After the launch of the new tour, Mihayou "killed crazy" again in May.
Yesterday (June 8), the tripartite organization Sensor Tower released the latest report that in May this year, the revenue of "Honkai: Star Dome Railway" (referred to as "Star Railway") was 3.4 times that of April, becoming Mihayou's highest-grossing mobile game product.
According to the report, "Star Iron" and "Genshin" ranked 2nd and 7th respectively on the global mobile game best-selling list in May. This helped Mihayou's revenue surge by 41% month-on-month, reaching a record high, "marking Mihayou's successful breakthrough from game design to user circles." ”
After a period of silence, the game version has resumed issuance, and domestic game companies seem to be coming out of the most difficult moment. But in the space of two years, the market seems to be changing, and the established giants no longer sit back and relax.
Source: WeChat public account SensorTower
When the "new forces of game creation" rise, the pressure will inevitably come to Tencent NetEase.
"Star Iron" breaks the circle, Mihayou finds a new "cow"?
Unlike Genshin, as a galactic adventure strategy game, Star Iron adopts turn-based strategy gameplay.
Similar to Genshin, players can explore the game world, open treasure chests, obtain power-ups, and develop characters. As the story progresses, some characters will join the player's "team", but powerful characters and props basically need to be "jumped" (drawn cards) to obtain.
Basically the same as Genshin, the props required for card draw in Star Iron ("Star Qiong") can be obtained for free from the game or purchased directly in RMB (160 Star Qiong / time, about 16 yuan) - this is also the main krypton gold point in the game.
Screenshots of in-game graphics
In theory, the "white" benefits provided by the game are actually not few.
In April this year, some netizens on Xiaohongshu roughly estimated that from the release of "Star Iron" to the update on June 8, players can get about 20,000 Xingqiong (about 130 draws) and more than 140 "tickets" for free in the game.
But in fact, these benefits require deep participation in the game to get them, and there is a threshold in terms of game duration, etc. This means that, in most cases, players still have to pay krypton gold if they want to quickly get their favorite character.
The performance of "Star Iron" in May exceeded that of April, which has something to do with the krypton gold mode of the game.
Similar to Genshin, in addition to the resident card pool, Star Iron will launch a limited-time UP (probability boost) card pool for players to draw their favorite characters every issue. The probability of a single-draw five-star target is 0.6%, according to the guarantee mechanism, five stars must be issued in 90 rounds, but the first "guarantee" has a 50% probability of "crooked", and the second "guarantee" (that is, 180 rounds) will be in the current role.
Each issue of five-star characters or weapons is different, and the player's krypton gold behavior will show a certain degree of volatility.
Sensor Tower reported that with the launch of the game character "Jingyuan" on May 17, the flow of "Star Rail" reached the second peak since its listing, and the revenue in May was 3.4 times that of April, and "Star Rail" became Mihayou's highest-grossing mobile game product.
Screenshots of in-game graphics
From role-playing to turn-based strategy, gameplay has been achieved. Judging from the data released by the first release of "Star Iron", Mihayou has walked out of the "original god" and found a new flowing cow.
According to the "April 2023 Game Industry Report" released by Gamma Data, before the official launch of "Star Rail", the number of reservations on the whole network exceeded 30 million, and after opening the pre-download, it topped the multi-country App Store free list.
Five days later, "Star Iron" entered the TOP10 of the gamma data mobile game turnover list of the month, with an estimated turnover of more than 1.2 billion yuan in the first month. Combined with Sensor Tower's forecast, the revenue of "Star Rail" will rise to another level in May.
Source: WeChat public account "Game Industry Report"
However, considering that the game has just been released, it remains to be seen whether "Star Iron" can continue its strong performance in the future.
Objectively speaking, the worldview structure and audience provided by Mihayou's old IP "Honkai" are important reasons for the existing achievements of "Star Iron". The success of "Star Iron" does not all depend on the blessing of the development and management experience of "Genshin".
The pressure remains. In addition to Krypton Gold, some problems with the "Star Iron" game itself on social media have caused controversy among netizens. For example, the current amount of game content is too small, and the "long grass period" is too long: some players can complete the version activity content that theoretically lasts nearly half a month in very little time.
