The competition between Tencent and ByteDance is gaining momentum. This time, TikTok‘s parent company has invested ¥100 million ($15.4 million) in Reworld, the local equivalent of Roblox. The deal occurred after Roblox China, supported by Tencent, received a license to work in China.
One of the Reworld games. Source: SCMP
The investment was reported by the South China Morning Post portal, citing its own sources.
As a result of the transaction, Yan Shou, the head of the ByteDance gaming department, joined the board of directors of Reworld. Shu also received an unnamed number of developer shares.
TikTok’s parent company is not investing in Reworld for the first time. She previously invested $43 million in it, according to Tianyancha and Qichacha platforms. According to CrunchBase, the game developers previously attracted two tranches of $14 million and $42 million. The leader in both was the Chinese Joy Capital.
Recently, ByteDance as a whole has become increasingly active in the gaming M&A market. For example, just last week a Chinese corporation bought the studio C4games, and a month ago — the studio Moonton.
Analysts believe that thanks to such purchases and investments, the company is gaining a price for entering the stock exchange. On the other hand, it is obvious that ByteDance is striving to take Tencent’s place in the video game market.
Investing in Reworld is a direct bid to compete with colossus. The project aims at the same niche that Roblox formed, supported by Tencent in the Middle Kingdom (the game just received a license last February). Although, of course, it is still very early to talk about its possible success.
Like Roblox, Reworld users can create their own games. The platform was launched in 2017. By the end of last year, its audience was 1.8 thousand people, and the number of games on the site exceeded 3.4 thousand. For comparison, Roblox has 8 million users and 20 million games.