In addition to Tencent and NetEase, new game players are joining forces to resist. Gaming is the core business of Station B, and there is a growing gaming community TapTap. What kind of chemical reaction will they create?

Editor’s note: This article is from the micro-channel public number “all-weather technology” (ID: iawtmt), Author: Man Fei Xu, Editor: peace of mind.

On April 1, Bilibili announced a strategic investment of approximately HK$960 million in Xindong. The two parties will carry out a series of in-depth cooperation around Xindong’s games and tapap.

According to the agreement, Station B will subscribe for 22,660,000 ordinary shares issued by Xindong Company at a price of HK$42.38 per share, with a total subscription price of approximately HK$960 million. After the transaction is completed, Station B will hold approximately 4.72% of Xindong’s equity.

This is the first large sum of money invested in the game at station B this year. According to the previous compilation of All Weather Technology, Station B has invested in more than 20 game companies, of which in 2021 alone, it invested in Lost, Dongji Six Senses, Palm Technology, Sky Box and other game companies. These investments may be helpful to supplement the self-operating capacity of Station B.

Alibaba is also the one who stretched out his hand to the heart. Alibaba Group placed 3.658 million shares and will hold 0.76% of the issued shares of Xindong after the placement.

Overall, after the transaction, Xindong’s founder Huang Yimeng will hold 33.24% of the company’s shares, Dai Yunjie’s 14.06%, Shen Sheng’s 2.43%, B Station’s 4.72%, and Alibaba’s shares. It is 0.76%. Affected by this news, Xindong’s share price increased. As of the close of the morning of April 1, the stock price closed at HK$55.3, an increase of 17.66% from the previous trading day.

What are the calculations made by station B and Ali?

The most interesting thing about this investment is what impact will this have on the future strategic layout of Station B and Alibaba?

To add a background, the domestic game market is surrounded by many winners such as Tencent, NetEase, Mihayou, Eagle Corner, etc., and the production threshold has been increasing. Under each vertical category, there is an unbreakable giant firmly occupied, which means that small and medium-sized players are difficult to break through, especially without capital support, it will be difficult to keep up with the fierce competition in the industry. Rhythm.

At this time, Station B and Ali will stretch out their tentacles, or take a fancy to the company’s most important asset-the well-known game sharing community TapTap. Station B admits, It is expected that after the B station becomes a shareholder, the two parties will carry out a series of in-depth cooperation around Xindong.com’s games and TapTap.

The game business has always been the “cash cow” of station B’s revenue. According to the 2020 Quarterly Report recently released by Station B, the company’s game business revenue is 1.13 billion yuan, accounting for 29% of overall revenue. Prior to this, games had long occupied the position of the first business at station B, contributing more than 50% of revenue at one time.

However, due to the rapid revenue growth of the game, the self-research ability of the B station game has been criticized by the outside world. The launches include “Shendai Menghua Tan”, “Sound Spirit”, “Yoriuyuu Bizarre Incident Book” and “Unheard-Mystery Chasing Voice” In many self-developed games, there has never been a big splash.

Also, Ali games have not improved for a long time in self-research. In addition to acting for “Traveling Frog”, Ali finally developed the blockbuster game “Three Kingdoms: Strategy Edition” in 2019. The game team is led by former NetEase COO Zhan Zhonghui, and the current monthly turnover of “Three Kingdoms” has reached 300-400 million yuan.

However, even though the head product has already appeared, it is still difficult to change the status quo of the entire entertainment industry that needs to serve Ali’s other businesses. For Ali Games, the road ahead is still long and difficult.

At the same time, Station B insisted on attacking on the game platform, and relying on game intermodal transportation and agency, won “half of the revenue”. It is worth noting that the blockbuster game “Yuan Shen” of the B station intermodal, whose production Fang Mi Ha You is in the domestic Android market, also chose B station and TapTap as partners.

It is foreseeable that there will be channel supplementation between Station B and TapTap. In the future, both parties will receive more support from each other in self-research and agency works, thereby reducing marketing costs and improving operation promotion and self-research Aspect ability.

The growing heartbeat

It is hard to imagine that Xindong is a company with more than ten years of development history.

Xindong company was established in 2002 and owns many self-developed and agency games such as “Ragnarok RO”, “Endless Ullara”, “Sausage Party”, “Muse Dash”, “Human Falling Dreamland” and other well-known game sharing communities. TapTap.

Known as the “Douban” in the game industry, TapTap’s scoring system is well-known among many game enthusiasts.

In the to B field, unlike the traditional channel intermodal transportation sharing model, TapTap has always adhered to the zero-sharing model and has become a unique channel for the domestic Android market, attracting many developers to cooperate with it. Previously, a variety of mobile games such as “The Strongest Snail”, “Hundred Scenes of the South of the Yangtze River”, “Awakening of the Worlds”, and “The Original God” that have been popular on the entire network have avoided mainstream Android app stores and chose to cooperate with TapTap.

After a long period of silence, in the middle of last year, Xingdong became a star company in the secondary market and once again ushered in a star company at the beginning of this year.The round skyrocketed. Since its listing on the Hong Kong Stock Exchange at the end of 2019, Xindong’s share price has risen by more than 660%, and its market value has reached 43 billion yuan, becoming a dark horse on the game track.

At the same time, the heartbeat is growing and expanding rapidly. According to Xindong’s 2020 financial report, the company’s total number of R&D personnel increased from 806 to 1355 that year, resulting in a year-on-year increase of more than 300 million yuan in R&D investment, an increase of nearly 110%, which affected the company’s net profit to a certain extent.

The amount of funds raised by the company this time reached 420 million US dollars, including 280 million US dollars of 5-year convertible bonds, and about 1.115 billion Hong Kong dollars (approximately 140 million US dollars) of new shares placement. Of this fund, about 53% will be used for research and development, 24% for marketing and promotion, 6% for potential acquisitions and strategic investments, and 17% for supplementary working capital.

Xindong said that this placement aims to strengthen the company’s financial position and provide long-term funding for the company’s expansion and growth plans. “The intended use of the proceeds from the placement is consistent with the company’s strategic focus, that is, to enhance game development capabilities, further enrich the game portfolio and increase the active user base.”