Image source @ Visual China
Text | Game Pizza, author | Chen Shoucheng, Editor | Zhang Youfa
In the fifth year after internet access to China (1999), Chen Tianqiao, who aspired to build an "Internet Disney", resigned from the high-paying job of the director of the Jinxin Trust Office and established Shanda Network with a $3 million financing from China.com. But in less than two years, he had only $300,000 left. But with this 300,000 US dollars, Chen Tianqiao went to South Korea to win the agency right of "Legend", achieving the first generation of Internet games "legend".
Chen Tianqiao's "Legend" without heart made him the first player to open up Internet channels. In the era of barbaric growth, the Internet is a revolutionary force to promote the growth of the game industry, and channels are the magic weapon for Chinese game companies.
The story of Chen Tianqiao also has a metaphor. Game companies that enjoy the internet dividend, the game is more of a fulcrum of revenue increase, rather than the initial starting point. Under such logic, from Shanda, NetEase, Giant to Tencent, the position of the boss of Chinese game companies has alternated several times.
Today, the Matthew effect of the game industry has become more obvious, and it has been several years since the formation of a situation of "one stone in the world's games, Tencent's exclusive five buckets, NetEase's two buckets, and the world's game companies divided into three buckets".
According to the financial report data of major game companies, Lingxi Interactive Entertainment and Mihayou, which can barely be called the third place, are also visible to the naked eye in terms of revenue and Tencent NetEase.
However, the head companies have the largest resources and a huge player market in the industry, and the biggest innovation is the precision kryptonite design. The giants are moderately conservative in content innovation, and finally missed the biggest hit in the past two years - "Original God".
In addition to the content explosion, there are many more new variables in the game industry. From exciting domestic homemade AAA games, cloud games that rely on Internet changes, to meta-universes that are still relatively mysterious in concept. Each new form can bring no small changes to China's game industry.
In the view of Zhu Xiaonan, an Internet analyst at Zhongtai Securities Media, in the era of content scarcity, channels are more important, and players without choice can only accept the products given by the channels without the right to choose. When the competition in the market becomes increasingly competitive after the product saturation or even overflow, players begin to have the ability to appreciate and choose. The right to speak has gradually shifted from the channel distributor to the content producer.
The change of position in the game industry in the past two decades has come from this logic. In the future, which is visible to the naked eye, both channels and content will change even more.
The birth of the next giant may be in it.
"Legends" alternate, channels are king
Compared with the traditional stand-alone or LAN games "Red Alert" and "CS", "Legend" has a sociable and extremely low play threshold, making it the first generation of online games that have swept China.
In Chen Tianqiao's eyes, "Legend" is just a "bad game". But "for people who didn't even know what the Internet was at the time, it was Legends that taught them to go online and gave them their first knowledge of the Internet." One veteran player recalled. In a sense, the Internet gave birth to Legend, and Legend also promoted the promotion of the Internet.
From the current point of view, "Legend" is not excellent in any way, but in the era of extreme lack of entertainment methods, the birth of "Legend" is like a fire in the darkness, which illuminates the grand and opens the era of online games in China.
New players after Shanda, in the process of exploring the game industry, gradually found the wealth code, and the first position of Chinese game manufacturers has also changed hands in the process of channel replacement.
In 2001, as a portal with a large number of potential consumers, NetEase has been planning to enter the game. After the acquisition of "Tianxia" and the team behind it, NetEase finally got the technology and entered the industry. In the same year, NetEase released its first game "Journey to the West 1".
However, at that time, the popularity of "Legends" overwhelmed the volume of all other games, many players who entered "Legends" did not know what portal, and the game itself did not have any special points "Journey to the West 1" quickly fell silent.
Two years later, the "Fantasy Journey to the West" based on "Journey to the West 1" was released, and the style of the Q version, which seemed to be a delicate picture at the time, and a very friendly teaching and guidance system for players, made "Journey to the West" unique in the inferior online game environment at that time.
