More moves can hold the basic set.
Editor’s note: This article from the micro-channel public number “letter list” (ID: wujicaijing), of: Takeaki containing.
On April 8, Reuters reported that Bilibili (hereinafter referred to as “Station B”) was negotiating to purchase a 24% stake in game developer Youzu Networks as part of a transaction worth nearly 5 billion yuan. Subsequently, station B responded that “the news does not match the facts”.
Although Station B denied it, the news came out after the acquisition of shares in Xindong. At least it shows that in the outside world, Station B has joined Tencent, NetEase, Alibaba, and Byte, and has become a big buy in the game market. One of the homes.
On the day of listing in Hong Kong (March 29), in response to a reporter’s question on “Why the proportion of game revenue is decreasing year by year”, Chen Rui, chairman of Station B, said, “The reason for the diminishing revenue of games is that other revenues have grown rapidly “.
In the past three years, the outside world’s perception of the game at Station B has undergone tremendous changes. In 2018, when Station B was listed on NASDAQ, many investors believed that Station B was too dependent on games, and many people even defined Station B as a “game company.”
As a result, Station B launched the strategy of “getting rid of game dependence”. In the conference call after the third quarter of that year’s earnings report, Chen Rui said, “I think games will still be a very important part of us, but Live broadcast, including advertising, peripheral sales, these models will be very fast.”
Since then, the revenue share of station B games has decreased year by year. In the fourth quarter of 2020, revenue from the game business at Station B was RMB 1.13 billion, a year-on-year increase of 30%. For the whole year of last year, the total revenue of this part of the business was approximately RMB 4.8 billion, accounting for about 40% of the total revenue for the year. In the past three years, the proportion of game business to the total revenue of station B was 71.1%, 53.1% and 40.0%, respectively.
The paradox is that a large number of overseas analysts are very optimistic about the game business of Station B, believing that the game business is the main pillar of Station B’s steady profit over the years.
In the past three years, the ceiling of the gaming industry has continued to be raised, and content platforms have begun to bet on games frantically-according to data from TianyanIn the first quarter of 2021, there will be more than 200 investment events in the gaming industry. Content platforms such as Tencent and ByteDance have paid unprecedented attention to games. “Everyone found that after doing so many things, the game is still the game to make money, or the game is stable.” Jingwei China Vice President Zhuang Minghao said in the live broadcast.
Since this year, the enclosure movement in the game industry has intensified. In addition to the recent acquisition by Byte of Mutong and Tencent’s investment in “Game Science”, the developer of “Black Myth: Wukong”, which caused a sensation in the industry, big game companies are also accelerating their layout. Among the buyers of the Youzu, in addition to Station B, there is Changyou. “However, since Lynch’s death, the Youzu has been reported to be sold every week, and the specific buyer has to wait for the boots to land.”
Station B, which is questioned about the decline in game business, is also accelerating the layout of the game business and investing heavily in game companies. According to the Tianyancha APP, out of the five recent investment trends at station B, three are related to games.
On the third day after returning to Hong Kong to list, Station B announced that it would subscribe for Xindong Company’s new shares worth 960 million yuan at a price of HK$42.38, accounting for 4.72% of its total market value.
This is a very good price. “This period is the relative low period of Xindong’s stock price after its listing (Xingdong’s stock price once rose to 114.5 Hong Kong dollars), which is more suitable for buying. Station B has a low proportion of investment in Xindong, and the probability of financial investment is higher by visual inspection. Co-founder Zheng Jintiao analyzed the letter list (ID: wujicaijing).
Game analyst Miaoyu defines this investment at Station B as “making friends”, “The most valuable business in my heart is the game community taptap. It is not only a competitive product with Station B, but it can also be used for Station B to a certain extent. It is to supplement, but because the investment share is too low, the interaction between the two will not be too strong, so it is more like a behavior of’making friends’.”
