ByteDance, TikTok’s owner, is aggressively downsizing its video gaming unit, affecting hundreds of employees, in a fresh sign that the smart money in China is continuing to exit the heavily regulated industry, according to people familiar with the situation.
The Beijing-based company, which only one year ago was pouring millions into its gaming operations, has stripped Shanghai-based Wushuang Studio of most of its staff through lay-offs and internal transfers, after the closure of 101 Studio in June, said the people familiar, who declined to be named as the information is not public yet.
ByteDance’s gaming unit, however, will maintain certain operations in Shanghai for projects that have already launched, the sources said. ByteDance is also cutting jobs at Jiangnan Studio, its game development studio in Hangzhou, one of the people familiar said.
ByteDance did not immediately respond to a request for comment.
The job cuts by ByteDance, China’s most highly valued unicorn with deep pockets, will add to the woes in China’s gaming industry, which some analysts say has passed its peak now that China’s censors scrutinise every single detail of a new game, from a story’s plot to a character’s costume.