IP (although it wasn't said at the time) became another wealth password for game companies at the time. Many established game companies have earned the industry's first bucket of gold by adapting martial arts IP.
As a portal, NetEase also further ate the traffic dividend in the case of rapid expansion of netizens, in 2006, the number of Chinese netizens reached 137 million, an increase of more than 2 times compared with 2001, NetEase also achieved its online game at the same time the number of online people exceeded 2 million, surpassing Shanda in one fell swoop and becoming the first game company at that time.
However, Ding Lei and NetEase only stayed in this position for two months before being snatched away by Shi Yuzhu and his "Journey".
In 2004, Giant CEO Shi Yuzhu had already achieved great success in the health care products and software industries, and as a "Legend" player, he saw the huge profits behind the game industry, and also found that "Legend" as a point card game (paid by play time), failed to fully tap the consumption potential of gamers.
In the same year, after coming into contact with Shanda's other game "Age of Heroes" and learning that the cooperation between the game development team and Shanda was not pleasant, Shi Yuzhu was overjoyed, invested 20 million yuan to dig the studio to the giant, and created "Journey" on the basis of "Age of Heroes" - China's first "free game".
Shi Yuzhu, who started from the brain platinum, has a huge advantage in offline marketing, and when the Internet was not the standard in the early years, Shi Yuzhu promoted "Journey" to thousands of households in third- and fourth-tier cities in one fell swoop with his strong offline outlets and huge marketing investment. And with its innovation of the paid model, "Journey" made it the most profitable game at that time. Within one year, the monthly revenue exceeded 100 million yuan, and the net profit in the first half of 2007 reached more than 500 million yuan.
Shi Yuzhu's success has become a microcosm of Chinese games for the next decade: as long as the purchase volume is enough, kryptonite mechanics are abundant, almost any game is enough to make a splash in the Chinese market.
Behind the purchase volume is customer acquisition, and Tencent, with 100 million users, has become the one with the lowest cost of customer acquisition. Shi Yuzhu won the championship with ground push, but finally lost to Tencent, which has more Internet advantages.
In 2003, QQ, which had nearly 100 million users, and Tencent behind it, sat on the largest number of users on the whole network and enjoyed sweet distress - 100 million users are free users, except for limited revenue membership services, most people are not willing to pay for a social software.
Under the bleak future, Tencent even thought about selling itself at one point, and was rejected after continuous contact with companies such as Sina and Sohu. The success of NetEase has allowed Tencent to see the future. At that time, Tencent, which did not have its own game strength, chose the most cost-effective path - to represent foreign games with potential.
The extremely low customer acquisition cost and the most advantageous traffic entrance of the whole network allowed Tencent to successfully win the proxy rights of CF and DNF, and operated it into a game that was second only to "Legend" in revenue at that time. In contact with the American Fist Company, Tencent won the most influential game "League of Legends" in the next decade.
After 2008, Tencent gradually has five big Kongs, including CF, DNF, League of Legends, QQ Flying Car, and QQ Dance. Incomes are stabilizing and rising.
With the blessing of QQ and WeChat dual social overlords, Tencent's channels have become irreplaceable overlords in the past ten years, and thus have sat firmly in Jiangshan for more than ten years.
Channels to the left and content to the right
After 2014, the mainland game market began to make great strides into the era of mobile games, and all the main studios under Tencent were transformed into mobile games.
After winning the most market-promising MOBA and FPS mobile games with "Glory of the King" and "Peace Elite", Tencent has also successfully reached the top in the era of mobile games. According to its 2020 financial report data, Tencent's game revenue reached 156.1 billion yuan, and the total revenue of Chinese games in that year was only 278.7 billion yuan.
With the mobile game of the two old IPs of "Fantasy Journey to the West" and "Journey to the West", as well as the birth of new tour hits such as "Yin and Yang Division" and "Coast of the Land", NetEase has also sat firmly in the position of the second oldest in the market. According to its 2020 financial report data, NetEase Game revenue reached 54.6 billion yuan, occupying nearly 20% of the market share.
