HONG KONG - TikTok owner ByteDance is discussing the sale of its gaming unit Moonton Technology with potential buyers, two years after it acquired the Shanghai-based studio in a deal that valued it at $4 billion, five people familiar with the matter said.

Shanghai-based Moonton, which has developed the popular mobile game “Mobile Legends: Bang Bang”, was acquired by ByteDance in 2021. At the time, it was seen as ByteDance’s biggest commitment to become a major player in the $187 billion global video games market.

Companies that ByteDance has met to discuss the sale of the company include at least one Saudi-based firm, two people familiar with the matter said.

One of the two people said that the talks were still at an early stage and a deal was not guaranteed. The person added that the plan comes as ByteDance is choosing to focus resources on its core business.

ByteDance declined to comment.

ByteDance's foray into video games has proven to be rocky so far. Founded in 2014, Moonton found success with multiplayer online battle arena game "Mobile Legends". But the studio has yet to release another similar hit game.

Moonton's unremarkable performance since its acquisition is one of the reasons behind ByteDance’s desire to sell, people told Reuters.

ByteDance has met with other setbacks in its gaming expansion.

Last year, ByteDance disbanded its Shanghai-based game development unit 101 Studio. This month, ByteDance said it would overhaul its virtual reality (VR) unit Pico to focus on hardware, cutting software and games-related jobs.

ByteDance’ acquisition of Moonton was also followed by a sudden months-long crackdown by the Chinese government on the video games sector, which caused the sector to shrink for the first time last year.

Moonton says on its website that it has more than 1,600 employees worldwide and apart from mainland China also operates in Indonesia, Malaysia, Singapore and Hong Kong.

(Reporting by Josh Ye; Editing by Muralikumar Anantharaman and Kim Coghill)