Image source @ Visual China
Text | Humble
In 2021, there have been many major events in the game industry, such as the introduction of the "strictest in history" juvenile anti-addiction policy, the increasingly strict approval of games, the failure to open game version numbers for 5 consecutive months, and the sharp decline in the number of audited games.
According to the "2021 China Game Market Investment and Financing Survey Report" recently released by Gamma Data, last year, the game market showed the characteristics of significantly strengthening investment activity, of which investment from leading companies such as Tencent accounted for most of the total investment amount.
In 2021, Tencent's investment amount was 20.62 billion yuan, accounting for 79.7% of the total investment amount in the market. However, it is worth noting that the investment events counted by Gamma data do not include investment cases with undisclosed amounts, and ByteDance's investment expenditure last year is also eye-catching, and it is reported that the total amount of its investment has exceeded 10 billion yuan.
While the investment amount is growing, the investment direction also shows the characteristics of a small concentration in the secondary market, and at the stage where the scale of the pan-quadratic audience continues to expand and the industry breaks out, the secondary has become a major category that cannot be ignored in the game industry. Will this change as we enter the new year?
The game market has been renewed, and it has been developed into a "rich code" for small and medium-sized enterprises.
After several "big waves and sands", the game industry has basically formed a fixed pattern, and it is difficult to have major changes. In terms of revenue caliber, Tencent occupies 56% of the market share, NetEase occupies 19.6% of the market share, 37 Interactive Entertainment accounts for 5.2%, and the remaining 19.2% is divided by hundreds of game companies.
In general, China's game industry concentration is relatively high, the market shows a significant imbalance, and a large number of resources are in the hands of a small number of leading enterprises. However, since 2020, the games of some small and medium-sized game manufacturers have exploded in the market, squeezing the share of head companies to a certain extent, resulting in a 6.43% decrease in the market concentration of the game industry in 2020 compared with 2019.
This change has given small and medium-sized game manufacturers hope, which has stimulated the enthusiasm for research and development. And these small and medium-sized enterprises are divided into two different genres, one school insists on independent research and development, such as Mihayou and Lilith; the other school hopes to rely on resources from "above" and use the power of head enterprises to make their way smoother.
However, in the fierce market competition, how to successfully attract the attention of head enterprises has become a major problem, and research and development is the fastest shortcut. The data shows that in 2021, the number of enterprises engaged in game research and development will account for 80.38% of the financing, and self-research will become the "rich code" for small enterprises to receive the resources of the head enterprise.
For head companies such as Tencent, in the case of most of the resources, investment is mainly "defense".
The significance of "defense" is to grasp the initiative in the subdivision field, thereby blocking the possibility of small and medium-sized game companies "breaking through" from niche fields with featured games.
According to statistics, in the first half of 2021, Tencent invested in 49 game companies, an average of about one every 3.8 days. This is probably due to the long-lost sense of urgency felt by Tencent after Mihayou hit the game market with "Original God".
To put it simply, the influence of self-developed games for the head enterprises is limited after all, in the segment of the field to seize the potential of start-ups, in the form of capital injection in exchange for a certain degree of control, on the one hand, it is conducive to the head of the enterprises to increase their influence in the game market, on the other hand, it can also prevent startups from growing into new giants through deep ploughing market segments.
In 2020, the marketing of two-dimensional games has increased, the user growth has been rapid, and the rapid growth of two-dimensional games has become the most potential segment. Therefore, in last year's investment strategy, Tencent, Station B, ByteDance and other head companies invariably chose to shift to the two-dimensional track. Entering the second half of the year, the meta-universe outlet has risen again, so will this year's investment focus be meta-universe-related?
Game companies have joined the battle for the outlet, and they can sit back and relax by seizing the outlet?
According to the "2021 Mobile App Buying White Paper", the mobile game buying market grew by about 14.5% in 2021, but the overall growth rate fell by nearly 30%. With the continuous innovation of boutique mobile games, consumers' requirements for games are getting higher and higher, and the income brought by buying is declining.
The effect of buying volume is reduced, in fact, consumers are awakened to their own consciousness, and the younger generation, as the main force of game consumption, is more willing to follow their own preferences in game choices. But "what do young people really like" is too complicated a proposition, and game companies have chosen a simpler solution, that is, to seize the outlet.
This can explain why in the process of investment and financing, the second dimension is so favored by the head enterprises. The data shows that from January to June 2021, the actual sales revenue of the two-dimensional mobile game market reached 15.81 billion yuan, with a growth rate of 50.15%.
