ByteDance is weighing sale of gaming studio Shanghai Moonton Technology (Moonton), Bloomberg reveals, citing undisclosed sources.
The divesture forms part of the Chinese internet company’s efforts to streamline operations to focus on core activities.
ByteDance has hired an adviser to assess potential investors’ interest in Moonton, which has developed games such as Mobile Legends: Bang Bang.
In 2021, ByteDance purchased Moonton and at the time, the studio was valued at roughly $4bn (29bn yuan).
Talks are at an early stage and the potential value of the deal was not known, the sources added.
Sources stated that ByteDance, which also owns video sharing platform TikTok, could still decide not to proceed with the sale.
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Requests for comments were not immediately answered by ByteDance and Moonton representatives.
Founded in 2012 by Zhang Yiming and Liang Rubo, ByteDance has grown into an internet major worth more than $200bn.
ByteDance has acquired acquiring exclusive distribution rights and game studios to expand its gaming business as it has disrupted the social media market and challenged players such as Tencent and NetEase.
The company has cut back on its publishing and game development teams to concentrate on e-commerce, which is its new growth driver.
If the Moonton deal goes through, it would be the largest step away from ByteDance‘s goal of leading the video game industry.
After the acquisition in 2021, ByteDance allowed Moonton to operate with a high degree of autonomy.
The game studio employs more than 1,600 people worldwide and has offices in China, Hong Kong, Singapore, Malaysia, and Indonesia.
Last week, reports emerged that ByteDance’s Pico, a virtual reality headset startup, is undergoing a restructuring, which will lead to substantial job cuts.