develop and release its own game, the company is already publishing games made by others, and three of those games broke into the top five free mobile games in China on the first day of the Lunar New Year holiday, according to Abacus News

ByteDance’s top game, ‘Xiaomei Fights the Landlord’ is a Chinese version of poker which is quite similar to one of the most successful games released by Tencent. This move shows that ByteDance is not afraid to take on Tencent in the mobile gaming business, and with platforms like Douyin (TikTok) and Toutiao, ByteDance will have no problem promoting these games. 

Although ByteDance might be giving Tencent some tough competition, it’s not even close to the revenue Tencent is generating through its games. 

We believe that ByteDance might be the only company capable of entering such a competitive market and grabbing a share instantaneously – but the process won’t be a piece of cake, as Tencent and Netease have the advantage of having long-established relationships with Chinese regulators, who in 2018 began a campaign to root out gaming addiction, which drastically constricted the number and variety of games allowed to be published in the country.

Other than that, ByteDance recently announced that it will appoint an executive to exclusively lead its video games business. Yan Shuo, formerly the head of strategy and investment, now will wholly focus on the company’s gaming business.

This move shows that the company – which started off with news aggregator Toutiao, then later released its world-famous app short video app TikTok – has seen the revenue it can generate from gaming and is willing to focus on moving beyond making money mainly through advertisements.

According to Gamma Data, a research firm, China has the world’s biggest gaming industry, which is dominated by tech giant Tencent, developer of the gargantuan WeChat app and the popular mobile game Honor of Kings. It currently makes up over half of the market by sales. With the pace ByteDance has set up, there is no doubt that it will be soon up there snatching the market share from the current leaders NetEase and Tencent

Editor: Luke Sheehan

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