On October 28, a screenshot from the Internet showed that Wang Wei, CEO of Zhuohang Network, announced through an internal notice that he would “only develop moderate-to-light games” starting next year. And based on business changes, Zhuo Hang will also make certain adjustments in personnel, including the freezing of the year-end bonus and next year’s salary increase.
The internal letter explained that the reason for making such an adjustment was because of the “bad environment”, specifically, Zhuohang’s “revenue from old games declined, and the data of new games (AOD, IH) did not meet expectations”, which led to the start of revenue from August. support is not balanced. In addition, the promotion of new games has brought losses to a record high, so Wang Wei realized that ” if we continue to fight on the medium and heavy game track, we have no advantage.” First, the cycle is long and the investment is large, and the second is “the quality cannot compete with the first-tier coastal manufacturers.” ”, can only be overcome with pain.
Wang Wei’s words are very straightforward and serious. He didn’t use clever rhetoric to whitewash the reality. If he can’t beat the big factory, he can’t beat the big factory. If Zhuohang’s transformation happened in the first two years of the industry’s Great Leap Forward, some people might sigh conservatively, but at a time when market risks are much higher than profits, this may be the best way out for most game manufacturers.
Idle game pioneers, grow in the micro
Zhuohang Network is a veteran of the game industry. The company was founded in Chengdu as early as 2011.
At that time, the Chengdu High-tech Zone was not yet a blessed place for game makers. The title of “City of Thousand Travels” had not yet been launched, and even the curtain of the mobile game era was only half unveiled. At that time, Zhuohang mainly focused on the research and development of stand-alone mobile games. The biggest advantage was that he established the goal of taking overseas as the main market early.
Like many similar small manufacturers, Zhuohang, who had just started his career, just immersed himself in research and development, but after transforming into an online mobile game in 2014, Zhuohang began to develop and develop himself. Today, there are still 25 games in operation under the main account of Zhuohang publisher.
In December 2015, Zhuohang was listed on the New Third Board and disclosed that its revenue in 2013 and 2014 was 3.7 million and 3.76 million respectively. The progress bar reads 2015, and Zhuo Hang, as a game company, is still mediocre.
2016 became the moment that changed Zhuo Hang’s fate. In June of this year, “Idle Soldier” was born. Five months later, Zhuo Hang launched the iOS version. “Idle Soldiers” quickly allowed the domestic game circle and even overseas game companies to see what a real idle mobile game is.
At the beginning of 2017, “Idle Soldiers” estimated that the monthly turnover was only 5 million. At the end of the year, this number rapidly expanded to a height of 80 million monthly. Subsequently, this product, originally aimed at overseas markets, was launched in the domestic market in the second half of 2017. At the end of 2017, the monthly revenue of “Idle Soldiers” in the iOS country area had approached 10 million, and the game began to fully explode, breaking through 100 million months Running water frequently appears on various income lists.
At its peak in 2019, excluding domestic Android revenue, the estimated global monthly turnover of “Idle Soldier” exceeded 150 million, and the cumulative revenue so far is about 3 billion. In 2019, Zhuohang spent 62 million yuan to repurchase 7.47% of Zhuohang’s shares held by Zhongqingbao, and Zhongqingbao’s net profit attributable to its mother was only 58 million yuan that year.
In GameLook’s view, “Idle Soldiers” has completely changed the domestic channel’s discrimination against hanging/idling games as pure garbage, and has also made more game peers realize that idle games can also become high-quality games, and then idle games began to become a domestic market. Popular track.
GameLook still remembers that in early November 2017, Tencent held a global partner conference in Chengdu. During the conference, the two most talked about manufacturers among practitioners were Tap4Fun and Zhuohang, of which Tap4Fun happened to be in November during this conference. On the 7th, he encountered a “failure to pass” by the China Securities Regulatory Commission, which made his peers in the game circle regret. And because of the explosion of overseas results of “Idle Soldier”, Zhuo Hang can be said to be the most visited Chengdu company by the game company bosses who came to the conference at that time, and among them, Lilith who later became a shareholder of Zhuo Hang.
Looking back now, among a group of game makers who have broken the threshold of Zhuohang, Lilith is definitely not the one who came to the door empty-handed. At the end of December 2017, Lilith officially became a shareholder of Zhuohang and still holds 10.86% of Zhuohang’s shares. .
But what neither of them thought was that “Sword and Expedition”, which would become the new king of the idle category in the future, came from Lilith’s hands.
In April 2019, Lilith’s new work “AFK Arena” was the first to be launched overseas. Although it is a card, it is also placed. It is also sold overseas first and then resold in China. The difference is that the style and theme are different. The fusion depth is also different.
Therefore, “AFK Arena” and “Idle Soldiers” did not form much market competition in overseas markets at first, but when “AFK Arena” frequently brushed its face in the overseas revenue list and was about to land in the domestic market, in November 2019 The estimated revenue of “Idle Soldiers” is still 70 million in iOS only in the country. “Idle Soldiers” can be said to be the highest-earning mobile game in China in 2019.
