(Yicai) Nov. 27 -- Nuverse will make organizational and business changes as ByteDance’s main video game publisher shifts focus to exploring several innovative games and technologies, it told Yicai, after a report said the firm faces a major scaling down.

Despite the changes, Nuverse will still continue to operate existing products to safeguard the rights and interests of players, the Beijing-based company said today.

Financial media outlet China Star Market reported yesterday that Nuverse will undergo large-scale business adjustments, scrapping all unreleased games and selling existing titles. Sources also told Yicai that Nuverse’s parent company ByteDance, the Chinese operator of TikTok, plans to radically shrink the subsidiary after earlier this month announcing layoffs at its virtual reality unit.

The changes were decided upon after talks between Liang Rubo, chief executive of ByteDance, and its gaming business chief Yan Shou. An insider said Liang thinks that although the gaming business has certain achievements under its belt, projects have not been focused enough in the past few years, and scattered resources should be concentrated on more innovative projects.

Bytedance’s entry into the gaming sector was seen as a strategic move to diversify its business and tap into the lucrative mobile gaming market, with Nuverse aiming to create a global gaming ecosystem by leveraging ByteDance's vast user base and experience in content creation and distribution. But the period of explosive growth in China’s gaming sector is over.

Founded in 2019, Nuverse launched its first self-developed game Crystal of Atlan in July and its Apple Store turnover reached nearly CNY70 million (USD9.8 million) in a week. Moreover, in the middle of this month, it debuted Earth Revival, a shooting game themed on doomsday survival.

Though Bytedance has advantages in capital and traffic, it does not mean that it can do well in the gaming sector, industry analyst Liao Xuhua pointed out to Yicai.

ByteDance’s VR unit Pico, which has undergone a series of layoffs since the start of this year, announced a big headcount cull earlier this month, though its operations will continue as normal, the company told Yicai.

Revenue at privately held ByteDance jumped 40 percent to USD29 billion (USD4.1 billion) in the second quarter from a year ago, according to US news outlet The Information. First-half income was USD54 billion. ByteDance has not confirmed the figures.

Editors: Dou Shicong, Emmi Laine