Why is ByteDance determined to sell the profitable Moonton? The long-standing rumors of ByteDance selling Moonton are finally coming to fruition. On February 14th, a Reuters report sent shockwaves through the domestic gaming industry: ByteDance is in final negotiations with Saudi Arabia's Public Investment Fund (PIF)-owned Savvy Games Group for the sale of Moonton Technology, with a transaction valuation between $6-7 billion (approximately RMB 41.4-48.3 billion). Even if the deal includes bundling several in-development games from the Shanghai studio such as "Headshot Banned Zone" and the "Project Code A02," along with all assets of the Guangzhou Lighthouse studio, it represents a respectable separation.
According to informed sources, both parties have reached preliminary consensus on the core terms of the transaction, with a formal equity acquisition agreement expected to be signed in February and the deal potentially closing as early as the first quarter of 2026.
Frankly, this price represents a paper profit of over 50% compared to ByteDance's acquisition price of approximately $4 billion in 2021. However, Moonton was once regarded by ByteDance as the strategic core for its overseas gaming expansion, and in April 2025, there were even rumors of it being packaged with Nuverse for an independent listing. Its fluctuating fortunes are a true reflection of ByteDance's own ups and downs in the gaming sector.
Of course, selling Moonton does not mean ByteDance is completely abandoning the gaming industry. According to sources, ByteDance has retained core teams such as the Guangzhou Youai division, the Beijing Oasis Studio, and the Shanghai ZERO36 Studio, and holds several mature products like "Crystal of Atlan," "Earth: Revival," and "One Piece: Burning Blood."
After divesting Moonton, ByteDance's gaming focus will shift entirely towards lightweight games. These types of products naturally align with the fragmented usage habits of short video users and can achieve rapid cold-start through algorithmic recommendations.
**The $4 Billion "Interception"**
Looking back, 2021 was a critical turning point for China's gaming industry. That year, the actual sales revenue of the domestic gaming market was RMB 296.513 billion, with a year-on-year growth rate dropping to 6.4%. The gaming user base grew by only 0.22% year-on-year, the lowest increase in eight years, signaling the imminent peak of the domestic market's demographic dividend.
Consequently, overseas markets, which were initially seen as strategic supplements or incremental opportunities, became a crucial window for sensing changes in the gaming market. However, as the market shifted from incremental to存量 competition, coupled with drastic changes in the domestic gaming environment, the entire industry chain was forced to re-evaluate the importance of internationalization. Domestic manufacturers unanimously turned their focus overseas, leading to a wave of game出海 (going global).
At that time, ByteDance was in a period of boundless expansion led by founder Zhang Yiming. After securing its position in the short video and information flow arenas with the traffic advantages of Douyin and Toutiao, ByteDance identified gaming as the next "battleground." It firmly believed that by leveraging its traffic portals like Douyin and Toutiao and acquiring high-quality developers, it could reshape the gaming industry chain and achieve deep synergy between traffic and content. Moonton became the ideal target in ByteDance's eyes at that time.
Founded in 2014, Moonton Technology was one of the earliest Chinese companies deeply engaged in game出海. Its MOBA mobile game "Mobile Legends: Bang Bang" (referred to as "MLBB"), launched in 2016, became a national-level hit in emerging markets like Southeast Asia and Latin America. As of January 2026, the game had accumulated over 1.5 billion global downloads, with monthly active users consistently above 110 million, ranking among the top ten most popular games in over 80 countries and regions worldwide.
Furthermore, "MLBB" had built a mature esports ecosystem in Southeast Asia: from the professional league MPL to the global championship, it hosted the most influential esports events in the region and was successfully selected as an esports competition title for the 2026 Asian Games in Japan. In January 2026, the MLBB World Championship (M7) in Jakarta, Indonesia, achieved a peak viewership of over 5.68 million, setting a new historical record for global mobile esports viewership. It is no exaggeration to say that for Southeast Asian users, this national game has transcended mere entertainment, becoming a local social symbol and cultural trend.
More importantly, Moonton held the overseas MOBA market influence that
With this acquisition, ByteDance not only gained a global hit game but also acquired Moonton's years of accumulated overseas publishing experience, local operational capabilities, esports system building capabilities, and a market-verified, full-cycle operational methodology for overseas hits.
Consequently, ByteDance once placed high hopes on Moonton – providing top-tier traffic support, technical assistance, and allowing Moonton to maintain independent operations post-acquisition, attempting to deeply integrate it with ByteDance's traffic ecosystem and make it the "ace" for ByteDance's gaming globalization. The industry was even optimistic that ByteDance's acquisition of Moonton would completely reshape the competitive landscape of the global gaming industry.
Of course, ByteDance's gaming ambitions did not stop at Moonton. From 2019 to 2021, ByteDance entered a "shopping spree" mode for gaming assets, successively taking control of Shanghe Network, Shanghai Moon, and investing in companies like Microfun and Youai Interactive. At its peak, its business empire comprised over ten studios, four publishing platforms, and 29 affiliated game companies, with the scope expanding continuously. In an era where traffic was king, ByteDance firmly believed that by piling on capital, manpower, and traffic, it could replicate its success in the short video sector within the gaming sector.
