Baidu withdraws from video game business due to restrictions in China

Chinese search engine Baidu It is laying out at least 100 employees at its video game development unit to reduce losses under China ‘s ongoing crackdown on the sector, two sources reported. The Beijing – based company will significantly reduce its video game development team and stop providing services for video games developed by external studios, they said. South China Morning Post two different sources, who requested anonymity without being authorized to speak the matter in public.

The decision was announced to several employees this week, the sources said. The exact number of employees to be made redundant is unknown and BaiduAs a company, he declined to comment. Decision of the company, listed on the Nasdaq And in Hong Kong, the latest sign is that China's crackdown on video games has begun to hit the industry. China restricts playtime for teens under 18 to a maximum of three hours a week, and the Chinese government has suspended new release licenses from the end of July.

Baidu, once considered “Google of China“But a tech giant has been emerging like that ever since ByteDance Y. Meituan, posted a net loss of 16.6 billion yuan (more than 2.60 billion US dollars) in the last quarter, after reducing its investments by 18.9 billion yuan (more than 2.96 billion US dollars), based on financial results issued last month.

The difficulties in video games come at a time when the company is investing heavily in sectors of “tech“Such as unmanned vehicles and semiconductors, but the immediate prospects for profit in these markets are remote, due to their technical complexity and increasing competition. In July, Baidu He said he was revamping his video game business, noting that he was developing a portfolio of 23 titles. The company's entry into video games dates back to 2013, when it was acquired 91 Wireless and founded Game Duoku.

However, it was announced Baidu The deepening of the video game business coincided with China's campaign to restrict video games due to concerns over video game addiction among minors in the country. In August, a state media article called video games “spiritual opium“, Continued the regulator's decision to ban minors under 18 from playing for more than three hours a week. In recent weeks, Chinese internet companies have laid off their employees as Chinese crackdowns seem set to continue in the new year, with the short video giant Kuaishou, a rival ByteDance, That works TikTok, and the video streaming platform iQiyi, property of Baidu, cut their payroll.

Fountain: South China Morning Post

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