It's the winter solstice, and the cold is spreading to the game industry. A blockbuster news caused an uproar in the market.
In the newly released "Measures for the Administration of Online Games (Draft for Solicitation of Comments)" (hereinafter referred to as the "Draft") issued by the National Press and Publication Administration, further adjustments have been made to the operation of online games.
Among them, online games are not allowed to set up inducing rewards such as daily login, first recharge, and continuous recharge;It is not allowed to provide or condone the trading of virtual props in the form of speculation, auctions, etc.;All online games must set user recharge limits, etc.
Although on the surface, once the Draft is implemented, it will have a lot of impact on the business models of various companies, in the eyes of industry insiders, the market reaction is too drastic. Many practitioners exclaimed, "It's too terrifying, isn't it?"”
In fact, on the afternoon of December 22, the secondary market did experience a thrilling day.
As of December 22**, both the A-share and Hong Kong game sectors have ushered in sharp declines. Among them, many stocks such as Caesar Culture, Youzu Network, Giant Network, and Sanqi Mutual Entertainment fell to the limit, and many stocks such as Glacier Network, Palm Fun Technology, and Baotong Technology fell by more than 10%. In terms of net outflow of A-share funds, the net outflow of the three sectors of culture and media, Internet services, and games ranked high, with 580.3 billion yuan, 39700 million yuan and 2.8 billion yuan.
Figure: Tencent Selector.
Several major game manufacturers in Hong Kong stocks also began to fall in intraday trading, with NetEase and Tencent both falling to new lows in recent times. Among them, NetEase fell the most, falling 28% intraday, with a price of HK$122 per share, a decline of 246%, leaving the throne of the fourth largest factory that has not yet sat on the heat;Tencent's ** price was HK$274 per share, a drop of 1235%。
Figure: Tencent Selector.
Among the camps that led the decline today, Tencent and NetEase were the most ferocious, with a total market value of more than 400 billion yuan in a single day, essentially because they are the absolute leaders in the game market. At present, in the global market, Tencent, NetEase, Activision Blizzard, Playrix, and miHoYo jointly rank among the top five game companies in terms of revenue in 2023. In addition, according to the statistics of Sensor Tower, Tencent occupies a fault advantage, and the annual mobile game revenue is close to the sum of the second to fourth places.
In addition, the proportion of game business revenue in Tencent's total revenue has dropped to about 30%, while NetEase's game revenue accounts for about 70% of total revenue. That's why the market reaction to the latter has been even more intense.
The reason why a draft for comments can cause such a violent response is that it directly points to the two key business keys of game manufacturers, one is user retention, and the other is recharge flow. Previously, many game manufacturers followed the idea of "three points of R&D and seven points of operation", and have always regarded buying volume as the core business method to attract new customers, which also highlights the "simple and crude" operation of the game industry in the past.
Specific to the details of the Draft, most in the industry believe that "the version number will be valid for one year after issuance" and "restricting the excessive use and high consumption of games" may have a greater impact on the game industry.
On the one hand, leading companies in the industry, such as Tencent and NetEase, have the habit of hoarding version numbers due to the large number of games released every year. On the other hand, restricting the "daily login", "first recharge" and "continuous recharge and other inducing rewards" involved in the overuse of games is a common method used in the game industry to attract new users and promote activation.
Among them, the more lethal are those game products that rely heavily on head recharge users in terms of turnover, and even set up recharge lists in the game, "Some very few games actually rely on some big money owners to maintain the server", a heavy gamer said.
A person in the game industry believes that this will make game products that rely on inducing recharge directly withdraw from the market, "People who play tricks will definitely leave the industry." ”
Tencent and NetEase are not in this category, Tencent's popular key games, such as the currently popular "Glory of Kings" and "Peace Elite", NetEase's "Egg Boy Party", are all characterized by big DAUs, and recharge has little impact on the game balance itself, and will not rely too heavily on the head krypton players.
Zhang Wei, vice president of Tencent Games, also said in response to the city that the draft of the new management measures does not fundamentally change the key elements such as the reasonable business model and operation rhythm of games. The new version of the management measures released by the regulatory authorities this time clarifies the support attitude for the industry, especially in the encouragement of high-quality original games. Tencent Games will continue to adhere to the high-quality strategy of technological innovation and culture, and with the support of the competent authorities, it will practice the high-quality development of China's game industry.
