Source of this article: Times Finance Author: Gao Haoxiang
Image source: Photo by Times Finance
After such big hits as "Glory of Kings" and "Peace Elite", the outside world's expectations for Tencent games have been infinitely raised.
On the one hand, from a product point of view, whether it is the content-based game boom opened by "Genshin Impact" or the party game category excavated by "Egg Boy Pie", Tencent's follow-up speed seems to be less than market expectations. On the other hand, as popular games such as "Honor of Kings" and "Peace Elite" have gradually entered a mature period, the development of new products and new categories of Tencent games seems to be lacking.
But in fact, from the perspective of the product life cycle, Tencent Games may be underestimated. Recently, Golden Ten Data released the latest research and judgment report on Tencent games based on Tencent's latest financial report and data provided by a number of third-party research institutions.
According to the report, it is too high to expect Tencent to come out on top in every track. Every game company has its own areas of expertise, and even if it is as strong as Tencent, it does not have the ability to occupy all the tracks. Correspondingly, Tencent's backwardness in some emerging tracks should not be a proof of Tencent's backwardness in games.
However, if we look away from the phenomenal blockbuster and comprehensively examine the performance of existing games, future product reserves and investment layout, Tencent Games still maintains a clear leading position in the industry.
The game revenue surpassed NetEase by hundreds of billions
In the past year, NetEase has opened up new horizons with "Egg Boy Party" and "Against the Cold", and the company's market value once surpassed Meituan to become China's fourth largest Internet company.
But in fact, according to the Golden Ten data report, the gap between NetEase and Tencent's game revenue has been widened again. The report pointed out that excluding NetEase's related value-added service revenue (such as CC live broadcast, etc.), only counting game revenue, the difference between the two revenue in 2022 was 101.73 billion yuan, but in 2023, this revenue gap widened to 104.1 billion yuan.
Image source: Golden Ten Data
In the past year, Tencent's "Honor of Kings" and "Peace Elite" two head products have remained stable, and a number of new games launched in recent years have performed outstandingly, although they have not become phenomenal hits, but they also occupy a market position in their respective segments.
In its Q4 2023 financial report, Tencent summarized these games as "key popular games", judging them based on mobile games with an annual turnover of more than 4 billion yuan and an average daily active user of more than 5 million per quarter, and mobile games with daily active users of more than 2 million.
According to this, after combing Tencent's financial reports in the past year, Golden Ten Data found that 6 games were named and praised for their "outstanding performance", including "Valorant", "Ark of Destiny", "League of Legends Mobile Game", "Battle of the Golden Shovel", "Dark Zone Breakout", "Naruto", and believes that these 6 games should reach the threshold of Tencent's key popular games.
For example, "The Battle of the Golden Shovel", the game has entered the top 5 ranks in China in terms of daily activity and total game time, and is the biggest dark horse in Tencent's new games in recent years. According to QuestMobile's statistics, in the first quarter of this year, the daily active users of "Golden Shovel Battle" have approached 20 million, ranking third in Tencent Games, second only to "Honor of Kings" and "Peace Elite".
Another example is "Dark Zone Breakout", a hardcore shooter game with a year-on-year increase of more than 30% in total revenue and average DAU in the fourth quarter of 2023. According to QuestMobile data, the iOS revenue of "Dark Zone Breakout" increased by 104% year-on-year in the first quarter of this year, and the game will be launched on PC in the near future, and the user scale is expected to be further expanded.
Is Tencent Games underrated?
As the game industry gradually enters the stock stage, shifting from extensive development to refined operation, the importance of evergreen games that can operate for a long time is becoming increasingly prominent.
Image source: Golden Ten Data
At the end of 2023, Guojin Securities will be listed for more than 3 years, and the average ranking of iOS game best-selling games can be stable within 50 every year as the judging criterion, and the current situation of domestic evergreen games will be counted. Guojin Securities found that Tencent is significantly ahead of other domestic game companies with a 50% share, and 9 games on the list have been online for more than 5 years. In addition, among the 7 potential evergreen mobile games, Tencent also has 4 games selected, including "The Battle of the Golden Shovel", "Dark Zone Breakout", "League of Legends Mobile Game" and "Yuan Dream Star".
Evergreen Games can provide stable performance support for the company when there are no popular products in the short term, so that the company can have a longer period of preparation for new product development. From this perspective, the advantages of Tencent's multi-format derivative layout have been highlighted.
In addition, some Tencent game insiders pointed out to Times Finance that in addition to mobile games, Tencent's huge advantages in the terminal game market are often not taken seriously. Unlike mobile games, where many third-party organizations conduct statistical analysis of game flows, the recharge channels of terminal games are more fragmented, making it more difficult for the market to accurately evaluate them.
However, from some popular statistical lists, clues can still be seen, and Tencent's terminal game products are still among the best.
According to the Internet café game hot list released by Shunwang Technology, among the popular domestic terminal games in March 2024, "League of Legends" and "Crossfire" firmly occupy the top two positions. Last year's newly launched "Valorant", "Ark of Destiny" and "The Division 2" have also gained a stable user base.
Tencent's achievements in overseas markets through strategic investment and global distribution are also less mentioned.
From the data point of view, Tencent Games has been the global game publisher revenue champion for seven consecutive years since 2017, and at the global distribution level, it has promoted the global popularity of "Goddess of Victory: Nikki", and the global turnover of the game's mobile terminal has exceeded 3.8 billion yuan, and it is expected to enter the "$1 billion club" in 2024.
In the global high-day live games, Tencent still has many strong players in its hands. In the global mobile game DAU ranking in March 2024 according to data.ai statistics, 7 of the top 12 products belong to the "Tencent series".
After the hustle and bustle of the market, it is still those evergreen game products that can really support business development and provide value to players, which is also the trend of the game industry returning to long-termism.