ByteDance's move into gaming is already paying off
Three of the top five free mobile games in China on the first day of Lunar New Year were published by ByteDance, showing early signs of a challenge to Tencent
Early moves from TikTok maker ByteDance into gaming are showing signs of success, and the company hasn’t even developed a single game yet. But the company is already publishing games made by others, and three of those games broke into the top five free mobile games in China on the first day of the Lunar New Year holiday.
New data from Qimai Data and TF Securities shows how ByteDance’s early efforts to challenge Tencent in gaming are already paying off. One of the games published by ByteDance even took the top spot. The game, Xiaomei Fights the Landlord, has proven popular as a mobile adaptation of a traditional Chinese poker game.
The other two ByteDance games on the list are My Home - Design Dreams and My Kung Fu is Exceptionally Good. The former is a home decoration game that ByteDance co-published with Kunpo, while the latter is a roguelike action game solely published by ByteDance, according to TF Securities.
But the card game is ByteDance’s big success. It’s based on dou dizhu, or fighting the landlord. It’s the most popular poker game in China and a traditional game for friends and family during Lunar New Year. Putting out a simple poker game might not sound innovative or impressive, but ByteDance is a newcomer treading on turf long dominated by Tencent.
Tencent has its own popular version of fighting the landlord titled Happy Poker. By publishing a similar game, ByteDance is showing it can take on Tencent in mobile gaming by relying on third-party developers and the strength of its own platforms, where the game was heavily promoted.
Xiaomei Fights the Landlord is developed by Yaoji Technology, which might help the game’s popularity. Before Yaoji was a technology company, it was China’s most well-known playing cards manufacturer.
More importantly, ByteDance heavily promoted the game on its platforms, including Douyin, the Chinese version of TikTok, and popular news aggregation app Toutiao. Chinese gaming media reported that Xiaomei Fights the Landlord released 1,388 different videos on Douyin, racking up more than 160 million views.
While Apple’s iOS App Store lists the game as published by Yuwan Games, analysts from half a dozen financial institutions have stated that Xiaomei Fights the Landlord is published solely by ByteDance. ByteDance didn’t respond to a request for comment.
In response to ByteDance’s recent success, analysts from TF Securities wrote, “In 2020, ByteDance’s march into gaming is definitely a trend that is worth the most attention.”
ByteDance appears to have big gaming ambitions. It was reported in January that the company is planning an assault on Tencent’s mobile gaming kingdom by building up a gaming division with more than 1,000 staff members.
Even though ByteDance has proven capable at getting people to download its games, though, it’s not close to generating the kind of gaming revenue that Tencent sees. Tencent dominates mobile gaming in China with popular titles like Honor of Kings (aka Arena of Valor) and the local version of PUBG Mobile titled Game for Peace. The latter was so popular over the holiday while people were stuck indoors because of the coronavirus outbreak that a flood of gamers overwhelmed the servers.
But signs are good for ByteDance to grow gaming revenue. Analysts from Soochow Securities highlighted the way Xiaomei Fights the Landlord incentivizes players to watch ads in exchange for rewards.
“[This monetization scheme] has significantly broadened the scope through which it can monetize users,” the analysts wrote.
There’s no mistaking that ByteDance still has a steep climb to challenge Tencent, though. Tencent’s titles took up half of the top 10 highest-grossing games on iOS. TF Securities estimates that Tencent’s daily revenue during this holiday season might reach as much as 2 billion yuan (US$285 million).