ByteDance acquires gaming studio Mooton, flaring up rivalry with Tencent

TikTok parent company ByteDance announced on Monday that its video games arm, Nuverse, has acquired China-based Mooton Technology, as the company looks to further expand within the gaming industry, Reuters reported.

ByteDance’s desire to bolster its position within the video gaming industry, places it directly in competition with China’s largest social media and gaming company and long-time rival, Tencent.

It notable that this isn’t the first video games-oriented acquisition ByteDance has made. Back in 2019, the tech giant acquired 100 percent of Shanghai-based mobile game developer Mokun Technology as the world’s most valuable unicorn makes an even further foray into gaming.

Mokun previously developed a 3D mobile game with a classical theme of the Three Kingdoms, a period in China’s history when it was divided between the states of Wei, Shu, and Wu. The game was distributed by Tencent Holdings, the world’s largest game publisher by revenue and a keen rival of ByteDance in the short-video market.

Bytedance’s TikTok (known within mainland China as Douyin) competes with Tencent-backed Kuaishou and its broader social networking platform. The two companies even filed competing lawsuits against each other in 2018, alleging anti-competitive behavior and defamation, respectively.

“Through cross-team collaboration and drawing on lessons and insights from its own rapid growth, Moonton provides the strategic support needed to accelerate Nuverse’s global gaming offerings,” ByteDance said in a statement.

In an internal memo, Yuan Jing, CEO of Mooton, said the company would operate independently from ByteDance after the acquisition, a source told Reuters on condition of anonymity as he is not authorized to speak to the press.

It is important to mention that Mooton Technology was founded by an ex-Tencent employee, is most famous in Southeast Asia for its multiplayer online battle arena (MOBA) game Mobile Legends.

Tencent had previously bid for Mooton but the offer was matched by Bytedance last week, two sources familiar with the situation told Reuters. The acquisition will place both companies at logger heads as they both now have different MOBAs to compete on, such as Tencent’s Honor of Kings and League of Legends, which is operated by U.S. video game developer Riot Games.

Tencent and Riot Games have filed multiple copyright infringement claims against Mooton since 2017.