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According to Yuan Jing CEO of Moonton, Moonton will operate independently from ByteDance following the acquisition.
Multinational internet technology company ByteDance through its subsidiary Nuverse, its video gaming unit, has acquired Moonton, a Shanghai-based video game developer. According to news outlet Reuters, people familiar with the matter disclosed that the deal values Moonton at approximately $4 billion. Reportedly, Tencent Holdings Ltd had made a similar bid to acquire Moonton but ByteDance quickly matched the deal. As a result, ByteDance is well-positioned to compete with Tencent in the global gaming industry, which is valued at approximately $86 billion. “Moonton is the perfect partner to help expand our gaming strategy in international markets,” ByteDance said in a statement.
The two entities are expected to cooperate to develop not only interesting games but also competitive one to help the company diversify its revenue collection.
“Through cross-team collaboration and drawing on lessons and insights from its own rapid growth, Moonton provides the strategic support needed to accelerate Nuverse’s global gaming offerings,” ByteDance said.
It is expected that Moonton will operate independently from ByteDance following the acquisition according to Yuan Jing, CEO of Moonton.
Bigger Picture on Moonton Acquisition by ByteDance
ByteDance heavily relies on advertising revenue collection through its video sharing app TikTok and Douyin in China. Analysts expect competition to heighten in the gaming industry amid the coronavirus pandemic.
“This is a mega deal in the global gaming industry, not only within China. So the M&A craze in the gaming sector continues, and I believe ByteDance is still on the lookout for other studios. Be prepared for a long war between Tencent and ByteDance for acquiring game content,” Serkan Toto, CEO of consultancy Kantan Games, told CNBC.
The acquisition is strategic in all aspects considering that ByteDance is capable of marketing new video games through its vast social media platforms including TikTok. Moreover, the company has the capital to invest in developing the best video games that encompass the latest technology including VR capabilities.
“With Bytedance at the helm, the two firms (Moonton and ByteDance) could leverage TikTok / Douyin to promote Mobile Legends in markets such as China and the US where Tencent’s Honor of Kings and Riots’ League of Legends: Wild Rift are the dominant mobile MOBA titles,” Niko Partners said.
Moonton was established back in 2014 and released its first video game dubbed the Tower Defense a year later. Notably, Moonton is widely known for its mobile multiplayer online battle arena (MOBA) games. Most of its games have attracted huge demand in the global gaming industry, particularly in Southeast Asia.
Forward, ByteDance will be under pressure to deliver quality video games that can compete with other providers like Tencent.