Author | Hu Shu Editor| Luo Lijuan
The game track is plunged into a double day of ice and fire.
On the one hand, the investment and financing of the game track in 2021 has reached a peak.
According to Gamma data, a total of 209 investments occurred in China's game tracks throughout the year, with a total amount of 25.88 billion yuan. According to the statistics of the game media "Game Gyro", in the past year, there have been 342 investment and financing mergers and acquisitions in the game track worldwide, all of which have exceeded previous years.
In particular, Roblox and "Original God" and other "meta-universe" concepts, VC and PE have entered, Hillhouse, Zhen Fund, Sequoia, Five Source Capital, Challenger and other capitals have rapidly expanded their layout. It is reported that Sequoia KPI last year invested in 50 meta-universe game companies; there are three teams within Wuyuan Capital that look at the meta-universe field at the same time.
The game manufacturers have also set off a "burning money" battle with a huge gap.
According to the statistics of "Game Gyro", in one year, Tencent invested 102 in the game field, which exceeded the sum of the investments of B Station, NetEase and ByteDance, with a total amount of 20.62 billion yuan; during the year, ByteDance completed two huge acquisitions of Mu Hitomi Technology and Pico (Little Bird Look) up to 5 billion US dollars and 9 billion yuan respectively.
But on the other hand, the heat of investment has not been transmitted to the new mobile game market. In the mobile games launched in 2021, both the proportion of flowing water and the number of new mobile games entering the top 100 flow list are declining.
In the past year, the success of Miha's "Original God" once gave capital and small and medium-sized enterprises the confidence to "overtake in the corner" to win over the big factories. But now it seems that whether it is the feedback of the market or the increasingly harsh industry environment, this confidence has been gradually broken.
In the popular new tour, the big factory still accounts for the main right to speak. The "League of Legends Mobile Game" launched by Tencent's wholly-owned subsidiary Fist and the "Harry Potter: Magical Awakening" created by NetEase with the help of film and television IP have quickly harvested the market; Perfect World has benchmarked "Original God" at the end of the year, and "Magic Tower" with the controversy online has also entered the top three of the best-seller list.
However, no matter from the comprehensive consideration of gameplay, sales, influence or word of mouth, these big manufacturers and new games have not reached the height of the previous "Original God", nor have they broken through the upper limit of their own masterpieces.
The secondary market votes with its feet. Even if the primary market investment and financing is hot, from December 2020 to August 2021, the sum of the market value of the top 10 game companies in the domestic market value has dropped by more than 700 billion yuan.
In 2022, whether it is a large manufacturer or a small and medium-sized game company, it is urgent to find a better solution.
01 Hot out of a number of "new highs"
How hot is the investment and financing of the game track in 2021?
In one case, the celadon game, which became famous with the game "The Strongest Snail", landed on the Hong Kong Stock Exchange in December last year. In the 8 months before the listing, Celadon Games accelerated the completion of two rounds of financing, and the array of investors stood on Tencent, Ali, B Station, Boyu Capital and other "big guys" in one go.
When Celadon Ipo, the valuation soared to 3 billion yuan, and the market value after the listing reached HK$7.7 billion.
In less than half a year, the code-free multiplayer interactive entertainment creation platform "Yahaha" has obtained hundreds of millions of investments from investors such as Zhen Fund, Wuyuan Capital, BAI Capital, Xiaomi, Station B, Hillhouse; overseas game operation service provider "Coron Halo" has received investment from Qingyu Investment and Challenger Capital; AI game solution provider rct AI has received investment from more than a dozen investment institutions for two consecutive times...
Hillhouse, Zhen Fund, Sequoia, Wuyuan Capital, Challenger and other capitals have gone down.
At a summit in the first half of 2021, Zhou Kui, a partner at Sequoia Capital China Fund, also said that the digital media or digital entertainment industry is one of Sequoia's most concerned areas.
And according to the statistics of the game media "Game Gyro", in 2021, a total of 342 investment and financing, mergers and acquisitions, and increased holdings occurred in the game track worldwide. Among them, 122 cases overseas and 220 cases at home are more than double the number of cases in 2021 (108 cases) in china.
