China’s No 2 short video app operator Kuaishou shuts down gaming project in Beijing in restructuring move
- Kuaishou in March disbanded a video gaming project in Beijing, laying off around 30 people
- The company still runs a number of video gaming operations in Beijing, Shanghai, Hangzhou and Guangzhou
Kuaishou did not immediately respond to a request for comment. The company’s Hong Kong-listed shares closed 1.32 per cent lower at HK$55.95 on Tuesday.
Kuaishou set up its video gaming subsidiary, Spark Nexa, in 2021 to focus on self-developed games from a network of studios based in multiple Chinese cities including Beijing, Shanghai, Guangzhou and Hangzhou.
In March and April, China’s video gaming regulator approved Kuaishou’s domestic release of two video games, Lord of Mysteries and Wujinmenghui, respectively. The company’s video gaming business, however, has so far failed to contribute significant revenue to Kuaishou.
Kuaishou last year reported total revenue of 113.5 billion yuan (US$15.67 billion), up 20.5 per cent from 2022, which was mostly attributed to its online marketing and live streaming businesses. Video gaming was barely mentioned in the company’s financial earnings last year.
According to data from the China Audio-Video and Digital Publishing Association, the country’s semi-official industry body, video game revenue nationwide rose 14 per cent year on year to 303 billion yuan in 2023.
While that compares favourably to the 10.3 per cent decline in 2022, it remains far behind the industry’s 38 per cent revenue growth a decade ago.