Lead
| The most competitive year in the last decade |
Not long ago, the teahouse summarized and counted the overall operation of 84 listed (including the new third board) game manufacturers in 2023. On the whole, in 2023, the industry will focus on one that some people are happy and some are worried.
Sanqi Mutual Entertainment has been deeply involved in mini games, with revenue growth, and a large-scale single-quarter dividend plan;
Century Huatong relied on Diandian interaction, the proportion of overseas revenue skyrocketed, and returned to the 10 billion club;
There are also Zhongxu Future after the listing, the annual revenue fell by 26% year-on-year.
Under the 2023 financial report data of the manufacturers, the question arises: what is the game industry like?
It is difficult to have a uniform answer to this question.
Different entry points, different standards, the same question, there will be countless different answers.
"There are only two things to do in a modern business, one is marketing and the other is innovation"
Peter Drucker, known as the "father of modern management", has been regarded as a classic by entrepreneurs and scholars in various industries.
Thanks to the convenience of time, the latecomers can borrow the vision of their predecessors to see different worlds from a new perspective. This article will discuss the changes and conditions of the industry from these two events as a starting point, and from the disclosed sales and R&D data as the dimension.
First of all, it should be stated that due to the accounting standards of Hong Kong and U.S. stocks and A-shares, the scope of accounting subjects is different, in order to unify the dimensions of data and simplify the difficulty of data discussion, this article only discusses game companies in A-shares (including the New Third Board).
In addition, there is another one: the data comes from choice, and the financial report data of the past years is in the past tense; And the article only discusses data, not opinions.
01
2023 is the most difficult year for the industry
Previously, based on the annual report data, Teahouse counted the revenue of 84 listed companies in the game industry, as well as the revenue data of the game business. Among them, there are 23 A-share listed companies that meet the revenue of 100 million yuan at the same time, and the revenue of the game business accounts for more than 70%.
These 23 companies make up the sample of this time, and the specific list of companies, total revenue, and game business revenue can be found in the table below.
Before discussing the two things of "marketing" and "innovation" in modern business, let's answer the question: what kind of year is 2023?
From the perspective of revenue, in 2023, many game manufacturers in A-shares will have achieved good performance, and Sanqi Mutual Entertainment's revenue will reach 16.5 billion yuan, a record high; Century Huatong returned to the 10 billion club with overseas income.
This seems to be a far cry from the fundamentals of last year's report, when the market was miserable.
What is 2023 like for the gaming industry? Involution? How involuted is it?
Mr. Ma Jinghao, a well-known expert in the field of finance and accounting, has proposed a very interesting derivative index - "sales difficulty rate", which is used to judge the sales difficulty and competition degree of enterprises and industries as a whole.
The "Sales Difficulty Ratio" is calculated by "Gross Profit Margin - Selling Expenses Revenue Ratio". It can be simply understood as: the "net gross profit margin" of the enterprise after removing the "sales expenses".
Here, let's take a look at the market environment of the gaming industry in recent years. In order to facilitate reading comprehension and avoid textual awkwardness, in this article, the author dares to change the name of this derivative indicator to "sales ease" (unit: percentage).
For a certain enterprise, the larger the value of "ease of sales", the easier it is to sell products and the stronger the competitiveness of products;
For a certain industry, the larger the value of "ease of sales", the easier it is for enterprises to sell goods, and the more relaxed the market competition.
Judging from the data of 23 A-share game companies, in the past ten years (2013 to 2023), the sales ease of the game industry has experienced a market from rising to falling as a whole.
In 2013, the sales ease of game manufacturers was 38.5, and in 2017, it rose to a peak of 50.66, and then started a downward trend. In 2023, the ease of selling has dropped further to 34.17. This is also the lowest value of this derivative indicator in the measured data.
It can be said that in 2023, the game industry has entered the most difficult year and the most competitive year in the past decade.
Under the high intensity of competition, the two things of "marketing" and "innovation" of enterprises have a deeper meaning. whether to exchange the market at a price, continue to expand, or appropriately shrink and throttle; Whether to continue to explore the 50% that is not lacking, or whether the strong man breaks his wrist and guards the existing plate first.
02
Selling expenses are at an all-time high
Judging from the data of previous years, the total sales expenses of game manufacturers have increased year by year, reaching a record high. Last year, the total sales expenses of 23 game manufacturers reached 22.431 billion yuan, a year-on-year increase of 13%.
From the trend point of view, in 2023, among the sample companies, 11 companies will have a year-on-year increase in sales expenses, and 12 companies will have a year-on-year decrease in sales expenses. The year-on-year increase and decrease basically accounted for half.
Among them, the top three year-on-year growth in sales expenses were Giant Network, Dasheng Culture and Mingchen Health, which increased by 186.45%, 130.69% and 107.03% year-on-year respectively. R&D expenses of the three companies doubled year-on-year.
Giant Network mainly has two product lines, the "Journey" series and the "Ball Battle", and the increase in sales expenses in 2023 is mainly due to the increase in advertising expenses.
The main body of Dasheng Cultural Game business is Taole Network, and its main products are "The Story of the Peach Blossom Spring", "The Story of the Peach Blossom Land 2", "The Legend of the Fairy Spirit" and so on. In 2023, Taole Network will launch a new mobile game product "The Legend of the Young Fairy". The launch of new games has pushed up its advertising costs.
The games developed and marketed by Mingchen Health include "Kingdom of Kings", "Hundred Dragons", "Town Soul Street: Born to be King", "Battle of Sand City", "Anchor Arrival" and so on. Mingchen was healthy, and the increase in sales expenses was mainly due to the rapid development of the game publishing business and the increase in distribution expenses.
