After selling Moonton Technology for 6 billion USD, ByteDance has finally stopped competing in the gaming industry

(This article was authored by Gao Hengshuo and published by Titanium Media with authorization)

Text by Gao Heng

ByteDance (hereinafter referred to as 'Byte') has sold off the most profitable part of its gaming business.

On March 20, ByteDance signed an agreement with Savvy Games Group (hereinafter referred to as 'Savvy'), under the Saudi Public Investment Fund (PIF), to sell all of Moonton Technology's equity for over 6 billion USD. After the transaction is completed, Moonton will become a wholly-owned subsidiary of Savvy, but its headquarters will remain in Shanghai, and the management team will stay unchanged, with Zhang Yunfan continuing as CEO.

Based on Byte's acquisition price of approximately 4 billion USD in 2021, this deal resulted in a book profit of nearly 2 billion USD, or about 13.8 billion yuan.

However, more important than a profitable exit is the signal it sends: the gaming business, which was once placed in the core business sector and invested with resources over several years, is being redefined. The sale of Mooton Technology means that Byte’s current round of gaming contraction has reached its most substantial step.

From the perspective of the transaction itself, Mooton Technology is not an asset being liquidated but rather an asset being priced.

As early as November 2023, when Byte significantly scaled back its gaming operations, reports surfaced that Byte was seeking to sell Mooton for no less than 5 billion USD. At 6 billion USD, compared to the 2021 acquisition price of 4 billion USD, there is a clear premium. This indicates one thing: this is not a distressed sale but a transaction with market support and room for negotiation.

The reason Moonton Technology could fetch such a price lies in its flagship product, 'Mobile Legends: Bang Bang' (MLBB, known domestically as 'Victory Peak'). This is a MOBA mobile game launched in 2016, which has consistently ranked among the top-grossing charts in Southeast Asian markets like Indonesia, the Philippines, and Malaysia. Public data shows that as of January 2026, the game’s global cumulative downloads exceeded 1.5 billion, with stable monthly active users above 110 million, generating nearly 2.4 billion USD in revenue, and ranking among the top ten popular games in more than 80 countries and regions.

More crucially, this game is not just a single product; it has evolved into an entire sustainable esports ecosystem. Starting in 2017, Moonton built the professional league MPL, gradually covering key Southeast Asian markets. In 2023, the M5 World Championship set a record with 5.06 million concurrent online viewers, and in 2025, it successfully entered the Esports World Cup, becoming a significant force in global mobile esports competitions.

In other words, what Moonton Technology is selling is not just a game but an entire proven 'product + event + monetization' system that includes a stable user base, continuous cash flow, and regional market barriers.

This is also why the buyer, Savvy, is willing to take over. Established by Saudi Arabia's Public Investment Fund in 2021, this company serves as a core platform in the 'Vision 2030' initiative to build a global gaming and esports industry. Savvy has completed several high-profile acquisitions, including the $4.9 billion purchase of Scopely, the developer of 'Monopoly Go', as well as the integration of esports event organizations like ESL and Faceit. It is rapidly expanding its global footprint through mergers and acquisitions.

Renowned technology industry commentator Peng Deyu analyzed that for Savvy, the value of Moonton Technology lies not in 'whether it can be done,' but in 'it has already been done.' What it provides is a mature business that can be directly integrated into its global strategy, rather than an uncertain project that needs revalidation.

Thus, the first layer of meaning of this deal is clear: what ByteDance sold is a high-quality asset that has been market-tested and can be valued based on cash flow.

More importantly, timing matters. In terms of product lifecycle, 'Mobile Legends: Bang Bang' still maintains stable revenue capabilities, but its growth has entered a plateau phase; from an industry perspective, competition is intensifying, acquisition costs are rising, and the return cycle for mid-to-heavy games is lengthening.

Exiting at a stage when 'a premium can still be commanded, but growth is starting to slow down' is essentially a classic case of cashing out at a peak. This also determines that this was not a passive exit, but an active transaction completed before the value began to decline.

If we only look at the deal itself, it represents a successful exit. However, within the context of ByteDance’s business evolution, it feels more like a phase completion.

ByteDance did not enter the gaming industry late. It began research around 2015 and officially entered the market in 2018, launching the 'Today's Games' module on Toutiao and the gaming center on Douyin, starting with casual games and mini-game distribution before gradually expanding into self-development and publishing. In 2019, it acquired Shanghai Moqun to form Studio 101; in 2021, it launched the 'Nuverse' brand and consecutively acquired teams such as Moonton and Youai Interactive Entertainment, quickly bolstering its product development and R&D capabilities.

During that period, gaming was once listed as one of ByteDance's six core businesses, with a team size exceeding 3,000 people and a rapidly expanding studio matrix. This was not a mere trial but a full-scale expansion.

However, adjustments came quickly. From 2022 onwards, signals of contraction in the self-developed business became evident, with Studio 101 in Shanghai initiating layoffs in June. By November 2023, Nuverse entered a large-scale adjustment phase, shutting down numerous projects under development, integrating or disbanding teams, and reducing its workforce from a peak of over 3,000 to approximately 1,000 employees.

According to reports, this decision to scale back was made after extensive discussions between Yan Shou, the head of operations, and ByteDance CEO Liang Rubo. At the time, Liang Rubo stated internally that this move aimed to shift away from the previous pursuit of a 'comprehensive and all-encompassing' model, focusing energy and resources instead on 'more fundamental, innovative, and imaginative directions.'

