“Elusive Generation Z and millennial consumers aren’t focused on traditional media or linear TV, but instead…gaming, social media and live streaming,” IDG’s Yoshio Osaki says
Millennials and Gen Z are spending more time than ever on social media, during the pandemic, and their growing interest in video gaming is spurring TikTok to position itself as the main social network for gamers.
TikTok’s parent company, ByteDance, already is behind three games, including a mobile adaptation of a Chinese poker game called “Xiaomei Fights the Landlord,” which is hugely popular in Asia and rivals a similar digital card game by Tencent.
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Yoshio Osaki, gaming analyst and CEO of IDG Consulting, said “TikTok is a perfect fit for gaming, and since TikTok’s parent company ByteDance is already developing games, TikTok is also building out a new advantage with a publishing function that can leverage platform-exclusive content.”
“Elusive Generation Z and millennial consumers aren’t focused on traditional media or linear TV, but instead are spending more time and money on gaming, social media, and live streaming, and TikTok aligns with the sweet spot across those areas,” Osaki said. “TikTok content creators have similar devoted followings as the leading YouTube and Twitch content creators, so gaming can be a high-monetizing opportunity for TikTok creators.”
ByteDance, which is based in China, heavily leaned into TikTok (and the Chinese version of the app, called Douyin) when promoting “Xioamei.” The South China Morning Post reported in September the game racked up over 160 million views on the platform.
The synergy between TikTok (or Douyin) and ByteDance’s gaming efforts became even clearer when TikTok announced it would be the principal sponsor for London-based esports organization Tundra — the first time the company has put its name behind (and on the jerseys of) a professional esports team.
While TikTok doesn’t directly monetize on the app, the company said it encourages its talent to take brand deals that provide them lucrative sponsorship opportunities in exchange for reviewing or showing off free swag.
Gaming is one of the fastest-growing categories on TikTok, a company spokesperson told TheWrap, adding that the app is seeing an “overall increase in popularity” of hashtags that are related to gaming content. Similar to Twitter, TikTok users usually find content to watch based on tags that interest them. Gaming tags in the app like #mobilegame and #esportsforall gained 2.6 billion and 4.6 billion video views respectively “over the last few months,” the company said. The general #gaming tag has a combined 48 billion video views to date.
Several notable video game brands and publishers have TikTok accounts, including Epic Game’s ‘Fortnite’, PUBG Esports, ‘Clash Royale,’ Tetris Mobile, IGN, and Microsoft’s Xbox.
Unlike Twitch or YouTube, the advantage TikTok has is its short-form approach, which lends itself to quick, highly produced gaming clips or match highlights that easily go viral.
“We’ve seen the gaming category on TikTok organically grow quite rapidly,” TikTok’s gaming business development manager Chris Castagnetto told TheWrap. “We believe the pandemic has contributed to the popularity of gaming, and we’ve seen an influx of more high-quality and diverse gaming videos ranging from memes to pure gameplay.”
Though TikTok is growing rapidly, it’s unlikely to completely outpace YouTube or live streaming sites like Twitch in the United States, and that’s partly because the two aren’t exactly in the same lane of competition, SensorTower mobile insights strategist Stephanie Chan told TheWrap.
“We don’t see TikTok eclipsing YouTube as the dominant source for gaming content due to its focus on short-form videos, which makes it less suited for the sort of in-depth reviews and walkthroughs that have made YouTube the go-to platform for gamers,” Chan said. “It’s possible that TikTok’s live streaming capabilities could present a challenge to Twitch, but Amazon’s property has a formidable footprint already among the most hardcore players who may view ByteDance’s offering as too mainstream or inauthentic.”
Chan was quick to note that “We already saw Google, with all its expertise and resources, attempt to take on Twitch with YouTube Gaming and ultimately concede” after a lack of positive feedback from gamers.
ByteDance’s game design efforts are currently eclipsed by larger Chinese gaming firms like Tencent and NetEase, but its hold over one of the largest global social networks could give it an edge. The virality of TikTok clips means that new games can receive a massive boost of attention (and, eventually, downloads) if they take off on TikTok.
Two recent games that took advantage of this phenomenon were “Among Us,” a mobile multiplayer phone game from mobile game studio InnerSloth and “Fall Guys,” a battle royale obstacle course title published by Devolver Digital for the PC and PlayStation 4.
“Both titles really exploded after they were spotlighted by the Twitch influencer sphere, later reaching meme-level status on TikTok and becoming the focus of countless YouTube videos,” Chan said. “What we’re seeing is a cascade effect of gaming making enormous gains in the past several months.”
ByteDance announced it was hiring about 1,000 new employees in China in mid-September — the majority of those roles are in business development while 200 are technical positions.
Gaming analyst Liao Xuhua told the South China Morning Post that ByteDance will need to hire more people to truly compete with NetEase or Tencent, and noted that ByteDance had fewer than 2,000 employees on its game design team in September.
“The top 20 gaming companies in China all have at least this many people,” Liao told SCMP last month. “NetEase Games, for example, has more than 10,000. So if ByteDance wants to be a giant, the current size of its gaming team is far too small.”
ByteDance is also in the midst of stalled talks to sell the TikTok assets to a U.S.-based company. Tech giant Oracle put in a bid in September but it’s not yet been approved by the Federal Trade Commission or President Trump, who demanded earlier this year that TikTok divest from its Chinese ownership or risk an outright ban on U.S. app stores.
According to SensorTower, the app’s install count peaked in March with 119.8 million installs globally, but has since fluctuated to “pre-coronavirus levels.”
Installations of the TikTok app have fluctuated in western markets since Trump announced his crusade against its Chinese parent company. The app was also banned from Indian app stores at the end of June, which cut out the company’s largest user base.
TikTok downloads numbered 61 million in September, SensorTower data found, up 2% annually.