Recently, the State Press and Publication Administration announced the approval information of imported online games in 2023, and 31 imported games have obtained version numbers, including some big IPs that we are familiar with. For example, "Avatar: Return to Pandora" is a derivative of the "Avatar" IP production, "The Lord of the Rings: Strife" is set in the third era of Middle-earth, and "The Legend of Sword and Fairy: Origin" is the orthodox sequel to the IP of The Legend of Sword and Fairy. (Reference source: Shangguan News, 2023.09.02)
With the issuance of this batch of imported game version numbers, the number of imported game version numbers issued this year has exceeded the total number in 2022, and the supply has increased and the explosion continues. In this context, will the Internet game industry also usher in a full recovery? Xiao Xia will talk to you about the topic of "games" today~
01
The number of imported game version numbers issued exceeds 2022
Let's first take a look at the imported game version numbers issued this year from the two aspects of "number" and "quantity".
From the perspective of "number", the State Press and Publication Administration recently updated the approval information for imported online games in 2023, and 31 new games were approved, in addition to 21 mainstream mobile games, there are 2 Switch games, 7 client games, and 1 mobile and client game. In previous years, imported game version numbers were generally only issued once a year, but this year, together with the first batch of 27 models issued before, a total of 58 imported game version numbers were issued, an increase of 14 compared with the whole year of 2022 (44 models), and the normalization of version number issuance has been formed.
From the perspective of "volume", there are many popular products of large manufacturers and big IPs in this year's release. For example, Tencent's "Voyage: Ambition", NetEase's "Lord of the Rings: Strife", Perfect World's "Persona: Phantom of the Night", Zulong Games' "Avatar: Return to Pandora", and Lingxi Interactive Entertainment's "The Legend of Sword and Fairy: Origin" all have the blessing of popular IP. In addition, the genres of these games are also quite rich, such as "The Lord of the Rings: Strife" adapted SLG mobile game, outstanding performance in the Japanese and Korean markets, "Persona: Phantom of the Night" has great potential in the two-dimensional mobile game track, and the number of reservations on all platforms has exceeded 2 million. (The above reference: Wanlian Securities, 2023.09.01; Shangguan News, 2023.09.02; Southern Metropolis Daily, 2023.08.29; Financial Sector, 2023.08.29; not recommended for individual stocks here)
02
Gaming industry stability has been enhanced
So what do we think about the phenomenon of "quality" and "quantity" in the issuance of imported game version numbers? Contact the domestic game version number we talked about before to increase the frequency of distribution, this time the import game version number issuance once again verifies that the game version number has returned to normal distribution, whether it is the domestic game version number or the imported game version number The number and rhythm of issuance are gradually stable.
And this situation has three effects:
First, the stability of the game industry has been enhanced. The return to normal issuance of game version numbers will help game companies reasonably arrange game development and launch cycles. (Reference source: Daily Economic News, 2023.09.01; Financial Sector, 2023.09.01)
Second, it is conducive to the recovery of the game industry. According to the "China Game Industry Report from January to June 2023", in the first half of this year, the actual sales revenue of the domestic game market was 144.263 billion yuan, down 2.39% year-on-year and up 22.2% month-on-month, and the market is in a recovery trend. The continuous release of product reserves of game companies, superimposed on the injection of imported games into the market, can effectively promote the continuous improvement of the supply side of the game market. (Source: China Securities News, 2023.07.27; China News Network, 2023.07.27)
The third is to further enhance market confidence. The market has returned to normal, and the confidence of all parties in the industry has been effectively boosted, which naturally can also drive the continuous repair of industry valuations.
03
Empower overlay games to go to sea
In addition to the normalization of version issuance, there are two other trends in the game industry that are also becoming important driving forces for the development of the industry.
The first is AI empowerment. Those who like to play games should be able to feel that games are an industry that is blessed by this wave of AI. At present, a number of game companies have also disclosed the progress of AI research and development in semi-annual reports - for example, Perfect World said that the company has established an AI center to vigorously research and promote the learning and application of AI technology. At present, the company has applied AI technology to multiple links of the R&D pipeline, including intelligent NPC, intelligent game assistant, scene modeling, AI painting, AI plot, AI dubbing, etc., and developed new game development tools such as plot generation and big world generation for the needs of different types of game projects; In addition, Giant Network, 37 Interactive Entertainment, and Kunlun Wanwei have also disclosed the situation and progress of the combination of AI and products in their semi-annual reports. (Reference source: semi-annual reports of listed companies; Interface News, 2023.08.31;21 Economic Network, 2023.08.30; not recommended for individual stocks here)
(Image source: Perfect World Semi-Annual Report; Individual stock recommendations are not made here)
The second is the game "going to sea". Although affected by economic fluctuations and intensified industry competition, the environment for games to go overseas is facing challenges, but the top game companies still delivered a good overseas report card in the first half of the year. Taking Kunlun Wanwei as an example, the revenue scale of overseas business in the first half of the year reached 2.02 billion yuan, a year-on-year increase of 21%, and overseas business accounted for 83% of the total revenue, a further increase of 9 percentage points year-on-year. (Reference source: Kunlun Wanwei Semi-annual Report; Interface News, 2023.08.26;Central Broadcasting Network, 2023.08.25; not recommended for individual stocks here)
(Image source: Kunlun Wanwei Semi-annual Report; Individual stock recommendations are not made here)
From a comprehensive perspective, the normalization of version issuance shows that the policy side is significantly warming, the new product cycle has opened and continued to promote the improvement of industry prosperity, and AI empowerment and overseas have become an important driving force for the development of the game industry.
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