ByteDance plans to buy part or all of the 27.6 percent CMGE stake held by Fairview Ridge Investment controlled by CMGE chairman Xiao Jian and vice chairman Sin Hendrick.

Eight year old ByteDance has identified gaming as its next strategic growth area and has been scouting for investment opportunities for months to build up its gaming portfolio.

Market leader Tencent Holdings proposed a $1.5 billion acquisition of Leyou Technologies Holdings in August. That made CMGE more of a target for ByteDance.

ByteDance has already been relatively successful with casual mobile games that mainly make money through advertising. It plans to release its first “hardcore” game in the April-June quarter.

Hardcore games can be a steady source of revenue as users tend to keep playing popular titles for years and are willing to make in-app purchase for items that enhance game play, such as weapons.