Today, Moonton's fundamentals remain healthy, even showing strong growth vitality. According to Sensor Tower data, in January 2026, "MLBB"'s overseas revenue increased by 122% month-on-month. Since its launch, its global cumulative revenue has approached $2.4 billion, and it has been shortlisted for the TGA "Best Esports Game" award for the past two consecutive years.
Factoring in new products successively launched by Moonton like "Tide Watcher" and "Silver & Crimson," as well as in-development projects in genres like shooting, ARPG, and PC client games, it contributed approximately $200 million in profit to ByteDance in 2024, making it the undisputed "cash cow" of ByteDance's gaming business.
**Why is ByteDance Determined to Sell Moonton?**
Firstly, ByteDance's overall strategy has shifted from "boundless expansion" to "focusing on the core." After Zhang Yiming stepped down and Liang Rubo took over in 2021, ByteDance's growth logic underwent a fundamental change.
If Zhang Yiming pursued an unlimited war of "rapid advancement and rapid trial and error," Liang Rubo places greater emphasis on the input-output ratio of business units, advocating for the concentration of resources towards core sectors, which has achieved leapfrog growth in revenue.
Taking 2025 as an example, ByteDance's revenue surpassed Meta's in the first two quarters, making it the world's largest social media company. In the third quarter, its employee stock buyback plan corresponded to a company valuation exceeding $330 billion. During this period, AI, e-commerce, and short dramas became ByteDance's core focus areas. These sectors possess characteristics of high efficiency and high certainty in monetization, aligning well with ByteDance's strengths in traffic distribution and algorithmic recommendation.
In contrast, the gaming industry, as a content creation sector, requires long-term continuous investment and faces极高的 market uncertainty. ByteDance's products like "One Piece: Burning Blood" and "A Tower of Sweethearts," despite massive resource investment, failed to become phenomenal hits, mostly lingering in the middle ranks of charts.
Essentially, ByteDance's successful formula of precise algorithmic distribution + rapid traffic monetization, while highly effective in short video and e-commerce, could not be successfully replicated in the highly creative gaming field. This is because the core competencies required for sustained product innovation, long-term community operations, and deep content refinement in the gaming industry are not ByteDance's forte.
This led to the ecological synergy between Moonton and ByteDance ultimately becoming a case of "appearing united but divided at heart": ByteDance hoped to use Moonton to break into overseas markets and make gaming a new pillar business for the group. Five years on, this goal has not been realized. Moonton's synergistic value for ByteDance's expansion in Southeast Asia has been limited, and its contribution to the group's core business has become increasingly ambiguous.
Secondly, ByteDance's gaming business itself underwent strategic correction, shifting from large-scale, all-encompassing expansion to focusing on lightweight games.
The aggressive acquisitions in 2021 led to ByteDance's gaming operations becoming overextended. With over ten studios advancing projects simultaneously, resources became dispersed and projects lacked focus. In 2023, ByteDance began a strategic reorganization of its gaming business, leading to project cancellations and staff optimizations at Nuverse. In 2024, ByteDance's gaming division slammed on the "emergency brakes," announcing the shutdown of most unlaunched projects and retaining only a few innovative and technical projects. At that time, while ByteDance's gaming division was steadily positioned in the second tier of domestic gaming companies (with an overall profit of approximately RMB 2 billion in 2024), compared to core businesses like Douyin short video and e-commerce, its ROI was clearly too low, making it a "burden" that ByteDance needed to shed.
In May 2024, Zhang Yunfan, former president of Perfect World's gaming business, took over Nuverse. Unlike his predecessor's belief in "traffic infusion and achieving miracles through sheer force," Zhang Yunfan advocates for the steady development of the gaming business, believing that game development must align with team capabilities and market trends, and cannot blindly follow trends.
Under Zhang Yunfan's leadership, ByteDance Gaming reviewed over 40 in-development games and 28 approved projects, covering popular genres like card games, shooters, MOBA, SLG, and MMO, and steadily advanced the merger of Nuverse and Moonton. This also led to rumors in April 2025 about a potential independent listing for ByteDance's gaming division.
However, progress on the Nuverse-Moonton merger stalled thereafter. ByteDance Gaming also shifted its focus entirely to lightweight games. Moonton's independent operational system, requiring sustained long-term R&D investment and cross-regional coordination and management, significantly deviated from ByteDance Gaming's new strategic direction, fueling increasing rumors of its sale.
Now, a sale at $6-7 billion allows ByteDance to cash out at a high point on this investment. The recouped funds can be fully invested into core sectors like large language models and e-commerce. After divesting Moonton, ByteDance Gaming can also advance with a lighter load, letting go of its obsession with traditional heavy-core games and returning to its core competency circle.