In terms of competition, the "two-dimensional gene" is not unique to Mihayou. Taking Shanghai as an example, companies such as Lilith and Eagle Point have performed well. In the two-dimensional track, "Star Iron" still needs to be guarded in the future.
The real challenge of Tencent NetEase is the industrial R&D model that players are willing to pay?
The significance of "Star Iron" is largely outside Mihayou.
Looking at the revenue flow or revenue volume alone, "Star Rail" and "Genshin" will not pose an essential threat to large manufacturers such as Tencent and NetEase.
According to the financial report, in the first quarter of this year, Tencent's local game market revenue was 35.1 billion yuan, a year-on-year increase of 6%, stopping the decline of 4% last year; In Q1 this year, the net revenue of NetEase games and related value-added services was 20.1 billion yuan, an increase of 7.6% year-on-year - according to the official website of Lingang Group, Mihayou's revenue in 2021 just exceeded 20 billion yuan.
Value-added services, including games, have provided Tencent with more than 50% of its revenue Screenshot of its financial report
In terms of volume, Miha is still far from Tencent and NetEase. But Mihayou's revenue growth is very strong.
According to Huaxin Securities, in the first half of 2017, Mihayou achieved operating income of 588 million yuan and net profit of 447 million yuan (from the prospectus); after the global launch of "Genshin" in 2020, Mihayou's revenue that year was 10.128 billion yuan (Shanghai Enterprise Union); by 2021, under the premise of a high base, Mihayou's revenue doubled again.
According to gamma data statistics, from Q1 to April this year, the ranking of the top 5 mobile games on all platforms has basically not changed. Tencent firmly occupies the top 2 seats, followed by Mihayou, NetEase, and Ali's Lingxi Interactive Entertainment.
If "Star Rail" can continue its current performance in the future, then it will definitely gain a place in the TOP10 list. Someone enters, naturally someone wants to be out, and even the monthly flow TOP5 re-"row seats", it is not impossible.
Source: WeChat public account "Game Industry Report"
But turnover and market share alone are not the crux of the matter.
If "Star Iron" replicates the success of "Genshin", then Mihayou's income will cross another level. However, the high revenue growth rate is only a appearance, and what really needs Tencent and NetEase to be nervous is the "game assembly line" behind "Star Iron".
Huaxin Securities' previous research report pointed out that the development team of "Star Rail" has more than 400 people, which is roughly the same as "Genshin". After the success of Genshin, Mihayou's most valuable asset was "an efficient and mature methodology and production line for making virtual worlds".
If you can reuse past experience to develop follow-up products, go to different pendant fields to create explosive models, you can also get market recognition. Then this means that "middle factories" such as Mihayou can streamline game products and achieve "replicable success". This industrialized R&D model is the most fundamental impact on traditional large factories.
"Can't copy the blockbuster", Tencent NetEase tried to overcome the Achilles' heel
The change of times and the end of old games are facts that big manufacturers need to admit.
Tencent and NetEase are big and inevitably bear the brunt of the numbers.
This objectively amplifies the pressure brought about by the rise of rookies such as Mihayou.
According to Times Finance statistics, from the beginning of 2022 to December, at least 75 domestic game projects announced their dissolution or suspension of operation. Among the major manufacturers, Tencent has the largest number of suspended projects (26), followed by NetEase (14), Station B (10) and Sunrise Lightyear (4). Among them, there are many works with a long history such as "QQ Hall", and works with a certain degree of popularity such as "Qin Shi Mingyue World".
Discontinued games in 2022 (partial) Screenshot of Times Finance report
It is difficult to come out with phenomenal explosions and cannot consolidate competitiveness, which is the Achilles' heel of Tencent and NetEase.
The lack of new games and over-reliance on old games are Tencent's main problems. In terms of investment in new games such as "Dawn Awakening", Tencent is not "stingy", but judging from the market response, it is lackluster and difficult to say "explosive".
Judging from the quarterly report, although "Golden Shovel Battle" and "Dark Zone Breakout" have brought incremental turnover to Tencent, the new games are still immature compared to old games such as "Honor of Kings" and "Peace Elite".
Tencent has increased its investment in new tours this year and left 1/3 of its "firepower" to the second dimension.
