Chinese Tech Giants ByteDance and Tencent Explore Cooperation in Gaming Business Amid Market Challenges

Chinese business media LatePost has learned from various sources that ByteDance’s gaming division, Nuverse, is in negotiations with Tencent to sell several games. 

Individuals close to the deal revealed that the teams involved in the sale are scattered across Shanghai, Shenzhen, and other locations. Nuverse has spent hundreds of millions on the development of these games, and they are now being sold at a significant discount. A representative from Nuverse responded that a deal with Tencent has not yet been finalized, and the team is also in discussions with multiple buyers about selling projects.

Tencent Games is also in discussions with Douyin (TikTok’s Chinese version) to further expand their cooperation in the gaming content ecosystem. If the deal goes through, players will be able to see more Tencent game-related content on Douyin in the future.

Tencent and ByteDance were once comprehensive business rivals. Over five years ago, they suspended their business cooperation and added each other’s products to their advertising ban lists. However, today, the competitive relationship between the two companies has somewhat weakened. In November 2023, Nuverse significantly downsized, retaining only a small number of staff to operate launched projects and explore new directions, which has argubly created conditions for the two parties to resume cooperation.

Entering 2023, more and more previously confrontational Chinese internet companies have begun to cooperate. For example, “Genshin Impact”, a mobile game produced by miHoYo, has been allowed to appear in the search result on WeChat. Android phone players can directly search for “Genshin Impact” in the WeChat and download the game directly, without being redirected to App stores or other links.

In addition to Tencent Games, Tencent Video announced in April 2023 that it would cooperate with Douyin on the secondary creation and promotion of long videos. Prior to this, another Chinese video streaming platform iQiyi also announced a similar cooperation plan with Douyin. At the same time, Alibaba‘s platforms, led by Tmall, have been advertising on WeChat more frequently. During the 2023 “11.11” shopping festival, Taobao Alliance accessed WeChat’s advertising channel for the first time.

A Tencent insider told LatePost that Tencent‘s e-commerce advertising experienced rapid growth in the first half of 2023, mainly because the number of products launched by Alibaba started to increase.

The number of ads placed directly on WeChat by merchants from platforms like Tmall and JD.com is also increasing. The aforementioned Tencent insider said that in the past, merchants were more dependent on e-commerce platforms, so they were inevitably subject to the platforms’ restrictions and could not independently connect with external channels like WeChat for advertising. But today, most e-commerce platforms are facing traffic exhaustion, so they are willing to actively open interfaces to WeChat, allowing merchants to advertise independently.

In the past, Chinese tech companies built high walls between each other to compete for users and market share. But today, with the loss of bonuses and shortage of traffic, the industry’s main theme has shifted from chasing user growth to chasing revenue growth. 

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