Wen | perseverance
Source| Bowang Finance
The view is widespread in the industry that for game companies, version numbers are the lifeblood.
What is the game version number refers to the approval document of the State Administration of Press, Publication, Radio, Film and Television to agree to the online operation of relevant game publications, and the full name is "Approval of Online Game Electronic Publications".
After 263 days of "food cut-off", the game industry ushered in the dawn again, and also gave a short-term continuation of the game company.
On the evening of April 11, the official website of the State Press and Publication Administration announced the approval list of domestic online games in April 2022, and a total of 45 games received version numbers, including 39 mobile games, 5 client games and 1 Switch game console product. From the perspective of game types, it is mainly based on casual categories; from the perspective of approved game companies, most of them are domestic second-tier game companies and small and medium-sized game manufacturers.
Source: Official website of the State Press and Publication Administration.
It is worth noting that this is the first batch of game versions released on the official website of the State Press and Publication Administration after the discontinuation of the version number in July 2021, compared with the 87 games reviewed in July 2021, only 45 games have been reviewed this time, and the number is cut. As the industry has speculated, the review criteria will be more stringent after the game version number is restarted.
You know, since 2019, the number of games that have been reviewed has shrunk sharply year by year, from 1570 to 755 in 2021, and it is expected to be less in 2022.
For the suspension of the version number, the explanation given by the regulatory level is that because in the domestic mobile game outbreak stage (2016-2017), there have been a large number of crude and random skinning products, which seriously disrupt the normal order of the game market, so it is hoped that the number of products will be actively controlled through the suspension of the version number, abandon the idea of quick success and short-term profit, and strive to achieve the purpose of calming down and doing a good job.
One can't help but ask, is it the norm to shrink the number of game versions in the future? How to effectively improve the pass rate of the game version number? Where will game companies go in the future? Today, I will discuss these issues with you.
01
The game industry is picking up, but game companies are still cold
After 8 months, the game industry finally waited for the release date of the version number, which is undoubtedly a good news.
In this regard, a number of securities companies expressed optimism about the development of the industry. CITIC Securities said in the research report that "with the re-issuance of the version number, the overall prosperity of the game industry is expected to pick up"; the UBS Securities Research Report believes that "the issuance of the version number is a major relief for investors and companies, and other companies that have not obtained the version number are also additional beneficiaries"; Galaxy Securities pointed out that "since the release of the version number, the valuation of the game sector has continued to decline and is currently at a historical low." We believe that with the resumption of version approval, the valuation of the game sector and the performance of game companies will be repaired."
However, the author noted that the recovery of the industry has not yet been transmitted to the company level.
It is worth mentioning that in the april 2022 domestic online game approval list, there are no two major game giants Tencent Holdings (0700. HK) and NetEase (NTES.O) owned games. However, Tencent Holdings and NetEase were deeply "favored" by the State Press and Publication Administration. From 2019 to 2021, Tencent Holdings obtained 32, 16 and 9 version numbers respectively, while NetEase obtained 31, 20 and 11 version numbers respectively in the same period. Of course, from the number of version numbers obtained by the head companies in the game industry, it can be clearly seen that the game version number review standards are becoming stricter.
Source: Everbright Securities Research Report.
It is precisely because of the importance of the game version number that after the reissuance, it will instantly detonate the capital market, and the most intuitive impact is first reflected in the company's stock price.
Due to the announcement in the evening, the US stock market that opened that night was first affected, and the stock price first rose in response, but then returned to the downward trend. Among them, the head companies such as NetEase, Bilibili (BILI.O), Douyu (DOYU.O) and Huya (HUYA.N) rose 2.12%, 7.23%, 2.42% and 2.59% respectively at the close of the day, and the market value rose by 6.8 billion US dollars, 727 million US dollars, 0.02 billion US dollars and 0.28 billion US dollars respectively in just 1 day, but fell 2.92%, 9.54%, 3.3% and 1.89% respectively the next day.
Source: Futu Cattle.
Immediately after, A shares and Hong Kong stocks opened on the 12th, and the stock price rose at the opening, but the closing price fell back. among them gigabits (603444. SH), Heartbeat Company (2400. HK), Le tease games (DSKY.O), Kaiying Network (002517. SZ) and Zhongqingbao (300052.SZ) rose sharply by 8.27%, 24.05%, 6.97%, 4.95% and 4.75% respectively at the opening. However, it is worth noting that the shares of the above companies have not continued to rise since then, and have retreated on the day, closing with only 2.57%, 0.42%, 2.40%, 6.97% and 4.99% respectively. But Tencent Holdings, which performed differently from the companies, rose 2.88% at the opening and further rose to 3.62% at the close.
However, what is surprising is that as the third oldest in the game industry (second only to Tencent Holdings and NetEase), and also for the highest value of the A stock market today, 37 Interactive Entertainment (002555.SZ), in the case of its game "Dream Voyage", it is still not "welcomed" by capital, and the market value "evaporated" 4.2 billion yuan in just two days.
On April 12, 37 Interactive Entertainment rose 8% at the opening, but then quickly "turned its face" to green, falling 7.32% at the close of the next day, and the market value was locked at 48.6 billion yuan.
Source: Futu Cattle.
