Author | Zhang Zhibai
Edit | Yang Peiwen
Design | Yan talks about Mengjie
On March 22, Tencent announced its financial report for the fourth quarter of 2022, in which the game sector, which is one of Tencent's hit gates, also handed over the latest report card:
Tencent Games' online game revenue in the fourth quarter was 41.8 billion yuan, down 2.3% year-on-year.
This is the fourth consecutive quarter that Tencent Games' revenue has declined year-on-year.
At the same time, the operation agency also found that not long ago, on March 8, Tencent Games' signature product "Honor of Kings" was quietly launched in Brazil.
As the world's first stable mobile game revenue, "Honor of Kings", which generated 15.2 billion yuan in 2022, actually began its overseas debut at this point in time, and its overseas operations were also riveted.
In the face of the declining game business, "Honor of Kings" began to go overseas, and there was a signal behind it: Tencent may be in a hurry.
So, how did Honor of Kings perform after its launch in Brazil? How does "Honor of Kings" expand overseas markets? Where will Tencent's gaming business develop in 2023?
Today's article, the operation agency will take you to talk about these topics.
01
"Honor of Kings" goes to sea, the first stop is Brazil
Many people have the impression that "Honor of Kings" seems to have been released overseas for a long time.
In fact, this is a kind of "misreading of information". Tencent has indeed taken out many products similar to "Honor of Kings" to test the waters overseas, such as "Arena of Valor" released overseas under the banner of "Honor of Kings International Version", and "League of Legends Mobile Game" with IP bonuses.
But the results of both games are very average: the overseas release of "Legend Showdown" is not smooth, the most downloaded version is only 300,000, and the revenue is only about 300,000 US dollars; "League of Legends Mobile Game" is also tepid overseas, ranking 50 on the App Store. (Source: Qimai Data)
Under this circumstance, the first overseas release of the genuine version of "Honor of Kings" has put a lot of pressure on Tencent.
But fortunately, for its own ace products to go overseas, Tencent is particularly careful - first use similar products to boldly try and make mistakes, analyze the market in different regions, which can be regarded as paving a relatively smooth road for the overseas distribution of "Honor of Kings".
From the data point of view, "Honor of Kings" topped the Brazilian free list on the first day of service, selling as high as the Top 12, and has 2 million people registered. Next, you only need to show the long-term operation experience that Tencent Games is good at, and it may become an overseas hit.
And "Honor of Kings" to go to sea, the first choice is Brazil also has certain considerations, the operation agency believes that there are mainly the following three reasons.
First, Brazil is a rising gaming market. Brazil's gaming market ranks 12th in the world, generating $1.84 billion in revenue in 2022, with mobile dominating the game and fitting well for the Honor of Kings ecosystem, which is the most profitable mobile game in Honor of Kings.
Secondly, the users are younger and the user base is large. Brazil's gaming population is dominated by more than 20% of 18-24 year olds, and nearly 45% in the mobile gaming market.
Finally, the esports profession brought about by games is very attractive to young people. MOBA games (Dota 2, LOL, Honor of Kings, Endless Showdown) are very attractive to young people in emerging countries like Brazil, with their many esports events, high prize money and good professionalism.
Source: Longbridge Dolphin Investment Research
Judging from the financial report, Tencent's choice of this time point to let "Glory of Kings" go to sea can be said to be inevitable.
After the "epidemic dividend" of the game industry receded, Tencent's game business has experienced a year-on-year decline in revenue for four consecutive quarters from Q1 2022 to Q4 2022.
According to the "2022 China Game Industry Report", the actual sales revenue of China's game market in 2022 will be 265.884 billion yuan, a year-on-year decrease of 10.33%. The number of game users was 664 million, down 0.33% year-on-year.
The decline in consumption and stagnant user growth have forced Tencent Games to leave its comfort zone in the Chinese market and seek a living overseas.
In terms of overseas game market, the growth of Tencent games is better than that of China. In three of the four quarters of last year, game growth was positive. The proportion of revenue from overseas games also reached 33.2%, nearly one-third of the entire game revenue.