The advent of the mobile game era has also made many companies that have not kept pace quickly fall behind. Shanda needless to mention, once the "giant" of the Chinese game market, can only be regarded as a short man now. According to the financial report data of Giant Network, its revenue in 2020 was only 2.217 billion yuan, a decrease of 13.77% compared with 2019. In the introduction of its business sector, "Journey" and series of products are still an important source of income, and in addition to "Journey", only one product of "Ball Battle" remains, which shows its lack of follow-up strength.
Such as Jinshan, NetDragon, Lianzhong, etc., are even more missing under the impact of the new era, some of which are still profitable, and more have become a grain of dust in the great waves of the times, disappearing in the long river of history, and even no one is hanging.
The moribund veteran game manufacturers have not been able to get the crucial channels like Tencent, become a publishing company, and fail to master the core technology in self-developed games, and they have been blown up in the wind of the times, and the tide has fallen rapidly after falling.
Today, the old game companies that can still occupy a place in the game market, such as Sohu Changyou, Perfect World, 4399, etc., still live with one or two products or special ecology, but the innovation is weak, and the old people who eat the old life can no longer form a challenge to the giants.
But China's games haven't been quiet for a long time. Channels that have seemed very stable over the past decade have quietly changed. In the case of the increase in the content of game products, the players of Chinese games have become more and more demanding of content.
With Tencent almost monopolizing domestic channels and limited increments in the domestic market, many game companies have begun to go overseas.
According to the August 2021 SensorTower store mobile game developer ranking data, half of the top 30 mobile game developers, half of the game companies are mainly overseas, many game companies will write in the company introduction; "We are a global company."
In the process of going to sea, the distribution and operation strategy of game companies has gradually matured, and companies like Lilith, after mastering resources, can also go back to become a publishing company in China again, which is also a common form of domestic sales of overseas companies.
In China, the channel is also in flux.
Short videos have been the biggest variable in China's Internet over the past few years. Holding 700 million bytes of daily active users, it has also laid out the game industry for a long time. After the establishment of The Sunset Lightyear and the wholly-owned acquisition of Mu Hitomi Technology and Youai Interactive Entertainment, byte, which has its own channel advantages, has also obtained technology, and the next step is to wait for the emergence of a blockbuster.
In taptap's gaming community atmosphere, many excellent indie games are here. "Original God" gave up the domestic Android application market and chose TapTap, which was an outlet in the previous airtight convention.
In addition to Bilibili also getting the agency rights of "Original God", the cooperation with two-dimensional games such as "Ark of Tomorrow" is obviously very much in line with its community orientation.
In August, Heartbeat Network (TapTap Company) and Bilibili Games held a self-developed game conference, obviously, as a user base, they are not satisfied with only being an agency company, in today's content production company's voice gradually increasing, with the core self-research strength, is the basis for a game company to stand in the industry.
At the content level, new game companies have been unable to compete with Tencent in the MOBA and FPS vertical categories, and the traditional Xianxia MMORPG has also occupied the pit position of NetEase and Perfect World.
But the walls of Tencent's empire are not airtight.
In the SLG and two-dimensional fields, Ali and Miha You have made the vertical first, respectively, and the income on a single product has been approached to "Glory of Kings" and "Peace Elite".
In 2016, Ali, who claimed that "absolutely will not make games", established Ali Interactive Entertainment. Officially open the battlefield towards the game share fight.
In the case of the saturation of the existing game market, Ali is not eager to get involved in the most popular MOBA and FPS on the market, but has made the industry first in SLG, a seemingly small category.
In April 2021, according to SensorTower, the estimated total revenue of the Three Kingdoms Strategy Edition has exceeded $1 billion. According to Qimai data estimates, the current monthly turnover of "Three Kingdoms Strategy Edition" in domestic IOS stores is also 26 million US dollars, second only to Tencent's "Glory of the King", "Peace Elite" and NetEase's "Fantasy Journey to the West".
After the market segment occupied the first place, Ali subsequently released IP products such as "Sailing King Burning Will" and "Wild Drag Racing 9", which has a taste of benchmarking NetEase.