Brand strategy expert Wu Yuxing pointed out: behind this lies a more fundamental issue: ByteDance's capabilities that have proven effective in other businesses have not translated into similar advantages in the gaming industry. ByteDance excels at 'algorithmic distribution + traffic amplification + rapid product iteration.' This logic can be continuously reused in short videos, e-commerce, and advertising, and once the model is validated, results can be amplified sustainably.

But gaming is different. It is more akin to a content-driven industry, relying on long-term R&D, creative judgment, and operational patience. Whether a product will succeed is largely determined before its launch, with distribution only amplifying outcomes but rarely altering them.

This creates a structural mismatch: ByteDance excels at amplifying certainty, while gaming is inherently a highly uncertain business.

Mooton Technology is a typical example. Its success stems more from its long-term presence in Southeast Asia rather than ByteDance’s replicable system capabilities. The foundation of 'Mobile Legends: Bang Bang' remains stable, but ByteDance has yet to release another breakout hit since taking over.

At the same time, external competition is intensifying. Its product positioning, often described as 'strikingly similar to Honor of Kings,' faced severe challenges after Tencent's competing products went overseas. Following the launch of the international version of 'Honor of Kings' (Honor of Kings), leveraging stronger brand influence and global operational resources, it quickly captured the mid-to-high-end user market in Southeast Asia. By the third quarter of 2025, its overseas revenue exceeded 380 million USD, with downloads surpassing 120 million, posing a direct challenge to 'Mobile Legends: Bang Bang.' In the second quarter of 2025, the ARPU of paying users in Southeast Asia dropped by 18% year-on-year, with a user overlap rate as high as 47% with 'Honor of Kings'

These developments point to the same trend: Mooton remains a valuable asset, but it is now closer to stable operations rather than rapid growth.

At this stage, continued heavy investment yields diminishing marginal returns, while exiting allows for locking in gains while valuations are still favorable.

More noteworthy are the changes at the organizational level.

According to Phoenix Tech, as Mooton Technology completes its sale, ByteDance’s gaming division is also considering a full spin-off, 'becoming a wholly-owned subsidiary like Dongchedi.' In other words, gaming will no longer be a sector requiring continuous group-level investment or directly benchmarked against core businesses; instead, it will be 'set aside' to exist independently and in a more lightweight manner.

Therefore, the sale of Mooton Technology is not an isolated decision but a natural outcome of this business line progressing from 'expansion—validation—contraction—divestment' to further 'peripheral operation.'

From a higher level, this transaction represents a clearer prioritization of resources.

Over the past year, ByteDance's investment in AI has significantly accelerated. At the beginning of 2026, Liang Rubo clearly identified the annual focus as 'DouBao/Dola Assistant application' during a company-wide meeting, stating that the AI era holds multiple critical opportunities and that the company must pursue the most important directions among them.

In terms of data, results in this direction have already emerged. According to QuestMobile, DouBao's monthly active users grew from 99.805 million in the first quarter of 2025 to 230 million in the fourth quarter, ranking first in the industry for two consecutive quarters; Dola’s daily active users overseas exceeded ten million. Official disclosures also indicate that DouBao's large model achieves an average daily usage of 63 trillion tokens.

The significance of these figures lies not only in growth itself but also in illustrating something more crucial: AI is transitioning from a new business into a foundational capability that can be integrated across the entire company system.

This is also its biggest difference from gaming.

Gaming resembles project-based business, where the success or failure of a single product often determines most returns. Even if successful, replicating that success with the next product is difficult; whereas once AI proves viable, it can simultaneously be embedded in multiple scenarios such as content production, ad recommendations, e-commerce conversions, and search queries, reused repeatedly across different businesses.

In other words, gaming is about 'single-point explosions,' while AI is about 'system amplification.' The latter aligns perfectly with ByteDance's expertise: turning capabilities into platforms and continuously replicating them.

This is why, despite both being high-investment areas, AI's priority within ByteDance has been rapidly elevated.

At the same time, competition within the industry is also heating up rapidly.

Tencent has poured large-scale subsidies into AI products, while Alibaba integrated Qwen into core scenarios like Taobao, Alipay, and AutoNavi, breaking through 100 million monthly active users within two months.

This means that AI is no longer just a growth driver but a battleground for positioning.

In this context, time is becoming critical: whoever completes the closed loop of user scale, model capability, and application scenarios first will be more likely to secure the gateway to the next phase.

If resources are not concentrated, it means missing the window of opportunity.

This is why the sale of Moonton Technology is not just an asset transaction but more like a resource reallocation.

On one hand, bringing back over 6 billion US dollars in cash can directly fuel competition in computing power, models, and products; on the other hand, cutting a business line with heavy investment, long cycles, and limited synergy reduces organizational complexity and focuses management attention and team resources on fewer directions.

For a company of significant size, what’s truly scarce is often not capital, but strategic patience that allows for sustained investment.

However, it must be emphasized that ByteDance has not completely exited gaming. If we look at this deal from a longer-term perspective, its significance becomes clearer: ByteDance hasn’t abandoned a business line, but rather reselected a growth path that aligns better with its capabilities in the AI era.

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