The world’s most valuable startup ByteDance has declared war in the gaming industry against the sector’s giant Tencent, premiering a leisure game to be played inside its short video app Douyin, which is known as Tik Tok outside China.
Douyin also allows third-party developers to launch games within its app, charging a 5% channel fee and taking away 30% to 50% of the revenue generated from ads and tipping.
The way Douyin splits revenue with game developers is similar to how Tencent’s social media app WeChat, which has more than 1 billion monthly active users, treats its third-party game developers.
Online games generated 25.81 billion yuan (US$3.8 billion) in revenue for Tencent in the third quarter of 2018, accounting for almost one-third of its entire revenue of 80.6 billion (US$11.72 billion).
By launching in-app games, Douyin, with its 500 million monthly active users, shows its ambition to slice off a piece from the lucrative gaming market.
ByteDance and Tencent are fiercely competing for internet users’ attention and time spent in-app. Tencent, in a defensive move, last month disabled the sharing of links from ByteDance’s social app Duoshan through WeChat and also prevented new Douyin users from creating accounts based on their existing WeChat and QQ login credentials.
Editor: Nadine Freischlad