Nowadays, in the cruel global market competition, there are not many manufacturers who can ensure the success probability of products, and Sanqi Interactive Entertainment is one of them.
Some time ago, "Devil M" of Sanqi Interactive Entertainment went overseas in South Korea, and its overseas revenue surged by 107% month-on-month in February, ranking firmly in the top 5 of South Korea's Google Play best-selling list. Going further, its products such as "Puzzles & Survival", "Song of the City on the Cloud", "Call Me Big Treasurer", "Douluo Continent: Soul Master Showdown" and other products have also achieved good results in many markets around the world.
Driven by the continuous promotion of high-quality products, the performance of 37 Interactive Entertainment has grown steadily. According to the financial report, in the past five years, the revenue of 37 Interactive Entertainment has increased from 5.53 billion yuan in Q3 2018 to 11.68 billion yuan in Q3 2022, and has been in the 10 billion camp for three consecutive years.
In addition to soaring performance, the transformation and change of 37 Interactive Entertainment has also been fully verified. In the years when mobile games have just taken off, everyone's impression of 37 Interactive Entertainment is still legendary and miraculous. Nowadays, SLG, MMO, business simulation, national style, steampunk... From the inside out, 37 Interactive Entertainment has obviously removed the old label, maybe it's time for us to take a look at this company with new eyes.
Find the correct positioning and deepen the diversified track
Since the rise of the wave of mobile games, 37 Interactive Entertainment, which started as a page game, has begun the road of transformation. The reason why it can grow year after year is that its strategies such as "multi-product strategy" and "research and operation dual engines" can be said to be indispensable.
Let's take a look at the results of the transformation of 37 Interactive Entertainment:
First of all, a diversified product matrix was established internally, and the game successively created turnover records.
37 Interactive Entertainment's online product types cover SLG, MMO, cards, simulation management and other categories, and there are many breakthrough masterpieces in various tracks in recent years:
For example, the national style game "Call Me Big Treasurer", based on the Qingming Shanghe map, and the Song Dynasty business culture as the background, provides players with a life experience in the Song Dynasty; "Puzzles & Survival" innovatively integrates SLG+ match-3, lowering the entry threshold and improving users' sense of early goals. "Douluo Continent: Soul Master Showdown" not only restores the IP, but also hits the orientation of IP fans and pan-users through the design of the big world, weather system, rich battle animation, etc.
With its products successively refreshing the user's game experience, 37 Interactive Entertainment has also been able to successfully break old labels such as legends and miracles, and continue to set new records: "Douluo Continent: Soul Master Showdown" has been served for 100 days, with a turnover of up to 1 billion+. "Puzzles & Survival" is the first SLG hit under 37 Interactive Entertainment, and has become the second place in China's game overseas revenue list for two consecutive months.
Secondly, the courage to challenge difficult categories, the competitiveness of the industry is expanding.
The track laid out by Sanqi Interactive Entertainment today belongs to the existence of large-scale and fierce competition at home and abroad. Take SLG as an example, the Matthew effect is obvious, and it is quite difficult for new products to break through. Coupled with the high R&D threshold of this category, the long payback cycle, and the test of patience and long-term operation capabilities, most manufacturers dare not enter the game easily.
With the help of "Puzzles & Survival", 37 Interactive Entertainment has opened up a path of its own in the hardcore SLG track.
On the other hand, cards have a long history, and if they do not accumulate and master a mature methodology, manufacturers are also very cautious to enter the game. 37 Interactive Entertainment continues to occupy a larger market share in the card track by restoring IP + "Douluo Continent: Soul Master Showdown", which improves the comprehensive quality and strategic depth, and "Empty Fortress: Set Sail", which integrates theme + gameplay.
Of course, although the competitiveness of the 37 interactive entertainment industry has been greatly improved, the status of the track needs to be further consolidated and improved.
At present, their strategy is to continue to cultivate the existing track, while laying out richer categories. Its self-developed Three Kingdoms SLG "Hegemony" and Women's Dream to MMO are proof of their attempts to expand their territory.
Why can 37 Interactive Entertainment reap these achievements? It has a great relationship with its resource advantages and enterprise genes, as well as the integration of research and operation, high-quality, diversified and globalization strategies.
In terms of R&D, in the boutique era, the user positioning of 37 Interactive Entertainment is more youthful, willing and able to invest a lot of R&D expenses. It can be seen from the financial report that 37 Interactive Entertainment has always attached great importance to internal R&D investment. He Yang, senior vice president of 37 Games, a research and development brand under 37 Interactive Entertainment, once said that they are willing to offer more than one million annual salaries for talents with SLG track experience - not counting the project share. In addition to self-research, they will also establish contact with a group of high-quality R&D teams through acquisition, investment, in-depth strategic cooperation, etc., and continue to enrich product reserves.
At present, 37 Interactive Entertainment has five AI and big data technologies to empower research and development, including the game R&D platform "Zeus" and the user portrait system "Ares". This also lays a solid foundation for them to achieve innovative breakthroughs, diversified layouts, improve product quality, and ultimately successful transformation.
In terms of distribution, 37 Interactive Entertainment is leading the disruption layer of many manufacturers at the intelligent distribution level. They have even built an intelligent delivery platform "Quantum" and an intelligent operation analysis platform "Tianji" to improve customer acquisition and ROI.
However, with the peak of Internet traffic dividends and the change of marketing methods, the traditional buying volume play method has also ushered in a period of change.
According to Yuan Hao, head of the project distribution department of the 37 Mobile Game Operation Center of the 37 Interactive Entertainment distribution brand, 37 Interactive Entertainment still follows the underlying logic of traffic operation, but has entered version 2.0, which is not "simple buying volume", but emphasizes the integration of product and effect, content construction, user operation, etc., and evolves into composite traffic operation.
