This summer, the game is not hot, what's wrong?
Even compared to the high heat of the movie summer file, it is still a little weak.
What's wrong?
The fact that the leading A-share game company Sanqi Interactive Entertainment, whose stock price has doubled during the year and has a market value of more than 60 billion yuan, was placed on file for investigation by the CSRC caused quite a stir - its chief and vice chairman are also the founder and co-founder of the company, respectively, and were also placed on file for investigation for suspected information disclosure violations and violations.
Just over two months ago, the announcement of abnormal stock trading fluctuations issued by 37 Interactive Entertainment clearly stated: "There is no need to correct or supplement the information disclosed by the company in the early stage." ”
In fact, at the beginning of this year, various companies in the game industry are on the cusp of the storm, and there are certain ups and downs.
Especially on top of the summer season.
On June 29, 2023, Tencent, Netease, and Mihayou issued a notice on the restriction of play for minors during the summer vacation of 2023: minors can only play games for one hour every week between 20:00 and 21:00 on Fridays and Saturdays, and the rest are prohibited periods.
Compared with Tencent's "pioneers" in 2022, the three major domestic game companies this year can be described as in step and worthy of recognition.
Lengthening the dimension, 2023 is also the third year of the "limited play order". Judging from the collective voice of the head, the restriction has had a profound impact on the industry.
On July 3, the second trading day after the three major manufacturers issued notices, A-share game stocks opened sharply lower, with 25 of the 28 game companies showing a downward trend.
As of the close, Shengtian Network fell 19.24%, Shenzhou Taiyue fell 14.21%, Glacier Network fell 10.53%, Giant Network fell 8.31%, Sanqi Interactive Entertainment once touched the drop limit during the session, Yao Kee Technology, Century Huatong, Electric Soul Network and other drop limits.
Combined with the above performance, some public opinion believes that the limited play makes the game manufacturer very hurt?
Where should game manufacturers like Sanqi Interactive Entertainment go in the future?
Is that really the case?
In this regard, Chen Shen, reporter of "Popular Securities News", Wang Ningning of Dahe Financial Cube, and Li Haoyue, reporter of "Securities Daily", had an exchange with Shule respectively, and Poor Dao thought:
The restriction has only a positive impact on game manufacturers.
Since the continuous improvement of the anti-addiction system and the introduction of the strictest anti-addiction regulations, the restriction of minors on playing games has become a rule, and it is not based on whether the game manufacturer issues a restricted play order.
The issuance of relevant restricted play orders, from only Tencent to many manufacturers to publicly publicize, in fact, is to show a gesture and reflect their sense of social responsibility, by the way.
As for the problem of minors' addiction to games, after years of structural adjustment and category adjustment, the consumption and duration of minors in the games of mainstream game manufacturers have dropped to extremely low.
Coupled with the fact that game manufacturers have consciously targeted young people with stronger spending power and more game time in game development, and vertically cultivated user segments such as two-dimensional games and women's games, the problem of minors' addiction to games has been solved to a certain extent.
At the same time, A-share game stocks are in fact only second tier in the domestic game industry, and Tencent, NetEase and Mihayou are not among them.
Therefore, the rise and fall of its stock price is not enough to represent the overall trend of the domestic game industry.
At the same time, although there is news that technological breakthroughs such as AIGC and AI large models are also constantly informed, they have not stimulated the rally of game stocks, foolishly thinking:
Generative AI can be highly applied to the gaming sector, and although it is positive, it is not currently used effectively, but the future development direction has limited impact on the stock price.
In contrast, the past buying model of game manufacturers has indeed reached a dead end, and Sanqi Interactive Entertainment is an example.
37 Interactive Entertainment has increased its investment in purchase volume since 2019. In that year, the company's sales expenses jumped from 3.347 billion yuan in 2018 to 7.737 billion yuan. In the following three years, the company's sales expenses remained high, 8.213 billion yuan, 9.125 billion yuan and 8.733 billion yuan respectively, accounting for more than 50% of the total revenue in the reporting period.
The change in purchase volume and investment directly doubled the performance of 37 Interactive Entertainment. In 2019, the company's revenue increased by 73.3% year-on-year, and the net profit attributable to the parent increased by 109.69% year-on-year.
However, compared with the rapid growth in 2019, in 2020, the year-on-year growth rate of 37 Interactive Entertainment's revenue dropped to 8.86%, and the buying volume model is difficult to sustain.
At the same time, the "2022 Global Mobile Game Buying White Paper" shows that there will be about 20,300 mobile game purchase products in the market in 2022, down 13.7% year-on-year, which is the first negative growth in the industry in the past three years.
The reason is that the current game industry is competing for quality, not volume.
Compared with R&D, buying volume is the lowest threshold and the easiest to copy.
The games with high purchase mode are concentrated in copycat, skin-changing games, or legendary games, that is, non-boutique games.
This type of game has the problem of faster users dissipate, and it is necessary to attract new players through purchases.
Obviously, moving towards quality and participating in global competition has become a must for many domestic game manufacturers such as Sanqi Interactive Entertainment.
Specific to 37 Interactive Entertainment, its overseas strategy mainly focuses on agents, compared with the strategy of using self-developed products overseas to hit the market, the advantages and disadvantages are also very obvious:
The advantage is that it can be full, quickly break into various markets, and launch different products to develop markets with different needs.
The disadvantage is that the agent, although the risk is low, also needs to be shared with the developer, and the profitability is usually not too strong, except of course that the game becomes a super hit through the agent.
According to public information, 37 Interactive Entertainment is a global TOP20 listed game company, and its games include "Douluo Continent: Soul Master Showdown", "Puzzles & Survival", "Song of the Cloud City", "Call Me Big Treasurer", "Little Ant Country" and so on.
Revenue mainly comes from mobile games, with more than 95% of the total revenue of 16.4 billion yuan in 2022 coming from mobile games.
Sanqi Interactive Entertainment, which has enough background, and the subsequent overseas breakthrough, in fact, there are still enough hole cards.
Author Zhang Shule, columnist of People's Daily and People's Posts and Telecommunications, expert of CEI Media Think Tank, senior TMT industry commentator, newly published "Self-media Writing from Beginner to Proficient" (Tsinghua University Press)