TikTok parent ByteDance disclosed plans to discontinue development of most new games and sell off its current portfolio as it cuts 1,000 jobs in Nuverse, its main gaming studio, Nikkei Asia reported.
A source told the news agency the company sees limited upside for the gaming unit and will turn its focus to short-video platform TikTok and the Chinese version Douyin, along with e-commerce.
ByteDance invested about $4.2 billion in more than 19 gaming companies between 2019 and 2022, Nikkei Asia wrote.
The country’s gaming sector was hit by government restrictions in mid-2021, with approvals halted for nearly a year.
Tencent dominates the Chinese gaming market, with its domestic sales in the category up 5 per cent year-on-year to CNY32.7 billion ($4.6 billion) in Q3, reversing a prolonged decline.
Last month, ByteDance denied reports it was planning to shut down its VR handset brand Pico.