According to The Paper, XD said that its self-developed products have always adhered to the R&D orientation of differentiated high-quality products, and never relied on strong operational methods such as first charge rebates and daily check-ins.
Personally, I don't think it's so pessimistic, but the market reaction is normal, and the game industry has been like a frightened bird in recent years, and any wind blowing the grass will cause a huge earthquake. A game industry practitioner told City Boundary.
When it comes to the overly extensive business model of the game industry in the early years, the most classic case is the legendary game "Blue Moon". Under the rough buying volume, the advertising slogan "If you are a brother, come and cut me" once became a hot stalk on the Internet, and it also directly led to the successful listing of Zhongxu Future, the parent company of "Greedy Blue Moon", this year.
However, according to its financial report, its simple buying logic has always run through it, and from 2020 to 2022, Zhongxu's future marketing expenses are 16400 million yuan, 37400 million yuan, 54400 million yuan, accounting for revenue. 2% and 617%。The lack of self-research and heavy reliance on buying volume and "krypton gold bosses" also made Zhongxu's future listing broken.
Many people in the game industry believe that judging from the draft, the impact of "limiting user recharge limits" is the greatest, but the user group and specific amount have not yet been refined, and there is still a lot of room for operation.
Once the height limit is implemented, it will indeed have a certain impact on the revenue of game companies that are free of charge and paid for props", Zhang Shule, an analyst in the game industry, analyzed the city, "but this impact will not be too lasting, especially for games with a large number of users, which can promote more free users to become paid users through strategies such as price reduction of game props, thus forming a long-tail effect." ”
A number of people in the game industry also told the city that the draft will not have too much impact on mainstream boutique games, and the draft essentially wants to allow game practitioners to dig content and depth, so that the entire industry will develop more and more benignly. If the draft is subsequently implemented, it means that relying on traditional marketing methods to retain users will be a thing of the past.
In fact, the gaming industry has been adjusting for a long time. Since September 2021, the pace of edition issuance has slowed down, and the flow of new products to the market has slowed down. At that time, the voice of the trend of "high-quality" intensified.
According to the data of the "China Game Industry Report", the actual sales revenue of China's game market in 2022 will be 26588.4 billion yuan, a year-on-year decrease of 3062.9 billion yuan, down 1033%；Game user scale 66.4 billion people, a year-on-year decrease of 033%。
Ma Huateng once bluntly said in an internal employee speech at the end of 2022 that in the long run, the version number of the domestic game market will definitely be tightened. He said that Tencent Games must focus on high-quality products and "don't waste any opportunity for a version number."
Ding Lei also expressed a similar view at the 2022 Q3 financial report analyst meeting, "As we all know, NetEase has not obtained a domestic game version number in the past year, which makes us focus more on expanding overseas markets on the one hand, and on the other hand, give us a warning to cherish the domestic market and develop high-quality games." ”
The growth of the industry is facing torture, high-quality products have become a consensus, and going overseas has become the standard. The above-mentioned industry insiders believe that it is precisely in the context of such changes and adjustments that the market has reacted so fiercely.
But in any case, small and medium-sized companies will definitely face challenges", and the boutique strategy also means more cost and creative pay, and for those small and medium-sized companies that are difficult to achieve, the final situation may be to leave.
Even the giants are also carefully considering the investment in the game track, a few days ago, ByteDance announced the reduction and adjustment of its game business, such as the light year, etc., previously, it had invested heavily in the game business for six consecutive years.
According to the city, many game manufacturers, including Perfect World, Lilith, and Youzu, are counting and adjusting personnel, and as early as the end of 2022, manufacturers such as Papergames and miHoYo have also laid off personnel for individual projects.
For the gaming industry, change may have become the norm, but it's not without good news.
On the same day on December 22, the National Press and Publication Administration announced a new batch of imported game versions, and 40 games were approved. These include Perfect World's "One Punch Man: World", Gigabit's Thunder Network's "Candle Dungeon 2", Zhongqingbao's "Monster Train", and Kaiying Network's "About My Reincarnation as a Slime: New World" and so on. It also released a hint of good news to the panic of the day.
The gaming industry is almost back to normal, the boom has passed, and the only thing left is to work hard," said an employee of a medium-sized game manufacturer.
Author |Zhang Jikang, Zhao Zikun.
Edit |Dong Yuqing.
Operations |Xie Yifan.