The size of the acquisition was not disclosed. However, it was announced that Moonton will take charge of the strategic assistance to ensure that the Nuverse global gaming offerings are accelerated.
Moonton Technology Co Ltd, a gaming studio based in Shanghai has been acquired by ByteDance Ltd according to a statement released early Monday. The CEO of Moonton Yuan Jing in an internal memo disclosed that the Moonton technology regardless of the acquisition will go ahead to operate independently.
ByteDance has sought to expand its video game business in an attempt to stand out among its competitors in the region. ByteDance is a household name in the industry as it owns top video platforms like TikTok and Douyin in China.
The size of the acquisition was not disclosed. However, it was announced that Moonton will take charge of the strategic assistance to ensure that the Nuverse global gaming offerings are accelerated.
Multiple sources revealed that the deal is valued at around $4 billion. This means the Honor of Kings and the League of Legends under the belt of Tencent Holdings Ltd (HKG: 0700) will have stiff competition from the MOBA that is currently controlled by ByteDance under the new deal.
The competition among the big industry players has been very intense as Moonton has faced multiple lawsuits from Tencent and Riot Games since 2017 on the charge of copyright infringement as claimed by reports.
Another interesting development revealed by two sources states that Tencent made the initial bid to acquire Moonton, but was unfortunate as ByteDance matched the bid just last week. An attempt to confirm this from the biggest video gaming and social media company in China was infertile as Tencent claimed they do not comment on speculations.
Gaming has been on the rise in recent times with the market enjoying a good moment after the “Stay at home” campaign to control the spread of the Covid-19 caused an unprecedented rise in active users. ByteDance has shown its commitment and desire to test the industry with their TikTok platform doing well as it managed to record 90 million monthly active users and around $1 billion in revenues.
The plan to take the gaming industry by storm is evident in the hiring of ex-employees of Baidu Inc (NASDAQ: BIDU), Alibaba Group Holding Ltd (HKG: 9988), and Tencent. Also, they have acquired 11 gaming companies since 2018 with six of them being fully acquired in a bid to expand their business. They recorded about 1.5 billion monthly users in 2019 across its various apps.
ByteDance is said to be different from Tencent as it focuses on different genres of games simultaneously. The company boasting hundreds of millions of monthly users has a clear understanding of their taste and preferences, helping them to recommend the relevant games for effective results. Some of the licensed games which include Brain Out and Drift Race have made it into the top 10 iOS free games in China. It is expected that their recent acquisition will make them a very competitive player in the gaming industry.
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Excellent John K. Kumi is a cryptocurrency and fintech enthusiast, operations manager of a fintech platform, writer, researcher, and a huge fan of creative writing. With an Economics background, he finds much interest in the invisible factors that causes price change in anything measured with valuation. He has been in the crypto/blockchain space in the last five (5) years. He mostly watches football highlights and movies in his free time.
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