**Why Saudi Arabia, Not
A noteworthy detail in ByteDance's sale of Moonton is that the company, which holds multiple hit titles, was not sold to its domestic rival
From ByteDance's perspective, market speculation suggests the highest priority was a transaction that could be concluded swiftly, rather than pure commercial maneuvering:
* Selling Moonton to
In this context, Saudi Arabia, as a third-party capital, became the perfect acquirer.
Firstly, Saudi Arabia is neither a direct competitor in China's gaming industry nor a primary target for Western technology scrutiny, meaning the transaction is unlikely to face excessive regulatory intervention from either China or the US. Simultaneously, Saudi capital possesses sufficient financial strength and has a strong desire to acquire quality gaming assets, reducing the likelihood of excessive price haggling and allowing ByteDance to achieve a respectable strategic exit.
Secondly, Saudi Arabia's acquisition motives align perfectly with the "Saudi Vision 2030" led by Crown Prince Mohammed bin Salman – whose core objective is to reduce the national economy's dependence on the oil industry and establish the gaming and esports industries as central pillars of economic transformation.
It is important to note that Savvy Games Group, the gaming investment platform fully owned by PIF, is a key executor of this national strategy. In recent years, Savvy has embarked on large-scale global gaming industry acquisitions: acquiring US mobile game company Scopely for $4.9 billion in 2023; and in March 2025, through Scopely, acquiring the gaming business division of "Pokémon GO" developer Niantic for $3.5 billion.
Despite these moves, Saudi capital still lacks a global blockbuster capable of supporting its industrial ecosystem, and Moonton恰好能补齐这一核心短板 (happens to fill this core gap).
To this end, rumors surfaced as early as 2023 that ByteDance had been in contact with Saudi Arabia's Savvy Games Group, with ByteDance hiring Goldman Sachs as a financial advisor and quoting a price no less than $5 billion. Ultimately, the two parties failed to reach an agreement due to multiple factors.
Finally, Saudi Arabia's acquisition of Moonton is not just about buying "MLBB," but an entire, complete global game R&D and operation system. Moonton has mature local teams in over 80 countries and regions, has built a full-cycle esports system from professional leagues to global tournaments, and possesses over 2,000 employees with comprehensive game development and publishing capabilities. These are capabilities that cannot be bought by capital alone and form the foundation for Saudi Arabia to build its own local gaming industry ecosystem.
In other words, the core reason for Saudi Arabia's acquisition of Moonton is to build a differentiated competitive advantage in the global esports arena, making "MLBB" the core "calling card" for its gaming industry transformation. This is the fundamental reason why Saudi Arabia is willing to pay the high premium of $6-7 billion for Moonton. After all, with Moonton's annual revenue estimated at $1-1.2 billion, applying the gaming industry's common PS valuation multiple of 5 would place its reasonable valuation range at $5-6 billion.
Furthermore, the timing of the transaction is particularly crucial:
* For ByteDance, the gaming department has already undergone multiple rounds of staff optimization. If the Moonton sale remained unresolved for an extended period, it would hinder the advancement of Zhang Yunfan's new strategy. Rather than leaving uncertainty hanging over the gaming business, selling it off to储备现金流 (stockpile cash flow) for the large language model race is preferable. * For Saudi Arabia, after years of布局 (positioning) in the gaming industry without successfully acquiring a blockbuster asset, and given that "MLBB" is already a top mobile game in the Middle East market, the acquisition can further promote the game's development locally, achieving the dual goals of深耕本土市场 (deepening the local market) and upgrading its global布局 (layout).
**Final Thoughts**
2021 was a peak year for acquisitions in China's gaming industry. Giants like
However, five years on, traffic has ultimately proven incapable of creating blockbusters, let alone替代 (replacing) the core value of content creativity and long-term operations.
* miHoYo, without relying on a major traffic platform, secured its position in the first tier of二次元游戏 (anime-style games) with "Genshin Impact" and "Honkai: Star Rail."
* Lilith Games established itself in overseas markets through gameplay innovations in "Rise of Kingdoms" and "Dislyte."
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In contrast, ByteDance, despite holding a top-tier traffic pool, repeatedly encountered setbacks in self-developed games. Even with massive resource investment, it failed to create a single self-developed phenomenon-level hit, precisely because it overlooked that the core competitiveness of the gaming industry lies in product strength.
The latest market data corroborates this judgment: Sensor Tower data shows that in January 2026, sales revenue in China's client game market grew 23.46% year-on-year, a rate far exceeding the overall game market growth, while mobile game market sales revenue declined 1.52% year-on-year. This indicates that users are no longer satisfied with lightweight mobile games and are instead embracing client and console games with stronger artistic presentation, deeper gameplay, and greater immersion. The massive success of "Black Myth: Wukong" and the market recovery driven by "Delta Action" serve as prime examples.
Ultimately, the gaming industry is a content creation sector. Users pay for quality content, innovative gameplay, and极致体验 (ultimate experiences). As user demands for game quality increase, the importance of product strength naturally becomes paramount.