According to the "2021 China Game Market Investment and Financing Survey Report" released by Gamma Data, in 2021, a total of 209 investments occurred in China's game field, with a total amount of 25.88 billion yuan. In terms of the number of investment events, the whole year of 2021 has exceeded the sum of the two years of 2019 and 2020.
From the perspective of the business type of the invested enterprises, "game research and development" has always been the focus of capital attention, accounting for more than 60% in 6 years. And in 2021, this proportion is still expanding, reaching 80.38%.
From the perspective of the time of establishment, start-ups that have been established for less than 3 years have always been the focus of capital attention. However, in the past two years, this proportion has shrunk, and companies that have been established for more than 3 years are receiving more capital attention. Good start-up games are becoming scarcer, and investors are more cautious.
In the past year, Tencent's investment activity has far exceeded that of previous years, and it is the first in the industry in terms of the number and amount of investment.
According to IT Orange data, Tencent invested in 59 game companies in 2021. In the past 11 years, Tencent's investment in games has increased, with a total of 188 game investments.
The data does not include unpublished events. According to the statistics of "Ranger Network" and "Game Gyro", Tencent's investment, mergers and acquisitions and increase in the game field in 2021 are above 100. Gamma data disclosure is 92, and Tencent's investment in game investment in 2020 and 2021 exceeded 40 billion yuan.
From the perspective of investment style, Tencent's investment in games before 2020 is "open and closed", mainly for the acquisition or investment of more mature game teams. However, after 2020, with the intensification of industry competition, Tencent's investment style has changed to "casting a wide net, small amount, full coverage", mostly entering small and medium-sized game companies in the form of "strategic investment", and using a small amount of equity (about 5%-20%).
Also becoming radical in investing in the game is Station B. According to Ene Cow data, in 2021, Station B participated in a total of 15 related investments in the field of domestic games. Among them, it includes participating in a single round of 100 million-level financing of Heartbeat Network, China Mobile Games and Heartlight Flowing Beauty.
Source: Ene Cow Data 24/7 Technology Mapping
From 2016 to 2020, Station B invested only 12 in game companies, and in 2021, it has exceeded the sum of the past 5 years. Moreover, most of the investment in Station B before 2021 is seed round and angel round investment, and the disclosed amount is not high.
Analyzing the reasons for its frequent actions, on the one hand, the new products represented by the late B station have been difficult to pick up the early classic games, and the product pressure is large; on the other hand, the "second dimension" is the biggest advantage of the B station, but at present, there are more first- and second-line game manufacturers betting on the secondary category, and the living space of the B station is being compressed.
ByteDance, which lacks a game foundation but is eager to find a growth curve, has also invested in the game track a lot more aggressively, and in 2021, it has participated in 6 investments in China, and the number and frequency have reached a new high.
Source: Ene Cow Data 24/7 Technology Mapping
In Addition, byte's investment amount is larger, in March 2021, Byte acquired Mutong Technology, and the rumored transaction amount was as high as $4 billion. At the end of December, Byte had a wholly-owned stake in VR hardware manufacturer Pico (Little Bird Look), and according to the transfer price of the Shandong Property Rights Exchange Center, the valuation of Little Bird Look was about 9.059 billion yuan, confirming the rumor that ByteDance's acquisition transaction amount was 9 billion yuan.
It is not difficult to see that ByteDance's investment idea is to quickly make up for the shortcomings of self-research, quickly obtain part of the right to speak in a certain category of games, and carry out user disputes with traditional game manufacturers such as Tencent and NetEase. However, from the current point of view, the uncertainty of ByteDance's game investment layout is still large.
In addition, according to the statistics of the game media "Game Gyro", NetEase has a total of 17 investments in 2021, and the investment volume has increased by 5 times year-on-year. IGG (9 cases), China Mobile Games (7 cases), Kaiying Network (5 cases), 37 Interactive Entertainment (4 cases), Lingxi Interactive Entertainment (3 cases) and so on have related game investments.
02 Is it actually a false fire?
The heat of investment in the game track lies in the huge imagination space given to capital by the "home economy" after the epidemic. On the other hand, the "metaverse" is recognized in the field of games and is infinitely expanded to the "metaverse of everything".
