ByteDance just made 14 billion yuan in one deal.

Image source: Visual China

Author/Yang Jiyun

Report/PEdaily of the Investment Community

The largest domestic merger and acquisition in the new year is about to take place.

Recently, Reuters reported, citing sources familiar with the matter, that ByteDance is in in - depth negotiations with Saudi Arabia's Savvy Games Group to sell its game division, Shanghai Muti Technology. The valuation of this transaction is expected to be between $6 billion and $7 billion (approximately RMB 42 billion - 49 billion). It is reported that the deal could be finalized as early as this quarter.

You may not be familiar with Muti Technology at first hearing. It is the developer of the popular overseas mobile game "Mobile Legends: Bang Bang". Five years ago, ByteDance acquired it at a valuation of $4 billion. Now, based on the minimum transaction valuation of $6 billion, this investment will earn more than $2 billion (RMB 14 billion).

On one hand, ByteDance is selling its ace game, while on the other hand, it is going all - out in AI. At this moment, ByteDance's turn has taken on a new meaning.

Five years ago, ByteDance acquired a team

The outside world may not know that the founding team of Muti Technology had a Tencent background.

In 2014, Xu Zhenhua and Yuan Jing, former Tencent employees, decided to leave the comfort zone of big companies and founded Muti Technology in Shanghai. With the vision of "becoming a world - class game company", they took a different path from their contemporaries - avoiding the highly competitive domestic market and focusing on emerging overseas markets.

At that time, the Chinese mobile game market was in an explosive stage with fierce competition. Although there was a large user base, the entry barriers were high. In contrast, the mobile game penetration rate in overseas markets such as Southeast Asia and Latin America was low, and the supply was insufficient. There was no monopoly by giants, making it the best time to enter.

In the early days of its establishment, the Muti team had only about 20 people with limited resources. In the second year of its founding, Muti launched its first self - developed game, "Magic Rush: Heroes". This game, which combines card, tower defense, and strategy elements, unexpectedly became a hit after its overseas release, topping the best - selling lists in many countries. Its monthly revenue reached a maximum of 47 million yuan. Thus, Muti began to gain a foothold in the overseas market.

The turning point came in 2016. Realizing the global potential of MOBA mobile games, Muti introduced a new team from Perfect World and jointly established Shanghai Mulong to focus on the MOBA track. It took only eight months to complete the development and launch of its core product, "Mobile Legends: Bang Bang (MLBB, known as 'Mobile Legends' in the Chinese mainland)."

After that, a phenomenon - level hit game emerged. Two years after its launch, MLBB achieved explosive growth. With its lightweight design, low hardware requirements, and localized operation strategies, it quickly rose in the Southeast Asian market and became a "national - level" mobile game in countries such as Indonesia, the Philippines, and Malaysia. It was once called the "Southeast Asian version of Honor of Kings".

Beyond games, Muti also laid out the e - sports ecosystem in advance. Since 2017, Muti Technology has actively promoted "e - sports going global" and became the first Chinese company to establish an overseas professional e - sports system. Gradually, Muti Technology became an "invisible giant" in the overseas game market.

This attracted the attention of large Internet companies. In 2021, ByteDance and Tencent engaged in a fierce bidding war. Finally, ByteDance acquired Muti Technology in full at a valuation of $4 billion, and a new chapter began.

Now, selling to a Middle - Eastern tycoon

Let's turn our attention back to this acquisition. The Saudi Public Investment Fund (PIF), a Middle - Eastern tycoon, has emerged.

The buyer, Savvy Games Group, is an investment and strategic platform under PIF that focuses on the game and e - sports industries. Rumors about the negotiation between ByteDance and Savvy Games Group regarding Muti have been around for a long time, and now the deal is almost finalized.

Selling Muti is undoubtedly a further contraction of ByteDance's game business.

Back in 2021, ambitious ByteDance tried to break into the duopoly of Tencent and NetEase in the game industry. Through its game brand, Zhaoxi G uangnian, it acquired Muti, and Yuan Jing, the CEO of Muti, continued to stay. At that time, Zhaoxi Guangnian, as the overall brand of ByteDance's game business, was responsible for global distribution, IP cooperation, and new project incubation, while Muti focused on the MLBB ecosystem and the expansion of new IPs.

During the honeymoon period of the merger, synergistic effects emerged. ByteDance provided Muti with traffic resources such as TikTok, which promoted user growth of MLBB in Latin America, the Middle East, etc. Muti, in turn, provided Zhaoxi Guangnian with a mature overseas operation model. Muti was once regarded as ByteDance's top ace in the game - going - global strategy.