At present, Mihayou, which only does self-developed games, has in fact become the strongest contender for the third place of Chinese game companies with a cross-era significance of "Original God".
Compared with NetEase's use of IP to create games (in 2021 alone, NetEase's new game includes Marvel, Harry Potter, Lord of the Rings and other IPs), Tencent relies on the strategy of starting from channels, and Miha has taken the worst road. But perhaps, in today's gradual weakening of channel influence and the gradual importance of content, Miha is also taking the most correct path.
Without using the existing IP to attract the inherent audience (imitating the "plagiarism storm" caused by Zelda in the style of painting and even dissuading a large number of Ren players), and even without logging into the domestic Android app store in the early stage of release, "Original God" still killed a piece of the sky in the relatively stable situation of the domestic mobile game market.
As an ARPG mobile game, "Original God" absorbs the expertise of "The Legend of Zelda" on the design of large maps, for the first time in the mobile game to make an open world map, but also absorbs the traditional MMOROG on the copy of the gameplay, improve the user stickiness and increase the average use time, but also with continuous development, successively update the plot and new map mode, so that the retention rate of old players has been greatly improved.
Revenue is at the forefront, word of mouth is also high (TapTap 8.6 points), "standing and making money" began to happen to Chinese game manufacturers.
Where is the road? The road is at your feet
Whether it is the change of content or channels, it has not really changed the industry landscape, and greater variables will be greater in the future.
Cloud gaming, which has been conceptually born for many years, is now slightly more effective. In TapTap, players can already play high-profile mobile game masterpieces such as "Original God" in the cloud. Games that once required mobile phone configuration can now be loaded on more models through the outlet of cloud games, and this part of the demand will be further released.
What is even more full of reverie is that cloud gaming will change the business logic of previous games. In cloud games, device-specific types such as consoles, computers, and mobile phones will no longer exist, and AAA masterpieces can also be played on mobile phones.
On this basis, the basic problems of the console market that once plagued China's AAA game production may be solved once and for all. After all, the threshold for requiring a console to play console games no longer exists.
More importantly, as a nascent channel, cloud gaming has a huge advantage over the old channels, which is bound to make it the king of a new generation of channels.
Although it has not been effective, giants such as Ali, Huawei, Tencent, and Baidu have been laying out cloud services for a long time. But at present, cloud games are still more like the engineering on the drawings, and the birth of corresponding supporting technologies is urgently needed to help them land.
Since the beginning of this year, concepts such as metaverse NFT have continued to show a new imagination in the game industry. In the concept of the metaverse, sandbox games, VR games and even cloud games that have been unfinished are wrapped up in it, and the game world may be more complex and profoundly affect the world than we think.
An NFT concept game
Looking back at the twenty years of Chinese games, the overall output value has reached the first place in the world, but the top AAA game has never been born. When it comes to Chinese games, the public's impression is still stuck in low-quality online games.
As China's first game company, Tencent has even surpassed the veteran game manufacturers Sony and Nintendo in the game business, but compared with the reputation of "believe in Sony's eternal life" and "Ren Shizai", what is left for Tencent is only a slightly angry joke: "Create happiness with your heart, no money to play your XX."
It's time for change.
Not long ago, the second promotional video of "Black Myth Wukong" released by Game Science once again detonated the Internet, and it received 20 million views on the B station alone.
The high quality of the game's actual demonstration screen has made countless players cheer for it, and also let the market see the demand for AAA games in China.
"It's not that we don't need AAA, it's just that we've been stuck in CPS (Come, Play, Stay) mode for too long." Under such demand, head game manufacturers can not never do boutique games, one of the results that has been produced is that since this year, Tencent has set up a number of AAA studios overseas.
At the end of the "Black Myth Wukong" promotional film, a low and melodious male voice sings "Dare to ask where the way is" adapted from the 86th edition of "Journey to the West", and seems to be asking about the future of Chinese games.
Where is the road? The answer is also given in the lyrics.
The road is at your feet.