There is no doubt that the company's stock price reflects the sentiment and confidence of the market in a certain way. Looking at the entire capital market, the reissuance of game numbers has a strong and peaceful effect on the stimulation effect of different stock markets. Specifically: the performance of the US stock market is more "positive", the increase is obvious, and the closing of the day has risen; hong Kong stocks are close behind, with average performance, but the closing price is higher than before the release of the version number; while the performance of A shares is extremely "negative", and the short-term rise is quickly "turning face", and the stock prices of some companies are even lower than before the release of the version number.
The author believes that although the restart of the game version has a "positive" repair effect on the market sentiment, from the perspective of the main regulatory policies from 2018 to 2021, the future is more reflected in the stricter review, which will inevitably lead to a continuous reduction in the number of game versions.
02
"Game + metaverse" has become an indispensable topic in the future
In early 2022, Zhang Jianchun, deputy director of the Central Propaganda Department, mentioned in his speech at the National Publishing (Copyright) Work Conference (originally published in China Publishing, No. 3, 2022) that "the suspension of the distribution of version numbers will cause a temporary stagnation of new games in China, but the existing huge game inventory and games with long life cycles will not be affected, and the market pattern will not change much." At the same time, domestic game manufacturers will sink their hearts to tap the potential of high-quality games and have more investment in the game at sea, but it will have a catalytic effect on the growth of domestic games, and have a certain elimination effect on some domestic skinned, low-quality games and manufacturers." In other words, the short-term release of the version number, the game industry will indeed experience "pain" in the short term, but in the long run, it will "force" game manufacturers to improve their comprehensive strength, give full play to the potential of tapping high-quality games, and then improve the quality of the entire industry.
Today's game industry is facing multiple pressures such as policy tightening, version number suspension and media criticism, manufacturers are miserable, how to effectively improve the game version pass rate has become a compulsory course.
Since Facebook announced its renaming as Meta Platforms and entering the metaverse, it has directly triggered a rise and fall in the metaverse, as long as it is dipped in the concept of metacosmology, it has brought the company a series of considerable benefits such as a sharp rise in social attention, a soaring market value and a doubling of the amount of financing.
In this context, various fields are competing for layout on the metaverseal track. According to Tianyan, in 2021, there have been more than 12,000 trademark applications in China with "meta-universes" in their names, and the international classification involves advertising sales, scientific instruments, website services, education and entertainment, etc. The "meta-universe" is like a "fragrant food" that instantly detonates the entire market, and all fields are eager to move, including the game industry.
The author believes that by combining games with cutting-edge technologies such as metaversics, it is possible to create the effect of "1+1>2", which contains huge business opportunities in the process of "two-way rushing".
As new technologies and concepts such as AI, cloud computing, VR, and metaversity become high-frequency words, more and more game merchants are currently integrating these elements into the game, and in the process of realizing the update and iteration of the game experience, it is also praised continuously. For example, Tencent Holdings, known as the "closest game company to the meta-universe" in China, invested in the "first share of the meta-universe" Roblox as early as 2020 to cut into the meta-universe field; in addition, NetEase has also made a practical attempt to land in the meta-universe, through the newly developed immersive activity system "Yaotai" under NetEase Fuxi, in the form of meta-universe interaction for synchronous live broadcasting.
In the future, if game manufacturers want to effectively improve the pass rate of game versions, they must enhance market competitiveness, which is inseparable from the investment of more resources in the field of technological innovation.
03
"Domestic + overseas" two-legged walking has become the consensus of the industry
Since the second half of 2021, in the face of the problem of peaking domestic traffic dividends and tightening the issuance of game version numbers, "going to sea" has resolutely become the consensus of game manufacturers.
In fact, the market performance of the domestic game industry continues to be sluggish, and it has entered the "red ocean" from the "blue ocean". According to the data of the "2021 China Game Industry Report", the actual sales revenue of China's game market in 2020 increased by 20.71% year-on-year to 278.687 billion yuan, while the sales revenue in 2021 only increased by 6.40% year-on-year to 296.513 billion yuan, an increase of nearly 15 percentage points compared with 2020. In addition, due to the promotion of a number of new policies such as the protection of minors and the promotion of anti-addiction work, the growth of the game population has also tended to stagnate, and the number of new game population in 2021 will only increase by 0.22% year-on-year to 1.45 million.
With the success of domestic blockbuster games such as "QQ Speeding Car Mobile Game", "Glory of the King", and "Original God" in overseas markets, in the context of the slowdown in the domestic market today, domestic game manufacturers have joined the queue of "going to sea", and some head companies have taken the layout of overseas markets as the key direction. According to the data of the Sensor Tower store intelligence platform, in March 2022, 38 Chinese game companies entered the top 100 game publishers in terms of global revenue, with a total of more than 2.22 billion US dollars, accounting for more than 40% of the total revenue of the company in the world's top 100 list.
Tencent Holdings upgraded Arena of Valor (overseas version of "Glory of Kings") to an important strategic project, doubled its investment budget, and plans to achieve the goal of "50% of the total revenue of the game in overseas markets". In addition, NetEase CEO Ding Lei issued a "convocation order" to plan to collect global game talents and accelerate the development of overseas markets.
Indeed, game stocks are fading "bubble" step by step, long-term strength is the true portrayal of the stock price, in the future, equipped with the concept of meta-universe game manufacturers rely on this "domestic + foreign" two legs to walk, must go farther and farther, more and more stable.