HONG KONG -- TikTok owner ByteDance is disbanding one of its main game studios due to its disappointing performance.

According to a company manager, half of the staff at Shanghai's 101 Studio will be shifted to other parts of the company while the rest could be laid off as "the results of a few projects didn't meet expectations." The studio has between 300 and 350 employees.

Some of the staff from 101 will join Pico Interactive, a virtual reality startup that ByteDance bought last year. The company last year also acquired studio Moonton Games.

China's gaming industry has been under pressure from a nine-month pause in official approvals of new releases and new restrictions on youth play. The drought in approvals finally ended in April with the issuance of 45 new licenses and then another 60 this month. However, most of the licenses went to small independent studios, leaving ByteDance and others still waiting.

The core team at 101 Studio came from Shanghai Mokun Technology, a game developer ByteDance acquired for 110 million yuan ($16.4 million) in 2019. This was seen as laying the groundwork to challenge the dominance of Tencent Holdings in mobile gaming.

The job cuts at 101 Studio were reported earlier by Bloomberg.

Over the last year, other ByteDance studios have also trimmed staff on a smaller scale.

Last month, Chinese media reported that Tencent was also slashing staff at its game development unit.