On May 31, media reported that ByteDance has stopped selling its gaming business. The new game studio (Shanghai ZERO36) has ceased formation, and former COO and president of Perfect World, Zhang Yunfan, has joined ByteDance Games. As the primary leader, he reports directly to Hua Wei, the head of ByteDance HR.

At the end of last year, ByteDance announced a significant downsizing of its gaming division, Nuverse. Except for some UGC and AIGC projects under development, already launched and well-performing games were to be sold. Most unreleased projects, except for a few technical ones, were to be shut down.

ByteDance CEO Liang Rubo criticized the gaming division, stating that despite some achievements, ByteDance Games pursued an overly broad approach with scattered resources. He emphasized the need to focus on more foundational, innovative, and imaginative projects.

In March, ByteDance's gaming business saw a turnaround. Tencent took over some of ByteDance's disbanded game studios, with former ByteDance employees joining Tencent's new Saros Network Technology (Shenzhen) Co., Ltd. On March 14, ByteDance underwent a personnel change, appointing HR head Hua Wei as the new gaming business leader, overseeing UGC, Moonton, and Nuverse. Former gaming head Yan Shou transitioned to the finance department. This marked the transition from downsizing to a transitional period for ByteDance Games.

On May 31, ByteDance issued another internal letter where the new gaming head, Zhang Yunfan, stated that the gaming business had entered its "second phase." In this phase, ByteDance Games will adopt a long-term approach, focusing patiently on product development and operations. The new goal is to create "fun games" for users, emphasizing that "fun games" are fundamental.

Zhang Yunfan acknowledged the difficulty in practice, sharing a recent conversation where he was asked if metrics like DAU and profit would still be monitored. He affirmed they would, but stressed that anxiety over these should not distort their focus. He urged everyone, especially superiors, to remember that "fun games" are the core, and losing sight of this fundamental goal would lead nowhere.

Public data shows that since Q2 last year, most of ByteDance's overseas revenue has come from TikTok, with only a small portion from gaming and enterprise software services. This data indicates that gaming is no longer ByteDance's biggest advertiser; Douyin e-commerce is now the primary revenue source. In March last year, Liang Rubo told employees that ByteDance would focus on two core business areas: information platforms (including Douyin and TikTok) and e-commerce.

According to ByteDance's latest financial report, Q3 2023 saw a revenue surge of 43%, reaching $30.9 billion. For the first nine months of 2023, ByteDance's total revenue grew by 40%, totaling $84.4 billion. This growth was also concentrated in advertising and e-commerce sectors.

However, today's internal letter indicates that under new leadership from Zhang Yunfan, ByteDance will rejuvenate its in-house game development business. The revived ByteDance Games aims to become a new profit growth point for the company.