It has been more than a year since ByteDance rebooted its gaming division. Now, the company appears to be heading toward a new turning point.
Industry chatter suggests ByteDance is moving to merge its two key gaming units—Nuverse and Moonton. The rumored plan? Fold the two under one banner, then spin the gaming arm off as an independent company in preparation for an IPO.
ByteDance has publicly denied any current plans for a public listing. But according to 36Kr, insiders at Moonton say the merger is imminent. What remains unclear is which entity will absorb the other.
Hints of this union date back to 2023, shortly after Zhang Yunfan was appointed to lead ByteDance’s gaming operations. At an internal meeting, Zhang—whose remit spans Nuverse, Moonton, and the user-generated content (GC) division—suggested the two studios would become increasingly intertwined. When asked point-blank about a merger, he played it coy, neither confirming nor denying the idea.
Since then, the walls between the two units have started to come down. Moonton, once the more autonomous of the two, has begun collaborating more closely with Nuverse. The companies previously operated on separate internal systems; now, that’s changing. “I think by the end of this year or early next year, the systems will be fully integrated,” a source told 36Kr.
What’s happened since the gaming reboot?
In late 2023, ByteDance initiated a major restructuring of Nuverse. The company said it would offload titles that had already launched and shown promise, while shelving most unlaunched projects, except for a few tied to innovation or cutting-edge tech.
Sources said that individual Nuverse teams were responsible for finding buyers for their games. But it wasn’t easy. LatePost reported that the combined valuation of Nuverse’s unsold projects stood at RMB 40–50 billion (USD 5.6–7 billion). Sellers wanted full upfront payments, which is a tough ask in a gaming market struggling with inertia.
Moonton’s failed sale illustrated the broader problem.
ByteDance acquired Moonton in 2021 for USD 4 billion, betting on its dominance in the MOBA (multiplayer online battle arena) genre overseas. In 2023, ByteDance tried to sell the studio for no less than USD 5 billion, but found no takers. The deal fell through.
That left ByteDance with a stalled gaming portfolio. But rather than walk away, the company chose to regroup. ByteDance rarely scraps initiatives outright, especially in big markets like gaming. The stakes are high: China’s domestic mobile gaming market is worth RMB 238.3 billion (USD 33.4 billion), while the global market stands at RMB 635.6 billion (USD 89 billion), per CNG.
In March 2024, ByteDance circulated an internal memo signaling a fresh incubation drive. A month later, it confirmed that Zhang, formerly president of Perfect World’s gaming arm, would oversee all gaming operations, reporting directly to ByteDance veteran Hua Wei.
Since then, the pace of new project approvals has picked up again.
As of now, industry outlets like Youxituoluo have reported that ByteDance greenlit over a dozen new projects spanning role-playing, strategy, and shooter genres. Some are based on big-name IPs, including The Three-Body Problem and Star Wars.
In mid-2024, ByteDance also formed a new gaming studio, Zero36, by consolidating the teams behind One Piece: Blood Routes, Flower, and Hatsune Miku: Colorful Stage! in Shanghai. The latter launched in March and quickly climbed to second place on China’s iOS free download chart, signaling that ByteDance’s gaming muscle still has some flex left.
Still, this version of ByteDance isn’t swinging for the fences like it used to.
A different tempo
Gone is the strategy of chasing “miracles through brute force.” Under Zhang, the gaming unit is focused on doing fewer things better.
Nuverse now has just over 1,000 staff (including contractors), less than half its peak headcount. Hiring has slowed to a crawl. And the cadence of new project launches is more measured than it once was. Within China’s gaming industry, ByteDance no longer registers as a top-tier threat.
The reason? Gaming isn’t paying off like it used to, especially with ByteDance’s artificial intelligence investments—such as its Doubao large language model—eating into margins and pushing down overall profitability.
Meanwhile, games haven’t delivered the returns ByteDance hoped for.
Take Crystal of Atlan, one of Nuverse’s most high-profile titles. The game launched in July 2023 and rode a wave of Douyin-fueled promotion to break into the iOS revenue top ten. But within two months, it had slipped out of sight.
Despite ByteDance’s deep well of resources, sustaining that kind of success—and scaling it to impact the company’s massive balance sheet—is a different beast.
As of January 2025, Diandian data showed Crystal of Atlan had earned RMB 1.02 billion (USD 142.8 million) from iOS installs. It’s a solid figure for most studios, but likely a footnote for ByteDance. By contrast, Tencent’s marquee titles routinely rake in over RMB 4 billion (USD 560 million) annually.
Zhang’s leadership style reflects the new mood. Industry peers describe him as steady, strategic, and risk-averse. That temperament now defines ByteDance’s gaming roadmap.
Despite its modest growth post-acquisition, Moonton remains one of ByteDance’s most valuable gaming assets. Its flagship title, Mobile Legends: Bang Bang, continues to dominate the MOBA scene in Southeast Asia.
Constraints from the original acquisition deal, such as performance guarantees and profit benchmarks, have hampered broader expansion. But Mobile Legends: Bang Bang is still delivering. In March, it ranked fifth among Chinese mobile games by overseas revenue, per Sensor Tower, beating out heavyweights like Genshin Impact and logging its highest monthly earnings yet.
With Moonton’s stable product pipeline and defined team structure, many insiders believe that if a merger does happen, Nuverse will be absorbed into Moonton—not the other way around.
ByteDance may no longer be the disruptor-in-chief of global gaming. But it’s far from out of the game. The fire’s still there, just burning in a lower gear.
KrASIA Connection features translated and adapted content that was originally published by 36Kr. This article was written by Lan Jie for 36Kr.