Byte game "Disaster Reconstruction": shrink ambition, keep the fire

It seems to have been withdrawn, and it seems that it has not been withdrawn

Author | Ginger intermediary

Cover source | ByteDance official website

ByteDance's game dream has tenaciously retained a spark on top of the "ruins" of project cuts, dissolution of studios and large-scale layoffs in the second half of 2022.

On February 23, Tencent launched the doomsday survival strategy mobile game "Dawn Awakening: Life" in the mainland. On the same day, Byte's game of the same type "Planet: Reboot" was launched in Hong Kong, Macao and Taiwan. This is the third self-developed product officially launched by Byte on the market, and it is also the largest self-developed game under its brand to date.

Bytes, which is considered by the outside world to be "algorithms are not human", has not given up heavy games. While the personnel are shrinking on a large scale and retreating from the frontal battlefield, it is also completing the "post-disaster reconstruction" in its own way.

The focus shifted overseas

After the downslaughter in mid-2022, Byte's self-developed game business basically abandoned the mainland market and turned overseas.

The reason is simple. In the past five years, the pattern of the mainland game market has been solidified, and in addition to "Genshin" as a new force, it is still the world of classic IPs such as "Honor of Kings", "Peace Elite" and "Onmyoji", and it is not easy to fight in the shadow of giants.

"Due to the limitation of the version number, there is basically no room for trial and error in the self-research of the mainland market, and bytes are required to do heavy work and big projects from the beginning." A person close to Byte's top told Snow Leopard Finance. An operating organization that focuses on game overseas also said, "Overseas projects have more advantages than mainland projects in terms of development, polishing, rework and other costs." ”

In other words, if resources are focused overseas, bytes may be able to "do wonders".

Byte's game business brand had more than 3,000 people at its peak, and there were four major studios that focused on researching heavy games.

Among them, Shanghai 101 Studio, formerly known as Shanghai Molu, was purchased by Byte from 37 Interactive Entertainment in March 2019, and its main task is to tackle self-developed projects in the mainland market. Beijing Oasis Studio, Hangzhou Jiangnan Studio and Shanghai Wushuang Studio are mainly overseas projects. "Planet: Reboot" is exactly from Hangzhou Jiangnan Studio.

From June to September 2022, Byte Games made significant adjustments to its self-developed business, and Shanghai 101 Studio became the hardest hit area of the layoff storm and was completely disbanded. The remaining three studios, which are mainly engaged in overseas projects, have also made small business adjustments, but the proportion of layoffs is less than 20%.

In mid-December 2022, Byte merged its two business lines of domestic distribution and overseas distribution, and established ONE Publishing Studio, a global distribution studio. ByteDance CEO Liang Rubo's request is to improve administrative efficiency.

People close to Byte's senior management said that Byte has only "abandoned self-research in the mainland market, and other self-developed projects are still operating", and a complete set of systems from research and development to distribution and operation are still in place.

According to industry estimates, the overall valuation of Byte Games is about 20 billion ~ 40 billion yuan, which is lower than the peak, but it is still in the second echelon of Chinese game companies.

To do a good job in overseas markets, the person in charge of Sunrise Lightyear Yan Shu needs to think about the question: how to develop benchmarking products under the framework of medium-sized game companies.

In March 2021, Byte officially announced the wholly-owned acquisition of Mu Pu Technology, whose "Endless Showdown" has become a national game in Indonesia, Singapore, the Philippines, Malaysia, Mongolia, Turkey and other markets, and has built a complete e-sports ecosystem, which has been selected as an official competition of the Southeast Asian Games for three consecutive times.

Although "Honor of Kings" has dominated the mainland market for many years, it still cannot be the king of the global Moba (multiplayer online tactical competitive game). This means that "Endless Showdown" still has the power to fight in the global market.

"In a strict sense, "Endless Showdown" is not a work developed by Byte, but the experience of success in some countries and regions will be a very valuable asset for Byte, at least knowing how to win." Zhuang Minghao, former vice president of Matrix Partners Ventures, told Snow Leopard Finance.

Ambitions shrink

Byte Games' original ambition was to replicate Tencent's success in the gaming field with its algorithm and traffic advantages.

Looking back at the development of Byte Games, he first undertook game promotion through Toutiao, Douyin and other channels, and realized the commercial value of it; In addition, we will try to exclusively distribute lightweight products such as mini games and casual games to accumulate user portraits of active gamers. In other words, what Byte is good at is the algorithm and traffic driving game operations.

But in the world of heavy gaming, Byte is a true newcomer. Byte, who believes in "great miracles", chose capital to open the way, rather than building a team from scratch.

According to incomplete statistics from Snow Leopard Finance and Economics based on public information, from 2019 to 2022, Byte has made at least 22 investments in the game field, involving 19 companies and investing about 30 billion yuan. Eight of them were 100% equity acquisitions, directly integrating products and teams into the byte system.

