Tencent-backed Chinese food delivery giant Meituan Dianping is making plans to enter the gaming business, after scaling back on its ride-sharing and bike-sharing business.
According to The South China Morning Post, there have been several job postings on Chinese recruitment sites by Meituan, with the positions seeking people with least five years of experience in coding, designing and producing games, and offering an annual salary of up to 530,000 yuan ($78,300).
In a post on WeChat, Wang Huiwen, the co-founder and senior vice-president of Meituan confirmed the move, saying: “I’m just giving it a try, don’t overthink it.”
Meituan scaled back its bike-sharing and ride-hailing services in November 2018 after announcing operating losses of RMB 3.45bn ($497m) for the June to September quarter. It entered the bike-sharing business in 2018 when it acquired Mobike for $2.7bn. However, the bike-sharing market has faltered in China and the company is now downsizing to avoid oversupply.
The gaming industry in China is facing a similarly challenging time as Chinese government freezes the approval process for new games produced by game producers, including Tencent, the world's largest gaming company.
The regulatory changes have had a significant impact on Tencent, which reported its first profit decline in a decade and has lost more than $200bn in market value since the start of 2018.
This has forced it to look to overseas markets for its gaming business, signing an agreement with Singapore-based Sea, of which it is the largest investor, to allow Sea's digital entertainment arm Garena to publish Tencent’s mobile and computer games in Indonesia, Taiwan, Thailand, the Philippines, Malaysia, and Singapore.
It announced its first restructuring in six years at the start of October 2018, consolidating its business units combining online and mobile internet into one unit and will launch a new division to focus on business services and cloud computing.
As part of the restructuring, it cut the marketing budget of its gaming division and reduced the branding budgets for mature games into half and cutting spending to games not coming out until 2019, as well as for underperforming games.