At the Tencent Game Conference in 2022, Tencent only released 12 new game products; But this year, Tencent released 18 new games in one go, a year-on-year increase of 50%. Among them, there are 6 two-dimensional games, including "White Night Aurora", which won the first battle in overseas markets.
Source: "White Night Aurora" WeChat public account
However, if Tencent wants to win the "second dimension", it will still be a tough battle in front of it.
Tencent's 6 two-dimensional games cover strategy connection, role-playing and card strategy in terms of gameplay, which can be described as comprehensive. However, in order to regain attention and topicality in the two-dimensional circle, it still depends on explosive models. In essence, Tencent Xinyou plays the role of a "defender", winning more game users back and allowing local games to continue to grow.
There is a slight difference with Tencent. NetEase's current flowing cow "Egg Boy Party" is very young, and its public beta time is May 2022. On the whole, it and NetEase's old IP "Fantasy Westward Journey" have formed an old and a new layout. However, NetEase is also eager for new explosive models, considering that many of NetEase's "explosive models" are difficult to operate in the long term, and the pressure is actually not small.
Judging from public information, this summer may become a key node for NetEase. In the Q1 earnings call, NetEase said that the "Against the Water and Cold" mobile game will be released on June 30. NetEase has invested hundreds of millions of dollars in the mobile game "Against the Water and Cold", and is equipped with a large number of artificial intelligence technologies, which has the momentum of "back to the water".
"Let MMO be great again", "First change your own life, completely eradicate the stubborn disease of 'krypton gold'", "Let the wool (revenue) come out of the cow (brand product placement)"... In terms of publicity, the mobile game "Against the Water and Cold" is very high-profile, and its official Weibo even published an article "What we learned from the violent death of Qing Yu Nian mobile game", which caused controversy inside and outside the industry.
"Against the Water and Cold" mobile game high-profile promotion WeChat public account screenshot
In order to market and even offend friends, the mobile game "Against the Water and Cold" can be described as sparing no effort. The remaining suspense is whether the game reputation and performance of "Against the Water and Cold" can win back a game, and if word of mouth and performance are both lost, then the price will be even greater.
According to the official disclosure of the mobile game "Against the Water and Cold", the total number of reservations for the game on the whole network exceeded 30 million, and the chassis was not bad. But if the performance against the water is not excellent enough, I am afraid that NetEase will lose more than just the market ranking.
NetEase and Tencent have a gap in volume and traffic, but the more obvious difference is in overseas business.
Tencent's games performed well overseas. In the first quarter of this year, its international market contributed 13.2 billion yuan in game revenue, a year-on-year increase of 25%, and overseas revenue accounted for 38% of game revenue in the local market. But except for "Harry Potter: Magical Awakening" and "Egg Boy Party" "Going to Sea", NetEase's quarterly report barely mentioned overseas markets.
According to a report by China Daily in May this year, NetEase Games plans to contribute 40-50% of revenue in overseas markets in the future, but its contribution rate is currently about 10%. According to the financial report, the net income of NetEase games and related value-added services in 2022 will be 74.567 billion yuan. NetEase Games' overseas revenue and Tencent are not in the same order of magnitude.
The game goes overseas, and it cannot provoke the growth of NetEase in the short term.
Screenshot of China Daily report
In the overseas market, Chinese manufacturers are blooming in a hundred flowers, and the pressure of competition is not small.
According to the 2022 annual report of 37 Interactive Entertainment, during the reporting period, the company achieved operating income of 16.406 billion yuan, of which overseas operating income was 5.994 billion yuan, an increase of 25.47% over the same period of the previous year, reaching a new high; From the perspective of unlisted companies, Mihayou and Lilith have maintained a good growth trend, and NetEase's future road is not easy.
In recent years, Mihayou, Lilith and other medium-sized factories have maintained a rising trend, which is conducive to the market to further move towards full competition, forcing the old manufacturers to reform and innovate. In a way, this is a good thing. From the perspective of business model, once the logic of "industrial research and development" runs through, it is bound to have an impact on the market structure, and even become a new feature of China's games going overseas.
However, different voices are needed in the market. It is hoped that more products and other "small and medium-sized factories" will rise and make waves in the game market again like Mihayou hit Tencent NetEase. For the dilemma of "difficult to produce phenomenal products" of established manufacturers, they may also bring more inspiration.