In February 2020, Yan Zhi, who has a war investment background, took office and was fully responsible for the byte game business. In April of the same year, Yan Wei released a micro headline, saying that ByteDance's game business will continue to recruit more than 1,000 people in 2020, and the self-developed game will be launched in the first half of the year at the earliest.

According to Byte insiders, at that time, Yan Zhi personally led the team to search for high-quality teams and projects in the market, giving priority to mature teams that have been established for more than 5 years, and have the immediate combat power to quickly launch products. Self-developed projects have devoted all their efforts to benchmarking against the top level of the industry, in the early stage, classic IPs such as "Glory of Kings" and "Onmyoji", and in the later stage, innovative products such as "Genshin" that break the pattern, are all explosive models with an investment of more than 100 million in the early stage.

"Byte needs a blockbuster, and then it comes alive and directly activates the entire chain." Zhuang Minghao told Snow Leopard Finance and Economics that Byte spared no effort to make games at that time, from traffic entrance to capital entry, from agent distribution to product research and development, spending a lot of money and years to touch the upstream and downstream of the industrial chain, and has formed the basic plate of the layout of the entire industrial chain.

But coincidentally, under the influence of optimism brought about by the "stay-at-home economy" during the epidemic, Tencent was full of horsepower at almost the same time.

In 2020, Tencent invested 33 times in the game field, and invested in 14 domestic game companies in the last two months of the year. In the first half of 2021, the number of investments soared to 47, with an average of one sale every 4 days.

During that time, every time Tencent's war investment team encountered some high-quality projects, it would bring two contracts to negotiate, one was a shareholding plan and the other was an agency agreement. If you can't buy it, you must also form a strategic cooperation with the bottom guarantee. In the absence of absolute price differences, investment targets often choose to hand over the team to Tencent, rather than Byte in the growth stage.

Coupled with the limited number of projects in the market that meet the requirements, Byte has to come up with a high premium to close the deal. Mu Pu Technology, which has grown into one of the most combative teams under Byte, was included in Byte at a price of more than 4 billion US dollars, and the general market quotation at that time was 2 billion ~ 3 billion US dollars.

However, after completing the layout of the entire game industry chain through a series of capital operations, Byte has not successfully changed from a layman to an insider.

After tens of billions failed to burn a super hit, Byte had to temporarily abandon its ambition to "become the next Tencent" and retreat from the domestic Red Sea market to a relatively safe area.

Keep the tinder

Abandoning self-research does not mean that the figure of Byte Game has completely disappeared in the domestic market, but its position has changed behind the scenes.

After Shanghai 101 Studio was cut, Byte handed over all the core project personnel of the 3D card mobile game "All-Star Fight" to its partner CMGE. In November last year, the game was officially launched, and the turnover exceeded 50 million yuan in the first week.

"All-Star Fight" "Return" CMGE Source: CMGE official website

This game, which has been developed for several years, was an important project that Byte had high hopes for.

Shanghai Molu is the developer of "All-Star Fight" and the predecessor of Byte Shanghai 101 Studio. CMGE is the publisher of the game and holds about 20% of Shanghai Molu through its holding company, which is equivalent to the integration of research and operation.

In March 2019, Byte acquired Shanghai Molu and signed two IPs with CMGE, including "All-Star Fight", and "All-Star Fight" was branded as Byte.

"As a new team, Byte Games needs to come up with representative works and prove value to the top management and the outside world with results." A person close to the top of Byte Games told Snow Leopard Finance. However, since getting the version number in May 2019, the development of "All-Star Fight" has lasted for 3 years, overturned and restarted many times, and has never been launched.

Since the beginning of 2022, Byte has begun to "slim down" the game business, successively shutting down some self-developed projects that are difficult to launch in the short term, and transferring personnel to other project teams. Snow Leopard Finance learned from multiple channels that in the layoff turmoil in the middle of last year, for other projects that have been launched or are close to launch, Byte mostly adopted a similar treatment to "All-Star Fight".

"Byte's response is to divest the products and teams that have been included in the system, and then maintain a close relationship through distribution, intermodal transportation, etc., so as to reduce the operational risks of the business during the economic downturn." A middle manager at a small game company told Snow Leopard Finance.

This means that after a failed attempt to attack the city, Byte Games is not for nothing, and it can also get a certain share as the publisher after the game goes live. The above-mentioned people said that Byte's move is not only to reduce its own burden, but also a kind of "completion" for partners.

Not only that, Byte, who gave up the frontal battlefield, left a fire for himself in this way, retaining the power of the "counteroffensive". "In the workforce market, large factories have a strong attraction to employees at the executive level, and as long as the backbone of the project is still there, they can quickly become a team." A headhunter told Snow Leopard Finance.

"Byte withdrew, but it doesn't seem to have been withdrawn." Zhuang Minghao commented on Byte's adjustment in the game business.

Revitalize existing resources and maintain the size of medium-sized game companies - only by solving the current problem can Byte Games be qualified to talk about "long-term patience".