Today, 37 Interactive Entertainment has formed a new "diversified + composite traffic operation" model in terms of research and operation, laying a good seed for the continuous creation of explosive models.
Going to sea, the "third carriage" of 37 Interactive Entertainment
After consolidating the foundation of domestic self-research and development, going to sea can be said to be the "third carriage" of Sanqi Interactive Entertainment.
Earlier, 37 Interactive Entertainment had set the goal of "building another '37' overseas". They have been exploring the overseas business since 2012, accumulating experience and stepping on many pits. In 2017, "Eternal Era" was launched in Hong Kong, Macao, Taiwan and Southeast Asia, helping 37 Interactive Entertainment's overseas performance achieve multiple growth, exceeding 900 million in revenue.
In the past three years, 37 Interactive Entertainment's revenue in overseas markets has ushered in a new round of sharp growth. According to the financial report, in 2021, the overseas game business revenue of 37 Interactive Entertainment will be 4.777 billion yuan, an increase of 122.94% over the same period of the previous year. By the middle of 2022, overseas revenue will reach 3.033 billion yuan, a year-on-year increase of 48.33%. Overseas income has been the cornerstone of 37 Interactive Entertainment's annual performance growth.
According to data AI data, thanks to the soaring revenue from going overseas, 37 Interactive Entertainment's ranking on the list of domestic manufacturers' overseas revenue has also risen from 15 in the past to TOP3.
At present, "Puzzles & Survival" and "Song of the Cloud City" contribute most of the overseas income of 37 Interactive Entertainment. The former, as of the end of January 2023, the cumulative overseas revenue exceeded US$1 billion. The latter is South Korea's Chinese mobile game with the highest revenue in 2022, with a cumulative revenue of more than $200 million in overseas markets.
According to the "February 2023 Game Industry Report" released by Gamma Data, 37 Interactive Entertainment's self-developed "Douluo Continent: Soul Master Showdown" has recently gained good momentum in Hong Kong, Taiwan, Thailand and other places in China, and is the top 5 product growth in overseas markets in February.
The reasons for the surge in overseas revenue are also inseparable from experience accumulation and strategic transformation.
Earlier, 37 Interactive Entertainment's overseas strategy was to "break through the partitions" and bring products to different markets through localization. Since 2018, they have adjusted their overseas strategy to customized distribution, focusing on tracks and categories, and adapting measures to local conditions. Its first SLG hit "Puzzles & Survival" is their fully customized product from R&D and design to distribution and acquisition for overseas players' preferences.
This method tests the manufacturer's ability to select products, optimize and distribute. Because in the early stage of game project establishment, overseas distribution teams need to intervene in the product development process, help develop long-term operations from product empowerment and optimization, to refinement and localization. Sanqi Interactive Entertainment calls this change from "picking fruits" to "planting trees". "Good 'fruit' is getting less and less, and 'planting trees' is very important." 37 Interactive Entertainment has emphasized this point in public many times.
Seeking a larger territory in the global market, what does 37 Interactive Entertainment lack?
After the industry has entered the high-quality industry, many companies are transforming + walking on multiple legs, but due to the company's genes or resources, we have seen many cases of transformation failure. But Sanqi Interactive Entertainment is undoubtedly a success.
At present, 37 Interactive Entertainment is one of the few manufacturers in the industry that can continue to occupy the 10 billion camp after Tencent and Netease. In the February 2023 global revenue ranking of Chinese mobile game publishers released by Sensor Tower, 37 Interactive Entertainment occupied the fourth place. However, from the perspective of market share, Sanqi Interactive Entertainment still has a lot of room for improvement.
If you want to go to a higher level and seek a larger territory in the global market, what does 37 Interactive Entertainment lack?
37 Interactive Entertainment's current stable operation of games, although self-research and agency distribution go hand in hand, but also highlight the long-term revenue ability at home and abroad. However, compared with overseas, 37 Interactive Entertainment has always lacked a long-term explosive model that can change the top-selling pattern in the domestic market. If a blockbuster self-developed new product emerges and subverts the existing competition pattern in the domestic market, 37 Interactive Entertainment will greatly narrow the distance between it and the head manufacturers.
At the 14th anniversary celebration held by 37 Interactive Entertainment some time ago, Li Yifei, founder and chairman of 37 Interactive Entertainment, mentioned that 2023 will be a key year for 37 Interactive Entertainment to achieve change and breakthrough, and product matrix renewal and transformation.
According to the latest information, 37 Interactive Entertainment has reserved nearly ten self-developed products, focusing on cards, SLGs, MMOs, and simulation business tracks, covering Western magic, otherworld fantasy, medieval history, history of the Three Kingdoms, ancient style, female orientation, mythology, oriental fantasy and many other themes, and the product reserve matrix is richer and more diverse. Among them, the two self-developed games "Hegemony" and "Shake a Dream" have obtained version numbers and are waiting to be launched; Other blockbuster products include "Mortal Immortal Cultivation", "Kingdom Fire" and so on.
Of course, the most important thing behind the product is the talent.
Especially after changing from "picking fruits" to "planting trees", research and operation are more difficult, which puts forward higher requirements for the level of the 37 Interactive Entertainment team. "Compared to picking fruit, planting trees is undoubtedly more difficult, we need to think about more dimensions, the product release cycle is longer, we need to be more patient and more resilient."
Therefore, if 37 Interactive Entertainment wants to reach a higher level of performance and achieve greater ambitions of globalization, it obviously needs more high-quality talents to join and continue to improve its combat effectiveness.
We also expect that as 37 Interactive Entertainment continues to deepen its transformation and change, we can see them bring more "subversive" works that shock the market.