Source: Longbridge Dolphin Investment Research
Ma Xiaoyi, senior vice president of Tencent, once said that "in the future, Tencent's game revenue should be half at home and abroad." It can be said that Tencent Games has high hopes for overseas.
CITIC Securities' research report also shows that the penetration rate of domestic mobile game players is 70%, which is close to the bottleneck. The penetration rate of mobile game players in the European and American markets is only about 40%-50%, and there is still a lot of room for growth, and it is estimated that by 2025, the revenue of China's mobile games going overseas can reach 32.898 billion yuan.
In this way, Tencent Games' choice to let "Honor of Kings" go to Brazil at this time is quite a good decision.
02
Do a good job of localization operation, how hard is "Honor of Kings"?
"Honor of Kings" topped the Brazilian free list on the first day of service, which can be regarded as a "good start". As its big IP debuting overseas, in order to start this battle, Tencent has shown its due "strength" and fought very hard. In terms of localization, "Honor of Kings" has made product modifications in order to take care of the different cultural habits of overseas users; In terms of traffic operation, "Honor of Kings" created enough momentum before it went online.
How exactly do you do that?
1) Content localization, heroic characters Internet celebrities break the circle
Perhaps over the years, Tencent Games has accumulated rich experience in overseas distribution, and has summarized many rules from many failed products, and this time "Honor of Kings" went overseas relatively smoothly.
From in-game text, heroes to skin dubbing, system broadcasting, etc., "Honor of Kings" has been deeply localized to facilitate local users to better understand the game.
For example, the hero "Zhu Bajie" in "Glory of Kings", in order to take care of different overseas religious and cultural practices, "Glory of Kings" transformed the image of Zhu Bajie into a human form and renamed Ata. Similarly, the hero of the "Bull Devil King" also quietly changed his name and image.
Picture: The picture above is the national service of Zhu Bajie, and the picture below is "Zhu Bajie" after the name and image of the external service is changed
The female heroes "Little Joe" and "Angela" have also grown up, from young girls to girls, which is more in line with foreign aesthetic habits.
Pictured: National service Xiaoqiao above, international service Xiaoqiao below
And like some famous characters, such as Houyi, Sun Wukong, Daji, the game has inherited the original image of the national service, and the name is also translated in Hanyu Pinyin, retaining the characteristics of Chinese culture.
In addition, the biggest change is that the game's panel characters have been changed from Arthur to Yunying.
The game Kanban girl is very important for the promotion of a game. Many times, the outing of the game Kanban girl can bring a lot of attention to the game to a certain extent. For example, Artoria in "FGO" and Keqing in the early days of "Genshin".
An appealing game character that can bring a lot of "tap water" early in the game. Some players will spontaneously cos game characters, and some fans will actively produce content related to game characters.
The handsome and hearty Yunying has countless fans in Brazil and has become the "ambassador" of the overseas version of "Glory of Kings".
For example, the "Honor of Kings Brasil" YouTube account posted a promotional video featuring Yunying, which incorporated local Brazilian football, dance, street graffiti and other cultural content, and the video received 2.36 million views.
2) Marketing localization, pull new tricks
In order to attract more traffic, "Honor of Kings" is also very hard to pull new in the local area.
First of all, "Honor of Kings" pays great attention to the content promotion of overseas social media, attracting a wave of attention in advance before the game is new.
The pre-registered CG "Hello, Brazil" has been viewed more than 2.3 million times on YouTube alone, and subsequent CG videos with the theme of heroic stories such as Yunying and Lan have also attracted the attention and praise of many Brazilian players.
Secondly, when the game was about to be released, the "combination fist" of "Honor of Kings" was even more frequent.
Source: DataEyE
As early as early March, in the official social media, buy volume advertising lottery to give away jeeps (money hook, the temptation is too great!). ）
The first prize Jeep Compass has a market price of about 150,000 yuan in China, the second prize gives a motorcycle, and the third prize gives a mobile phone, which may be the most "trench" game to pull new benefits.
The wealthy "Glory of Kings" quickly attracted the attention of a large number of onlookers and received a large wave of exposure.
