Recent downsizing by TikTok outfit ByteDance has sent tremors through China’s gaming community.
Previously an aggressive acquirer of companies and hirer, ByteDance is said to have dismissed many junior employees from casual and hypercasual developer Ohayoo.
The studio was created in 2018 with the aim of capturing users of its short video apps, according to a former employee speaking with South China Morning Post.
Its games have been downloaded more than 500 million times.
It's thought early 100 employees have been affected.
The Ohayoo studio has around 350 employees, and a report on Leiphone states that the studio asked 79 employees to either go home or apply for other positions within the company.
However, the report noted that some internal positions are limited, meaning many employees will most likely end up leaving.
China's new rules
Following President Xi Jinping highlighting game addiction as an issue for society, games now require players to set up accounts with ID, and children are limited to playing for three hours per week only on weekends and holidays.
Since July, China’s gaming regulator has suspended license approvals for new games.
The effect on casual games has been severe. This is largely because they have fewer loyal users than hardcore console games.
Prior to November 2020, Ohayoo had published nine casual games which each made at least $15 million in revenue. This was according to Xu Peixiang, once the studio’s general manager, who has since resigned this August.
ByteDance subsidiary Nuverse acquired Chinese developer C4games in April 2021, while also spending a reported $4 billion buying Mobile Legends: Bang Bang developer Moonton in March