In March 2021, Roblox, the "first stock of the meta-universe", was listed on the New York Stock Exchange, with a market value of $77 billion, surpassing traditional game manufacturers such as Nintendo and Activision Blizzard, which is undoubtedly a shot in the arm for investors in the primary market.
Formally, Roblox is an interactive platform that integrates game creation and a large community, and its biggest difference is that it is not engaged in the business of making games, but provides tools and platforms for developers to freely create immersive 3D games, with the prototype of a "metaverse game".
Under such a trend, a game investor once described it this way: "Everyone is investing in the metacosm, all projects belong to the metacosm, and the boundaries of the metacosm are infinitely enlarged, or the boundaries of the game are infinitely enlarged." By the second half of 2021, many early-stage investment institutions have included the "metacosm" into the investment category.
In the secondary market, since October 2021, the "meta-universe concept stocks" sector has risen by as much as 60%. Tencent, NetEase and other game manufacturers have also laid out the "meta-universe" related game business.
But the "metaverse" game has not seen more results at present. Roblox has not yet achieved a profit; there are "meta-universe" game concept stocks that have also been questioned by the market.
On January 6, the Shenzhen Securities Regulatory Bureau pointed out that there were irregularities in the operation of the three associations, the management of insider information, and the management of related parties, and took regulatory measures against it to order corrections. By the close of trading on January 7, Zhongqingbao's stock price had fallen from the previous high of 42.6 yuan to 32.49 yuan.
Roblox's market capitalization also continued to decline after the end of November 2021, and by the close of the US stock market on January 7, its market value had dropped to $48.842 billion.
From the perspective of the mobile game market, the more important reason for stimulating the crazy investment of game manufacturers may be the sudden rise of "Original God".
In the era of mobile games, Tencent and NetEase have firmly ranked first and second in the industry. In terms of revenue scale in 2020, Tencent's game revenue accounted for more than 50% of the total revenue of China's game industry that year, and NetEase was 20%. Tens of thousands of game companies account for only 30% of the remaining market share, and the market growth space is not large.
In the game category, small and medium-sized game companies have long been unable to compete with Tencent in the MOBA and FPS vertical categories, and the traditional Xianxia MMORPG has also occupied a pit position such as NetEase and Perfect World.
Before Mihayou launched "Original God" in September 2020, Mihayou was not prominent in the industry, and the main game IP was the RPG game of the "Crash" series and the "Undetermined Event Book" love cultivation game. After a few years of "silence", Miha You brought the "open world" genre that is not uncommon in terminal games, console games, and AAA games into mobile games, and successfully launched "Original God", creating a new mobile game genre.
According to the data released by the US market research company Sensor Tower, from the end of January 2021 to December 14, 2021, "Original God" occupied the third place in the global mobile game sales list with sales of 1.8 billion US dollars, second only to "PUBG M" and "Glory of kings" that have been operating for many years.
Released by the end of 2021, Original God has generated more than $2.4 billion in revenue across dual platforms worldwide. And Mihayou also relied on the explosion of "Original God" to become the most favorable competitor in the industry under Tencent and NetEase.
The success of "Original God" once gave capital and small and medium-sized game teams the confidence to "overtake in curves" to win over the big factories. The big factories are also awakening and catching up.
But after a year of crazy investment, there is not a strong competitor to "Original God" in the market.
Moreover, from the perspective of the new mobile game market in 2021, the flow of new mobile games has also poured cold water on the industry.
According to gamma data, the proportion of new mobile games launched in 2021 in the top 100 is less than in 2019 and 2020. In line with the decline in the proportion of new tours, the number of new games on the list is also decreasing, with only 18 new games on the list in 2021, compared with 25 in 2020.
This also means that the market concentration of the mobile game market is getting higher and higher. Veteran mobile games occupy an absolute share, while novice mobile games have not stepped out of the new model, and the results are not satisfactory.
03Where is the way out?
From the perspective of the general environment, the game market is not optimistic.