Source: "Glory of Kings Overseas Edition" promotional page
Then, a week before the game was launched, the official invited many well-known Brazilian anchors such as Rakin to carry out a gimmicky confrontation match, most of these anchors are some MOBA game "old drivers", attracting a large number of vertically accurate fan users.
In addition, on Twitch, YouTube and other platforms, a large number of anchor KOLs began to broadcast "Honor of Kings", and many videos had tens of thousands of views, bringing huge traffic to the early stage of the game.
By the official launch day on March 8, the launch video had received more than 600,000 views in less than a day, proving the success of a series of publicity operations for "Honor of Kings".
In the following two weeks, Honor of Kings continued to add new heat to the game by creating festivals and previewing new events.
03
Is Tencent Games in a hurry?
There are only seventeen domestic Internet DAU products with more than 100 million yuan, and "Honor of Kings" is the only game product.
As a game released in 2015, although it still ranks first in revenue, it has now fallen into a situation of weak gameplay innovation.
Many fans complain about it: one mind only wants to make money, and the skin is updated so much faster than the character.
And the Tencent department has not produced a "Honor of Kings" level hit for many years, and other cutting-edge game companies, such as Mihayou and Lilith, are imposing and are constantly dividing the cake of the domestic game market.
Under internal and external troubles, Tencent Games has indeed begun to be anxious.
For Tencent, the contribution of the game business to Tencent's revenue has remained at about 30% in the past three years, which is a very important cash flow pillar for Tencent.
The decline in game business revenue for four consecutive months will cause insufficient blood supply to the development of Tencent's overall business.
In addition, since last year, the rapid development of AI technology has caused Internet companies to rush into the game, and foreign ChatGPT-based products are leading the trend.
Domestic Internet companies will inevitably need to compete for this future cake. In the process of competition, a large amount of cash flow investment is required, and Tencent will face certain cash flow pressure.
Tiger Sniff counted six times in Tencent's history when its stock price fell sharply, four of which were directly or indirectly related to games - namely, the impact of the financial crisis in 2008, Tencent's stock price (no reinstatement) was close to being cut; In 2010, the growth rate of the game industry slowed down, and Tencent's stock price retraced 30% from its high; In 2015, the proportion of iOS game best-selling lists declined, and Tencent's stock price retreated again; In 2018, the issuance of game version numbers was suspended, and Tencent's stock price was almost cut off.
Under the new changes, Tencent needs games more than ever, so Tencent Games has opened the era of "great navigation".
On the one hand, let "Honor of Kings" go overseas to become a world-class IP and earn money from "super IP". Industry insiders predict that the overseas expansion of "Honor of Kings" is expected to add up to 10 billion yuan to Tencent's annual flow.
The operation agency speculates that "Honor of Kings" is only the first step, followed by the derivative masterpiece, and the open-world game "Honor of Kings World" is its "king bombing".
On the other hand, since the restoration of the version number, Tencent's reserves of "quasi-explosive" games have become increasingly abundant, such as "Honor of Kings International Server", "Intrepid Contract National Service", "Ark of Destiny", "White Night Aurora" and "The Division Blockade". These will become the growth points of Tencent Games this year.
To sum up, Tencent Games' strategy this year is: copy overseas popular games to China, and let domestic ace products go overseas to find growth poles.
04
end
"Honor of Kings" has been released in Brazil for less than a month, and it has achieved some success, but it still needs to be continued.
The overseas expansion of "Honor of Kings" has undertaken a lot of expectations from Tencent Games, and Tencent's development needs the support of the game business.
At the same time, as the most popular and gold-attracting game in China, whether "Honor of Kings" can make money overseas and find new solutions for the overseas localization operation of Chinese games will also have a far-reaching impact on the road of Chinese games to the sea.
How far can Honor of Kings go out of its comfort zone? We'll see.
Resources:
"Glory of Kings" officially goes to sea! On the first day of the service, it topped the Brazilian free list, and the South American old iron music was broken" gamelook
How is the battle for Brazil, "Glory of Kings" vs "MLBB"? 》 DataEye
""Glory of the King" goes to sea, to regain the lost land for the younger brother" surging
""Glory of Kings" officially started overseas, and the first stop won the best-selling Top12 mobile game in Brazil