Despite pulling back from its gaming ambitions late last year, TikTok owner ByteDance saw its total profits rise in China by approximately 60% in 2023. This growth outpaced Chinese competitors Tencent and Alibaba.
Bloomberg reported that ByteDance’s revenues grew substantially last year too, with earnings before interest, tax, depreciation and amortisation rising from roughly $25 billion in 2022 to over $40 billion in 2023.
The figures come from anonymous individuals familiar with the matter, who added that sales climbed from $80 billion to $120 billion year-on-year.
Scaling back, scaling up
As well as outperforming Chinese tech giant Tencent on growth rate, ByteDance’s apparent revenue and profits place it ahead of Tencent’s totals last year. However, this success can be attributed to expanding TikTok rather than it being from video games, explaining why ByteDance looked to recalibrate in 2023 with plans to focus on its “core business“.
The company has laid off hundreds of game development staff and proven yet again that gaming is a hard business to get into successfully, even when attempting to slip in by virtue of buying companies already involved.
This rollback from gaming but continued growth with TikTok likely explains the cooling off of the rivalry between ByteDance and Tencent – the latter firmly sticking to gaming while its social channels aren’t quite as successful. In fact, Tencent even began advertising DreamStar on ByteDance platforms last winter, given the scope of their outreach.
And provided the TikTok maker’s supposed internal figures are accurate, this would also make ByteDance among the fastest-growing tech giants of the year. This, together with the overseas rollout of TikTok Shop facilitating even more earnings, explains the company’s reluctance to sell TikTok in the US despite the House of Representatives’ recent ruling.
While it’s difficult to envisage ByteDance actually selling its cash cow, selling game makers has not only been on the cards but turned into reality – shrewdly stepping away from gaming during a time of tumult for Chinese regulatory measures, and selling two of its game studios to Tencent.