The biggest outlet in the second half of this year is undoubtedly the metacosm. According to the statistics of "Game New Knowledge", a total of 33 game companies have participated in the construction of the meta-universe this year either by registering trademarks or by initiating the development of related technologies, but most of them have not yet made progress.
However, this does not prevent companies from scrambling into the field. Even if the metacosm is ridiculed as "talking on paper", with the development of science and technology, the industry leaders have reached a "consensus", that is, the integration of the real world and the virtual world is an important development direction in the future.
From this point of view, it is not unreasonable to preempt the metacosm in advance. However, trademark registration is only the simplest and least technical step in the meta-universe business, and how the market will develop next, enterprises still need to invest a lot of time and energy in analysis.
According to the investment strategy of the previous head enterprises, in the past two years, investors have more participated in the financing of game-related enterprises through strategic investment, and the shareholding ratio is mostly below 30%. In other words, it is "only paying, not contributing".
The author believes that this investment model will continue to exist for a long time and continue to expand the business of meta-universe. Compared with going it alone, it is the practice of the head enterprise to develop independently without letting go of any other possibilities.
For the head enterprise, under the strategic investment, the cost of holding less than 30% of the shareholding ratio is not high, even if the loss will not shake the fundamentals of the enterprise, the greater significance is to be able to optimize its own business structure. Once any invested product successfully runs out of the track, the head enterprise can have a certain right to speak, it can be said that this is a typical "wide net, pan fishing" policy.
However, in the case of the overall tightening of the policy of the game industry, seizing the wind outlet can only stabilize the giant ship of enterprises, and if you want to continue to sail forward, you need more motivation.
In the future, high-quality games in the market will become the mainstream, and Chinese games will take a bigger stage
In fact, in 2018, the game industry also experienced a storm of version number suspension, which mainly rectified the chaos of bad currencies in the market and provided a guarantee for the overall healthy development of the industry. The suspension of the version number in 2021 is different from that in 2018, along with the suspension of the version number and the strong supervision of the protection of minors, these two signals together send a signal to the outside world: the era of game quality has truly arrived.
The impact of the "strictest juvenile anti-addiction system in history" is mainly reflected in two aspects: First, minors in the market gradually withdraw, game companies can only absorb gold from adults, and adults are more rational than young people in consumption, which requires game companies to launch more high-quality gameplay to attract players Krypton gold.
Second, compared with minors, adults' minds are more mature, which in turn will push game manufacturers to create more "high-energy" gameplay and further promote the quality of games.
But what kind of game can be called a "boutique"?
The author believes that in addition to a lot of investment in research and development, the "hardware" such as screen effects and fluency can be played, and it is also necessary to consider whether there is a big IP and whether it is integrated with mainstream game platforms.
For example, some time ago, the mobile game "Harry Potter Magic Awakening" launched by NetEase adopted the global big IP of "Harry Potter", which attracted the attention of many fans at the beginning of the launch, and reached a turnover of 2.3 billion yuan in 20 days after the official launch.
With the further development of technology and the gradual maturity of the metaverse, VR, AR and other devices are likely to become mainstream game platforms in the future. Therefore, in the future, whether the enterprise has the core technology in the relevant field is likely to become a decisive factor in the competition for high-quality products. From another point of view, companies that have been working in VR and other fields for many years may have a large first-mover advantage.
Then, for companies with weaker technical strength, especially the majority of small and medium-sized game start-ups, it has become more difficult to survive this innovation, but it is not without a solution.
According to the data of the Prospect Institute, in 2020, the sales revenue of China's self-developed games in overseas markets maintained a steady increase, and the actual sales revenue reached 15.450 billion US dollars, an increase of 3.855 billion US dollars over 2019, an increase of 33.25% year-on-year. Going to sea has become the consensus of the entire industry.
Especially in the context of the suspension of version numbers and the tightening of policies, going to sea may be the best choice for small and medium-sized enterprises to "breathe a sigh of relief". Of course, the fiercely competitive overseas market also has a certain polishing effect on the game of going to sea, which can make the game products show a more refined state when they actually mature and "return to China".
Overall, with the current market development, the possibility of changes in the game industry pattern is small, but the overall atmosphere of the game industry will change dramatically, and high-quality games will become the mainstream in the future market. At the same time, the proportion of overseas games will continue to increase, and Chinese games will begin to perform and fight in the global market.
Resources:
【1】Oriental Fortune Network: Insight into 2021: Competition Pattern and Market Share of China's Game Industry (with market concentration, enterprise competitiveness evaluation, etc.;
[2] Game New Knowledge: Ten years of investment in 150 game companies, Tencent game investment of the three major strategies.