However, reality soon poured cold water on them. Although MLBB has remained at the top of the MOBA list in Southeast Asia, it has never broken into the mainstream in the European and American markets, and its ranking on the iOS best - selling list has long hovered outside the top 100. The Chinese mainland version has also failed to shake the dominant position of "Honor of Kings". More importantly, Muti has not launched a second hit game since MLBB.

Meanwhile, ByteDance's overall strategy has shifted. Since the second half of 2023, ByteDance has significantly reduced its investment in mid - to high - end games, laid off teams such as the Shanghai 101 Studio, and shifted its focus to casual games and UGC/AIGC. The resource allocation to Muti has also decreased accordingly.

In 2024, Zhang Yunfan was appointed as the CEO of Zhaoxi Guangnian and Muti, and the game business has taken a more pragmatic path. According to sources close to ByteDance, after PIF takes over, the existing management team of Muti Technology will remain unchanged, and Zhang Yunfan will no longer stay at ByteDance.

Currently, Muti and "Mobile Legends: Bang Bang" have been confirmed to be within the scope of the acquisition. In addition, the top - down shooting game "No Man's Land" developed by the Shanghai studio and the Guangzhou Lighthouse Studio will also be sold as a package. Some other game studios will remain at ByteDance.

It should be noted that currently about 86% of Muti's revenue comes from "Mobile Legends: Bang Bang". This hit game has exceeded 1.5 billion cumulative downloads globally, with a monthly active user base of over 110 million. It has remained in the top 10 of the popular game lists in more than 80 countries and regions around the world. Now, Muti Technology has more than 2,000 employees and has branches in many regions such as Southeast Asia and Latin America.

In any case, the giant ship has changed its course.

Recently spent 2.8 billion in Beijing to buy land and make heavy investment in AI

Games seem to be fading away, and now big companies only have AI in their sights.

On January 29 this year, Liang Rubo, the CEO of ByteDance, said at the company's all - staff meeting: "There are many important opportunities in the AI era. We should pursue the most important ones and climb the highest peaks." Industry "peaks" are rare, and AI is the most worthy historical opportunity window for full - scale investment at present. We must concentrate our efforts to tackle it.

Just yesterday (February 14), ByteDance announced the launch of the Doubao - Seed - 2.0 series of large models, which have been systematically optimized for the usage requirements of large - scale production environments. Previously, ByteDance's video model Seedance 2.0 went viral across the Internet. Another world - class model from China has become the most pleasant surprise at the beginning of 2026.

The Seed team, which created Seedance 2.0, was established by ByteDance with heavy investment. According to the data, Seed was founded in 2023 and is a department specifically set up by ByteDance for large - model research, with a staff of over a thousand. The leader of the department is Dr. Wu Yonghui, a former Google Fellow who participated in the development of Gemini. He joined ByteDance at the beginning of 2025 and took over Seed, reporting directly to CEO Liang Rubo.

"Exploring the upper limit of intelligence" - Seed is highly expected and enjoys a considerable amount of resource allocation within ByteDance. According to industry information, even the retired founder Zhang Yiming regularly participates in the review and discussion meetings of Seed's core technology team. It is considered to be "the department that ByteDance is most willing to invest money, talent, and technical resources in" at present.

Not long ago, ByteDance won the bid for the land parcels HD00 - 1603 - 01 and HD00 - 1603 - 03A of the Lan Jing Li Jia land acquisition project in Haidian District at a base price of 2.8 billion yuan. The land is located in Zhongguancun Street, Haidian District. It is rumored in the industry that ByteDance spent 2.8 billion to buy the land to establish a headquarters for the Seed team.

All these reflect the AI anxiety of Internet giants. China's AI is witnessing a battle among the gods. Big companies are taking actions one after another. Tencent's Yuanbao has initiated a red - envelope war first, Alibaba has spent 3 billion on red envelopes to promote Qianwen for ordering milk tea, and Baidu and others have also joined in. Everyone is competing for the super - entry in the AI era.

The Spring Festival Gala is about to start. It is reported that some out - of - town teams of ByteDance have gone to Beijing to stay on duty and will support Doubao during the Spring Festival. With the wave of AI, the most intense Spring Festival battle in history has begun.

This article is from the WeChat official account "Investment Community". Author: Yang Jiyun. Republished by 36Kr with permission.