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ByteDance is planning to wind down its games unit Nuverse and withdraw from the mainstream video game industry, Reuters quoted people familiar with the matter on Monday. The Chinese internet behemoth was said ask employees that day to stop working on unreleased games by December and will seek to divest from titles already launched.

Bloomberg the same day reported ByteDance plans to axe several hundreds of jobs in gaming and phase out Nuverse. The company was reported to wind down projects under development and consider sales of existing titles. It was also weighing sales of Shanghai Moonton Technlogy Co., a studio it took over for US$4 billion in 2021, according to the report. TechCrunch that day also reported Nuverse is undergoing a round of mass layoffs, which was started on Monday and many employees are waiting a verdict on their future.

ByteDance later responded to Reuters it had made difficlut decision to restructure its gaming business following a review to center on long-term strategic growth areas.

Nuverse, a game developing and publishing brand under ByteDance, will significantly scale down its business, look for divestiture of existing titles with good performance while maintaining operation, and shut down all of unreleased titles except few innovative projects and related technology projects, ByteDance confirmed to TMTPost App on Tuesday. Nuverse told TMTPost it does have restructure and business adjustments to focus more on some of new types of games and exploration of relevant technologies. The ByteDance subsidiary set up in 2021 said it will continue work well on operation games already launched to fully protect the rights and interests of players.

ByteDance and Nuverse didn’t specify how many employees will be affacted during the restructure. They didn’t respond to queries about future of Moonton and another ByteDance;s gaming unit C4games.

ByteDance CEO Liang Rubo and Yan Shou, head of Nuverse, have discussed the decison to scale back repeatedly for a long time, people close to ByteDance revealed to TMTPost. According to the people, Liang believes ByteDance should make efforts on and move resources to more basic, innovative and imaginative projects rather than gaming, as the company has been working for the “big and comprehensive" projects in the past year, leaving the projects without any focus and scattered resources.

This is ByteDance’s second major action about its new businesses it foraied into these years in a month. Earlier this month, the Beijing-based company announced layoff and reorganization of Pico, its first attempt to explore the virtual reality (VR), without details such as how many roles will be impacted.

“After a careful review of our business, the industry and the market condition, we had some basic judgments as follows: the VR industry is at very early stage, and we previously were relatively more optimistic about the outlook of the industry and market, but the actual development is not as fast as we expected,”Pico CEO Zhou Hongwei said at an internal meeting.

Based on these judgments, Pico plans to make the restructure and the main purpose is to better focus on long-term exploration and breakthrough on the hardware and core technologies, which means Pico will double down those can create value in the long run, and accordingly scale down other investments in the short term, Zhou said.

The overhaul is deemed as the biggest one since Pico was taken over by Bytedance. Pico is expected to cut “hundreds” of jobs globally, Reuters cited people with knowledge of the matter. Prior to Zhou’s announcement, reports about Pico’s mass layoff and winding down have been swirling last month.

Pico was reported to lower its sales targets for the year, shift its focus from expanding its market share to deepening its engagement with existing users, and have significantly reduced the team size through multiple rounds of layoffs so far this year. It was also said to have laid off many employees in February, without offering the opportunities to transfer to other positions within ByteDance, and the number of its departing employees increased to nearly half of 2,000, which was the headcount at its prime time in 2022 after the acquisition.

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