5 reasons why Bytedance might become the next gaming giant

Just about one year since the debut of its first game, Bytedance – the company known for short-video apps Douyin and TikTok – has grown to be the top publisher of hyper-casual games in China.

Now, on the back of its success in the segment – which includes lightweight, replayable games – it wants to enter the hardcore gaming arena and leapfrog the established players. To succeed, Bytedance will have to take on current leader Tencent and longtime runner-up NetEase. The prize is a massively profitable gaming market worth about US$152.1 billion in 2019 worldwide.

Photo credit: Dean Drobot / 123RF

As the world’s most valuable startup, Bytedance has some crucial advantages as it prepares to shake up the gaming market. Here are the top five reasons why Bytedance could beat Tencent in its own playground.

1. Bytedance has demonstrated its ability to innovate

Founded in 2012, Bytedance has grown rapidly in its eight-year lifespan in the Chinese tech sphere, where search engine Baidu, ecommerce giant Alibaba, and social and entertaining powerhouse Tencent have been dominant. The three, referred to as the Chinese BAT, are often considered China’s versions of Google, Amazon, and Facebook, respectively.

With Bytedance’s private market valuation surpassing US$78 billion in 2018, some have even asked whether Bytedance might take over the B in BAT. Unlike many unicorns, which aim for investment or acquisition from the big three, Bytedance appears to have its own plan to chart its success.

After experiencing a staggering rise, thanks to Douyin, and established content platform Jinri Toutiao, Bytedance is now also looking for a third growth curve. In the coming years, it’s going to make bigger bets on gaming, among others, according to local media LatePost, citing a Bytedance insider.

2. Bytedance successfully poaches its competitors’ talent

ByteDance has hired more than 1,000 collaborators over the past few months as it schedules to release its first two non-casual games in the spring, both in domestic and overseas markets, according to a Bloomberg report.

As part of their aggressive recruiting spree, Bytedance took talent from big-name gaming companies like Tencent, NetEase, and Perfect World, people familiar with the situation told KrAsia.

Earlier in June, Bytedance reportedly set up a team of 100 people to work on its project Oasis, targeting heavy games. So far, they have released nine game demos and are working toward producing more games including role-playing games and massive multiplayer online r0le-playing platforms.

3. Bytedance has a massive pool of users

The Beijing-headquartered firm claimed to have more than 700 million daily active users (DAU) as of July, distributed across its apps globally – short-video platform Douyin and Tiktok, Xigua, and Jinri Toutiao. Douyin’s DAUs have exceeded 400 million at the beginning of this year. Outside of China, TikTok has grown astronomically, beating out Facebook’s Messenger app to become the world’s second most downloaded app, only behind WhatsApp.

Bytedance’s challenges shouldn’t be overlooked