Chinese tech giant, ByteDance has engaged in discussions with Saudi Arabia’s Savvy Games Group regarding the sale of Shanghai Moonton Technology, the developer of the widely played mobile title Mobile Legends: Bang Bang.
Officials have reportedly placed a value on the transaction worth approximately $6 billion to $7 billion. People familiar with the matter say ByteDance is close to selling Shanghai Moonton Technology, with an agreement possible as soon as this quarter.
A successful completion of this sale would put it as one of the largest cross-border transactions in the history of Chinese video games and would be a major milestone in Saudi Arabia’s efforts to promote interactive entertainment.
Transaction signals ByteDance retreat from games
According to people close to the negotiations cited by Reuters, they are at an advanced stage and have tentatively reached priority agreements concerning the essential terms of the transaction. However, nothing has yet to be formally executed.
Both ByteDance and Savvy Games Group have kept their comments confidential and have asked that their identities be withheld, citing a lack of clearance to discuss the media.
ByteDance’s ongoing talks come following its reduced focus on video gaming as a result of the difficulty in competing against larger players like Tencent, which requires significant investments.
ByteDance is cutting back on game development by selling off or trimming its assets and cutting the number of employees in the gaming division.
The acquisition of Moonton in 2021 was a significant investment at an estimated value of $4 billion, and Moonton continues to hold significant value within the entire company portfolio with an estimated 110 million active players.
About two years ago, it was reported that the Beijing-based company told employees that it would shut down most game projects. The company had since been reported to be in talks with multiple potential buyers for its video game operations, including Moonton, the video game studio it acquired for $4 billion in 2021.
The growth of mobile free-to-play games continues to provide an opportunity for continued participation in mobile gaming. Mobile gaming is still growing through esports in Southeast Asia.
Move advances Saudi global gaming strategy
Saudi Arabia’s Savvy Games Group has designs to become the largest video games and esports organization in the world with support from the Saudi government and its Public Investment Fund (PIF).
Savvy CEO Brian Ward said last year, “The geopolitical issues between the United States and China provided an opportunity for Savvy to reach agreements within the area.”
Savvy has previously developed extensive experience with Chinese and international acquisitions. One such example is the $265 million acquisition of Hero Esports in Shanghai, China.
As part of Crown Prince Mohammed bin Salman’s vision of diversifying Saudi Arabian industries, he wants to grow the gaming industry in Saudi Arabia, and he is a passionate video gamer himself.
The anticipated Moonton sale has vast significance to the global gaming industry because it represents accelerated competition for established franchises, a greater demand for live service expertise, and a growing number of loyal online gaming communities as capital-rich purchasers race to acquire scale in a consolidating marketplace.
Source: https://www.cryptopolitan.com/bytedance-eyes-moonton-exit-in-a-6bn-deal/