However, in early January 2020, “AFK Arena” officially landed in the domestic market in the name of “Sword and Expedition”. Under the crazy measures of Lilith’s full-scale marketing and private marketing, there are rumors that “Sword and Expedition” will spend two weeks before the launch of the marketing fee. It is more than 200 million, and the advertisements are overwhelming. I have never seen the domestic game market with such a thunderous method, and it has also given “Sword and Expedition” a monthly return of more than 1 billion.
After that, manufacturers such as Sanqi, Youzu, Perfect, and Station B followed suit. The whole year of 2020 has become the year of “exploding” new games of various companies, and the marketing expenses of new games have soared rapidly. The main game flow of listed game companies has increased significantly, but the poor performance of net profit has laid the groundwork. “Yuan Shen”, which debuted at the end of September 2020, has brought the “big gamble” atmosphere of the entire game circle bosses to the extreme. It can be said that the outrageous performance of the two Shanghai game companies in 2020 has changed the views and practices of Chinese game companies on the future
While “Sword and Expedition” created Lilith’s new revenue record, the domestic card game and idle game market quickly appeared “choose one” in a short period of time. For example, “Honor of Kings” and “Peace Elite” rush to the sky-high DAU, which has a similar pumping effect on the domestic game market. “Sword and Expedition” has a similar pumping effect on the domestic card and placement category players.
“Sword and Expedition” sucked away the attention of the original card and placement game players. Similar to many card games that suffered a final decline in revenue due to the impact of “Sword and Expedition”, by May 2020, the income ratio of “Idle Adventure” in the country area will be reduced. It was down nearly 80% half a year ago.
In the future, Zhuo Hang has tried hard games many times to meet the challenges, but to this day, “Idle Soldiers” still accounts for about 40% of Zhuo Hang’s income.
Moderate to mild transformation, looking for development dividends again
GameLook holds a positive attitude towards Zhuo Hang’s transformation. In addition, Zhuo Hang’s most important new achievements in the past few years, except for “Idle Soldier”, are also from the medium and light track.
In 2019, a small game “Animal Restaurant” that became popular all over the Internet was born. It took only 4 months since the game was released, and the DAU of the whole platform exceeded 5 million. Nearly 80% of the users were female players. It took 33 days for the developer to earn more than 10 million yuan after sharing. Since then, “Animal Restaurant” has frequently appeared in the annual conferences of major domestic channels including WeChat, and it has been a great moment. The publisher of “Animal Restaurant” is Zhuohang, and its developer Chengdu Two Mile Technology Zhuohang also holds about 26% of the shares.
The person in charge of Zhuo Hang, who participated in the sharing of the conference that year, once said that Zhuo Hang has always had the idea of entering small games. He believed that the small game market was still in the early stage of development, the business model was relatively simple, and the quality of the games was also uneven. Therefore, If you pursue the idea of ”product is king”, you may be able to achieve certain results by customizing high-quality games that can fill the gap in the market.
Entering the game market in 2022, the importance of the medium-to-light track is becoming more and more prominent. This conclusion comes from GameLook’s long-term observation of the market.
Just two days ago, GameLook pointed out in the article that there are 5 “Chinese background” mobile games in the TOP free list in the United States, and these 5 products, without exception, are all adopting various methods to get close to the moderate and mild gamer group. Whether it is a casual game itself, or a casual game purchase as a side-play.
“Chinese origin” mobile games occupy half of the free list in the United States, which means that Chinese companies are actively exploring the potential of the moderate-to-light user group, and the moderate-to-light users are precisely the most cost-effective player group at the moment. Qun is the most important source of new user dividends for Chinese game companies’ global development in the next decade.
Statistics show that there are not many light game types in the TOP20 categories of global revenue. SLG, which can play the most serious games, can only rank third after the chess and card and match-3 game categories. In addition to the income list, more There are hyper-casual games monetized by IAA ads.
Looking forward to 2022, many overseas game companies have begun to develop projects to develop casual games with integrated gameplay. The fusion of match-3, fusion and merger, casual placement, and hyper-casual are hot spots.
This year’s largest domestic dark horse in the global market, “Bullets”, which currently has a monthly turnover of over 200 million, is also a moderate-to-mild game with mixed monetization.
Unlike the Chinese market, which is already a highly competitive stock market, the global market environment is more diverse, and it is an incremental market with a larger user base. At the same time, from a global perspective, due to the lack of attention, the iteration rate of light products in various markets has not been high, and there is still a broad market space to be explored.
Not only “Bullets”, but also the mobile game developer AppQuantum, which announced that it would withdraw from Russia not long ago, has increased its revenue by 92.5% in one month last year just by making medium and light games. After the first-month revenue of the representative work “Dragon Champions” exceeded one million US dollars, the recent monthly turnover of this year’s new work “Gold & Goblins” also achieved a 60% increase compared with the beginning of the year, and the company’s total revenue reached 450 million yuan.
Heavy products, 3A, and the development world are good, but not every game company is suitable. In the future, the global game industry is bound to continue to be layered. This is true for both R&D and distribution. All need to find a suitable category and track. Long-term pain is worse than short-term pain. As Zhuohang CEO Wang Wei said, the tuition fee that should be paid is always to pay. But you must stop your losses in time and find the right path again.