In 2021, the actual sales revenue of China's game market was 296.513 billion yuan, an increase of 6.4% year-on-year, and the growth rate was reduced by nearly 15% year-on-year (compared with 20.71% in the previous year). In addition, the scale of game users was 666 million, an increase of 0.22% year-on-year, and the demographic dividend was becoming increasingly saturated.
Not only that, in 2021, a series of industry regulatory policies have also been implemented.
At the end of August 2021, the State Press and Publication Administration issued the Notice on Further Strict Management and Effectively Preventing Minors from Addicting to Online Games, requiring all online game enterprises to provide 1 hour of service to minors from 20:00 to 21:00 every day on Fridays, Saturdays, Sundays and statutory holidays; strictly implement the requirements for real-name registration and login of online game user accounts, and must not provide game services in any form to users who have not registered and logged in with real names.
In addition, since August 2021, the release of game version numbers has been suspended, according to GameLook statistics, the number of new game versions released in the whole year is 755, a decrease of 46.26% over 2020.
According to game media reports, since the end of July 2021, the underground transaction price of the game version has been rising, up to tens of millions.
These factors have exacerbated the survival difficulty of small and medium-sized game enterprises, according to the information of Tianyancha, since the suspension of the version number, 14,000 game-related companies in China have been cancelled, and under the epidemic in 2020, the number of cancellations in the whole year is 18,000.
Where is the way out for SMEs? Zhang Yi, CEO and chief analyst of Ai Media Consulting, said: "When the release of game versions was suspended in 2018, some companies realized the importance of 'going to sea', the pace of domestic games 'going to sea' was accelerating, and some companies' business focus was even overseas. ”
Not only the reason for the restriction of the version number, in China, the trend of "boutique" of mobile games has intensified the "quality volume" of the game industry in terms of content, art and technology, and most game companies are difficult to bear the cost of "inner volume". And the distribution channel is still occupied by Tencent, NetEase, B station, etc., and "going to sea" has become one of the few choices for small and medium-sized manufacturers.
In contrast, although the big factories have the advantages of technology, talents, resources, channels and other aspects, they have not made more breakthroughs in innovation. Judging from the global mobile game sales data released by Sensor Tower, the top 10 games, in addition to "Original God", are all veteran mobile games that have been online for a long time, such as "Glory of Kings", "PUBG M", "Roblox", "Pokémon" and so on.
Each mature mobile game has already accumulated a group of loyal users, with stable flow and continuous sales, which may also make the game manufacturers easy to fall into "inertia" thinking.
The hottest mobile game launched by Tencent in 2021 is the "League of Legends Mobile Game", but its gameplay continues the form of LOL terminal games, and it is also Tencent's "Glory of kings" that competes head-on with it, which cannot be regarded as innovation.
In recent years, Tencent's "anxiety" has mostly come from outside its own system - whether it is a popular game such as "Awakening of Nations", "Ark of Tomorrow" or "Original God", its game development companies do not belong to the Tencent camp system. The reason why Tencent has changed its investment style to "cast a wide net" is actually to deal with external innovation competition.
In 2021, Tencent has especially increased its investment in secondary, AAA console games, and boutique games. According to incomplete statistics from Gamma data, between 2020 and 2021, Tencent invested in more than 20 game research and development companies related to the "second dimension".
Some industry insiders commented on this: "Tencent can only expand the coverage of investment, hoping that if the next "Original God" appears, at least it will not have nothing to do with Tencent." ”
The way B station solves the "green and yellow" of its own game products is to intensively release new games. At the 2021 game new product conference, Station B released 16 new games at one time, including 6 self-developed games.
According to the dot data, among them, "Kangong Riding Crown Sword" is estimated to have a total download of 12 million on Android and iOS systems, which has received good market feedback. But the rest of the feedback was mediocre, with the once-promising Twin Horizons having only 1.14 million downloads.
Source: Zinc Scale
Whether it is Tencent, NetEase and a veteran game manufacturer, or an ambitious byte of the game market, B station investment rookies, still can only hope to develop or invest in the next "blockbuster" game.
When the waves brought by "Original God" are gradually smoothed out by the market, it is not enough to rely only on the "virtual fire" of the "meta-universe" to heat the game industry.