ByteDance, owners of one of the largest mobile platforms -TikTok - has made a move to expand its reach by acquiring Mobile Legends studio, Moonton.
ByteDance's video games unit Nuverse reportedly made the move to acquire Moonton Technology at a $4 billion valuation, as per multiple sources who told Reuters.
Mobile Legends Is Now Owned by ByteDance
Moonton Technology was founded by an ex-Tencent employee. It is the studio responsible for a handful of mobile titles, most notably, Mobile Legends. Mobile Legends is widely considered one of the most popular mobile MOBAs in the world. However, much of its extensive player base is located in Southeast Asia.
According to Reuters, sources familiar with the situation claimed that Tencent made a bid to acquire Moon. But, just last week, ByteDance decided to match the offer, resulting in the acquisition of the Shanghai-based company.
An anonymous source also told Reuters that Moonton will continue to operate independently, as per Moonton CEO Yuan Jing's decree.
With Mobile Legends in the fold, ByteDance has proven that they are serious about getting into the video game industry.
But, perhaps, more importantly, it'll be interesting to see how Tencent and Riot Games respond to this.
Since Mobile Legends released in 2017, Tencent has repeatedly filed lawsuits against Moontoon. In particular, in 2018, Tencent won $2.9 million. This was after they filed a separate non-disclosure and non-compete lawsuit against Xu Zhenhua, the CEO of Moonton Games.
ByteDance Gearing Up to Compete with Tencent
After the success of the video app TikTok, ByteDance is gearing up to put its eggs into multiple baskets. They're doing this even if it means coming in late and going up against China's largest video game company in Tencent.
However, this does make a lot of sense. China is currently the largest video game market in the world. They recently beat out the United States in 2020 in terms of revenue generated with $40.85 billion against the US's $36.92 billion, according to Newzoo.
Prior to the Moonton acquisition, ByteDance had limited themselves to casual games in China's market. This includes, among others, a racing game in Drift Race and a puzzle game in Brain Out. Both of these titles are free to play and went on to become top iOS games in China.
That said, this will mark the first large game acquisition of ByteDance after establishing its video game division, Nuversegame.
ByteDance was founded in 2012 and gained international traction in 2017 after acquiring Muscal.ly, which they subsequently combined with a previous acquisition, Flipagram. Less than a year later, they combined both apps with TikTok into a single platform. However, they kept the TikTok name and created a Chinese-specific counterpart in Douyin.
As of May 2020, ByteDance was reportedly worth over $100 billion.