TikTok is leveling up with a big push into gaming. According to Reuters, tests on minigames within the app are currently being conducted in Vietnam. The report comes as more technology companies are making moves into video game verticals. Kyle Clark, an investment advisor for Gerber Kawasaki Wealth and Investment Management, joined Cheddar News' Closing Bell to discuss. "With 1.6 billion daily users on TikTok, it would seem like adding gaming would only up that user base, up the engagement, and must be a pretty lucrative opportunity for the platform," he noted.

Closing Bell

 TikTok's Big Video Games Push Could Add to Platform's Strong User Engagement

elsewhere. Tiktok leveling up the company planning a big push into gaming according to a new report from Reuters tests are currently being conducted in Vietnam allowing users in the country to play many games on the app. But Tiktok's plans for gaming reportedly go way beyond both mini games and Vietnam the news coming is more technology companies are making moves in the gaming space and joining me now is Kyle, Clark investment advisor for Gerber. Kawasaki, Kyle, Thanks for coming on the show. How serious do you think Tiktok is about this push into gaming? Yeah, first and foremost. Thanks for having me today. You know, I think it's really impressive if we take a step back and we look at the monthly active users of Tiktok, I mean we're looking at 1.6 billion users, which is more than Twitter Snapchat and linkedin combined. And you know, you're seeing downloaded it more often than any other app really in this space in the past 5/4 And making it the world's most visited site basically in 2021. So they've done a really tremendous job of allowing producers and content creators to generate that content at scale and really have the ability to leverage that in one of the fastest, growing spaces. which is social media and now kind of moving towards another vertical, which is videos and video games specifically. I think it gives Tiktok an incredibly strong advantage, you know, when we're talking about the social media platform wars that are going on. Gaming is one of the most influential elements of online. You know, content and I think it's really, really smart and makes a lot of sense for Tiktok To Lean into this space, to Lean into the verticals that video games provide for the next opportunity of growth. So what's the monetize double opportunity here, Kyle? I mean with 1.6 billion daily users on Tiktok, it would seem like adding gaming would only up that user base up the engagement and must be a pretty lucrative opportunity for the platform. 100%. Yeah. With within game apps and mini games, it's definitely gonna boost user engagement. It's really smart. You know, Tiktokers love their platform and apps. They spend on average about 50 minutes per day on their platform. Some of the younger users as well spend looking at 90 minutes on the platform. So in terms of eyeballs, that's a lot of time on the platform. If you look at the numbers for Tiktok, even without gaming, just looking at the ad revenue alone, they're likely to triple this year to more than $11 billion. So adding video games is just gonna be another feather in the cap, so to speak for Tiktok specifically to diversify another revenue stream for them, not just on the social media platform side of things, but also another social engagement segment. Right? And they're now bringing entertainment and interaction to the platform. People, you know, for the most part forget that that Tiktok has also acquired a shanghai based company um, for monitor tune studios to be able to really leverage the mobile device opportunities within the video game space. And going head to head essentially with some big video game producers such as Tencent. So I really think, you know, ball's in their court in terms of their ability to execute. And that's really the next question is, what is that execution look like for Tiktok longer term. And let's talk about some of these specific style because they do see that Tiktok testing these html five games on its platform, that's pretty common a mini game, if you will, what do we know about that type of game and how it could benefit Tiktok? Yeah, 100%. You know, we saw this with other social media platforms as well, you know, specifically within facebook, where they launched instagram insta games several years back and really it created an incredible amount of popularity during that time. And I think Tiktok is taking a page out of that playbook. You know, we're also looking at companies as well like Netflix that are adding to their platform. You know, looking to increase and have about 50 games on their platforms by the end of this year. And I think it's really interesting when you take a look at the video game companies, right, They're really trying to make a push into creating more of a social environment, a community for their users. Um, and in players across the board. And Tiktok's kind of taking a basically a reverse stance on the opposite side of that equation, they're gonna be taking the social element of Tiktok and now introducing video games, which I think is really, really critical because community is ultimately the biggest leverage that Tiktok has when talking about user engagement and really focusing on monetizing those long term. So, you know, I wouldn't expect um I would be surprised if they wouldn't roll out video games um here in the United States towards the end of this year, during the holiday season as well, to really capitalize on user engagement on the platform. So, you know, I think it makes a lot of sense for Tiktok users and and quite honestly giving Tiktok users a reason to stay on the platform even longer. So, another question that I have is you mentioned facebook's parent company obviously meta trying to pivot into the metaverse, focusing on gaming as well as is netflix, that's a different medium and platform clearly than Tiktok, but does Tiktok have an upper hand here, the fact that it is mobile, it's on your phone, you can hold it in your hand, you don't necessarily have to interact with the T. V. Or start using Netflix on your phone, which you might not have been doing before. Right? Exactly right. When you're talking about 1.6 billion monthly active users, you know, most of the the content is being utilized on that phone. So being able to monetize that even further, the convenience of having, you know, a vigil, you know, digital content and something in your hand to play while passing the time rather than having to sit down, You know, take out the console and actually use it, I think is a huge advantage that Tiktok has. And it'll be interesting to see, you know, how they're able to maintain users playing video games when most of Tiktok's videos are, you know, 30 seconds. So it'll be very interesting to see how they're able to keep that engagement longer term. We will be watching closely. Certainly, a big opportunity for Tiktok. That's Kyle Clark, investment Advisor at Gerber, Kawasaki wealth and Investment Management. Thank you.