If you look at the amount of growth, in 2023, the top five sales expenses will be Century Huatong (up 1.08 billion yuan), Giant Network (up 664 million yuan), Glacier Network (up 393 million yuan), Kaiying Network (up 373 million yuan), Sanqi Mutual Entertainment (350 million yuan), and Mingchen Health (344 million yuan).
However, as mentioned earlier, the increase in selling expenses may also be a price-for-volume increase, which does not necessarily mean that the competitiveness of the product in the market has increased year-on-year.
In 2023, among the 23 game manufacturers, 13 manufacturers such as Century Huatong, Shenzhou Taiyue, Kaiying Network, Glacier Network, and Mingchen Health will increase their sales easily.
Among them, there are five manufacturers that meet the two indicators of sales expenses and sales ease at the same time, and both have positive growth, namely Shenzhou Taiyue, Glacier Network, Kaiying Network, Century Huatong, ST Dinglong, and Mingchen Health.
03
R&D expenses decreased by 4.12%
In terms of R&D, on the whole, in 2023, the R&D expenses of 23 game manufacturers will total 9.348 billion yuan, a decrease of 402 million yuan from 2022, a year-on-year decrease of 4.12%.
Compared with 2022, the total amount of R&D expenditure data has not changed much.
In terms of the year-on-year trend of manufacturers, R&D expenses increased year-on-year, and the manufacturers that decreased basically accounted for half.
Among them, in the growth, the top five changes are: Caesar Culture (88%), Pixel Software (82.98%), Glacier Network (40.79%), Yongshi Network (27.37%), and Tom Cat (22.34%).
This is mainly related to the number of its own products under research and progress. Taking Glacier Network as an example, Glacier Network will invest as many as 10 products in R&D in 2023, including "Twilight Fantasy", "Beanie Fighting Zombies", "Codename Q", "Big World", etc., of which 4 are already in the testing stage and meet the requirements of various indicators for product launch.
In addition to the factors of its own product R&D strategy, it also has its own R&D expense base that is not high, resulting in a greater impact on the change ratio.
For example, in 2022, the R&D expenses of Caesar Culture, Pixel Software, and Yongshi Network will only be 100 million yuan, 49.6085 million yuan, and 95.2174 million yuan respectively. As a comparison, Sanqi Mutual Entertainment's R&D expenses in 2022 will be as high as 905 million yuan.
The game industry is a content industry, a creative industry, and the importance of R&D is self-evident.
In the simple concept, growth is good, and decrease is bad. If you look at it with a simple concept, then the year-on-year change in R&D expenses can be called "good and bad, mixed with joy and sorrow".
However, unlike this, the change in the number of R&D personnel may be a little pessimistic.
04
1,363 fewer R&D personnel a year,
Only 5 manufacturers have increased the number of R&D personnel
In terms of the number of R&D personnel, judging from the statistical sample, 2023 can be said to be chilling.
Judging from the annual total data, the number of R&D personnel of 23 game manufacturers has dropped from 19,500 in 2021 to 16,900 in 2023. In 2023, the number of R&D personnel in the sample as a whole decreased by 1,363 year-on-year.
In 2023, most game manufacturers choose to reduce costs and increase efficiency, and optimize their internal structure. Among the 23 A-share listed companies, 18 manufacturers saw a year-on-year decline in the number of R&D personnel, and only 5 had a year-on-year increase in the number of R&D personnel.
In terms of manufacturers, the top six R&D personnel with the largest year-on-year decline in the number of R&D personnel in 2023 are: Youzu Network, Electric Soul Network, Perfect World, Mingchen Health, Sanqi Mutual Entertainment, and Palm Fun Technology.
In terms of reasons, judging from the annual report, the number of R&D personnel decreased year-on-year, mostly related to the company's optimization of internal structure and streamlining projects.
Taking Youzu Network as an example, in 2023, Youzu Network will adjust its organizational structure around the principles of "integration of research and operation" and "independent operation" to "improve the research and operation capabilities and efficiency of self-developed products".
According to surging news reports, last year, Youzu Network carried out personnel reduction and optimization, involving 200 people, mainly fresh graduates and employees who have not passed the probationary period, and the projects involved in the layoffs include "Crimson God Covenant" and "Game of Thrones: Winter is Coming".
However, even under the high competition in the market, in addition to reducing costs and increasing efficiency, some manufacturers have given different ideas to solve the problem.
In 2023, when the market competition is the highest, only 5 of the 23 manufacturers have chosen to increase staffing, increase R&D, and explore new opportunities.
Among these five manufacturers, the number of Gigabit R&D personnel increased the most, with a year-on-year increase of 163 people. They were followed by Kaiying Network (an increase of 146 people), Shenzhou Taiyue (an increase of 30 people), Caesar Culture (an increase of 30 people), and Palm Tour of the World (an increase of 4 people).
Among these 5 manufacturers, in terms of the number of product reserves, Gigabit has 4 self-developed products and 5 agent products; The four self-developed products are: the immortal-themed placement and development game "M72 (codename)", the two-dimensional placement MMO mobile game "The Legend of the Cane and Sword (codename M88)", the strategy tower defense game "The Strongest Castle", and the idle Western fantasy-themed game "Codename M11".
Shenzhou Taiyue, on the other hand, has two SLG fusion games, the sci-fi theme "Codename DL" and the civilization-themed "Codename LOA", which are expected to be the first to be released overseas in 2024.
Caesar Culture has a total of 6 reserve products, namely "Soul Street: Dawn", "Covering the World", "Saint Seiya: Rebirth 2", "Death (tentative name)", "All-Star Awakening", "Ultraman (codename: Light)".