Image source @ Visual China
Text | Gamewower
Recently, Sensor Tower released its 2022 Q1 Global Mobile Applications Market Report. According to the report, the Q1 global mobile game market revenue is about $21 billion, down 7% year-on-year. This is obviously not good news for domestic manufacturers whose version numbers have not yet recovered and are extremely dependent on overseas revenue growth to drive enterprises forward.
In addition to a small part of the impact of the fading of the epidemic dividend, but more critically, the contradiction between the consumption of the demographic dividend, the consumption capacity of emerging markets and the increasing marketing expenses, the Sensor Tower report shows that in the case of declining revenue, the advertising expenditure of the Q1 global mobile game market increased by 41% year-on-year.
It seems that the growth of overseas income is good but the profit is extremely low, or the profit growth is gratifying behind the product maturity and even the decline period to reduce the publicity investment caused by the results, while facing the traditional large factory stage large IP to support the batch output of mobile games, continue to increase efforts to earn lucky money or find another way, the global mobile game market in 2022, the general environment has an inflection point in 2022, the global mobile game market is facing a new test and transformation.
Incremental or stock?
As a catalyst, the epidemic has helped the global game market to achieve a rapid transformation of user increments, and it is understandable that the industry has declined. But the key factor facing the deeper demographic dividend is that the ability to pay can change with the economic ability of countries and individuals (such as the gap between the typical emerging market and mature markets), but there is a limit to the amount of game time that a single user can dispose of.
Therefore, in the epidemic environment, non-game users are rapidly converted into game users to enter the stock market, and game manufacturers are actually competing for the allocation of user game time, although they have developed certain game habits, with the recovery of work and life, the available time in this regard will inevitably decrease, and the upper limit of the impact will intensify competition (and even compete with other entertainment behaviors).
From this point of view, there is also a competitive relationship between different subdivision tracks and different gameplay game products. At the same time, we can also see some interesting phenomena in the development of the game industry, such as the decline of products that occupy a lot of game time (such as MMORPGs), the rise of designs that occupy a small amount of time can rely on business models such as card draws to ensure revenue (such as placing hang-up games and other secondary games), and categories that can flexibly control game time (such as competitive, casual, and even enduring stand-alone).
It is worth noting that the blind pursuit of the concept of users spending less time and spending more money in game design is too one-sided, and the player's emotional identification with the game and the enjoyment of the game itself are based on the investment of time, which is actually the same as the emotional construction between people.
Staying away will be strange, every day high intensity and creamy will also have problems, to play an inappropriate analogy, these elastic and controllable game time types are a bit like the ideal partner who comes and goes, surreal to meet psychological needs. In fact, this type further drives the trend of the eighty-two effect and winner-take-all in various markets around the world.
Back to the issue of increment or stock market, domestic manufacturers currently have two main directions for generating revenue: the struggle of mature markets and the large-scale development of emerging markets, but Southeast Asia, South America and other markets have been more sticky, flexible time categories (such as the well-known "Free fire" and "Endless Showdown") baptism gradually towards the stock, this accelerated change of direction to increase the pressure of many categories of "delivery - recycling - re-investment" play.
The choice under acceleration
The past is not forgotten, the teacher of the future. The ideas and ideas of the end game are regarded as wealth, accelerating the development of domestic mobile games. For emerging markets that sit on the demographic dividend, we also hope to use our existing experience and ideas to replicate the development process and thus benefit.
It's one thing to get out, it's another to get enough rewards. On the one hand, the rapid prosperity of the domestic game market is inseparable from the rapid development of the overall economy, on the other hand, the new users in emerging markets have directly accepted the baptism of flexible time categories, and how much of the squeeze is left for other types of living space and development ceiling.
Today, manufacturers have faced a more fierce competitive environment, either to join in and make hard money, or to find a better way to control costs.
There are three obvious phenomena in the financial reports of domestic game listed companies in 2021: overseas growth rate is higher than the overall growth rate; revenue growth seems to be good but profit is low; profit is higher but revenue declines, and the statement is often "XX products enter maturity during the reporting period or reduce promotion costs at the end of the period".
Sensor Tower pointed out in the report that in the case of a decline in revenue, the advertising expenditure of the Q1 global mobile game market increased by 41% year-on-year, and in the era of collective going to sea, the real money was made by advertising platforms, such as unity Ads mentioned in previous reports.
On the overseas-related sharing forums, there are often advertising marketing analysis companies, Meta Google and other delivery platforms, including cross-border payments, involving distribution teams, and the content shared is also focused on the topic of delivery methods and localization.
The game value theory in "Overseas Distribution Rises Again" mentions that compared with the domestic market competition, the complexity of market research information caused by the number of regions has increased exponentially, which also means that the cost of time and energy for game companies to learn and grow themselves to obtain the cognition of the target market is higher.
Under the inevitable trend of going to sea, the actual needs of small and medium-sized teams and the exponential information gap in overseas markets have further enhanced the necessity of overseas issuance business, and even more leading enterprises will consider developing this part of the business to cooperate to cope with competition. Behind this also includes the strategic transformation of demand in response to soaring costs, and the exploration of more reasonable ways to control investment.
Of course, we can't ignore the impact of the domestic version suspension, whether it is as a control of the largest market revenue growth or a further suspension of the already slow iteration of product forms. If it is not new, it is impossible to talk about the possibility of innovation, and the overseas products are more for stable design, localization modification, and even NFTs that are completely from the perspective of income generation can become the focus of attention, and worse, they can also sever their teams and reduce R&D investment. Whether it is a domestic or global market, the stage bottleneck of product form may be the more critical factor leading to the inflection point of development.