“Another signal is whether the game at Station B should return to the center of the stage.” According to Wu Hao, an investor who has been paying attention to the content industry for a long time, in the past three years, neither investors nor Station B wanted the game business. Standing in the center of the stage, “But the industry has changed, and the competition among the leading companies in the game industry has become an arms race. If you blindly reduce the proportion of games, you will miss a lot.”
The attention of the outside world to the games at Station B has increased significantly compared to a few years ago. On March 30, Jingwei China Vice President Zhuang Minghao, Chen Hai Capital partner Chen Yuetian, Gao De Chuangfu partner Jin Yechen and technology review author Pan Lu conducted a live broadcast on the video account to discuss “How Station B will make money in the future”. There has been a lot of time discussing the B station game.
Three years ago, Zhang Yiming set a flag to make a game, so Bytedance started investment and acquisition regardless of cost. Nowadays, Station B is also facing the same situation, “Whether the game should return to the C position of the business, whether to do self-research regardless of cost, station B must make a choice.”
Shortly after meeting Xu Yi, the founder of Station B, Chen Rui asked Xu Yi, “What is the future of Station B?” Xu Yi replied: At least as big as Shanda, because it has commercial value.
At that time, the B station had not yet launched the game business. Xu Yi compared the B station with Shanda because of scale considerations. However, in the later development, the game has indeed become the pillar of the B station.
In 2013, when the little-known tail studio Mihayou was testing the channel conversion rate of “Benghuai Xueyuan 2”, he accidentally discovered that the feedback effect of station B far exceeded the traditional channel 91 mobile assistant. Mihayou, who was trapped in a deadlock in the negotiations with the first-line channel dealers, hit the B station instantly. From this, Station B also discovered its own advantages in the two-dimensional game, tasted the “sweetness” brought by the game business, and later the game business became the “cash cow” of Station B.
Compared with traditional game distribution channels, B station has a great advantage in the channel of two-dimensional games. In 2014, Mihayou CEO Cai Haoyu revealed in a speech: “Station B accounts for more than 50% of our Android revenue. The core users of station B can almost cover 60%-70% of Android core users. Other Android markets are 3 to 4 times higher.”
In 2016, Station B, which obtained the exclusive agency rights of the Japanese mobile game “Fate/Grand Order” (“FGO” for short), really showed its strength in game distribution. In the iOS best-selling list that year, “FGO” once surpassed the glory of the king. Some people believe that it was the early agent game “FGO” at station B that allowed it to make a rapid breakthrough in the early commercialization period and successfully listed in 2018. The prospectus at the time showed that the game revenue in 2017 exceeded 2 billion. , Accounting for 83.4% of total revenue, and only one game “FGO” contributed 72% of revenue.
Wu Hao believes that “FGO” and Station B are mutual achievements. When Station B needed to improve its commercialization capabilities, it found a game product that was in line with its own community’s tune, and its revenue was enough to support its listing. “The developer of “FGO” is affiliated with Sony Music, and the explosion of this game has also significantly improved the position of the game department in Sony. Later, Sony’s shareholding in Station B was also inextricably linked to the exclusive agency of this game. .”
The third anniversary event of “FGO” in Shanghai
After “FGO” completed its historical mission, investors began to worry about whether a second “FGO” could be found at Station B. The current reality shows that this concern is not unfounded: long-term occupation of the Japanese marketThe best-selling “Azur Lane”, after the national service went online, suffered a dissatisfaction; according to Qimai data, CEO Chen Rui personally appeared in the advertising support of “Princess Link”, the national service in the App Store game best-selling list ranking The overall trend is in a downward trend.
In July 2020, Station B released 11 games such as “Gem Fantasy: Reappearance of Light”, “Kuroshio: Deep Sea Awakening”, and “Dream of Light”, which were released and sole agency in one breath, but none of them could Copy the brilliance of “FGO”.
“The biggest advantage of station B in game publishing is that it can get Japanese games that others can’t get, but this is also easy to form path dependence.” Wu Hao explained that station B takes Japanese animation, game IP and copyright. There are very obvious advantages. Past experience has also proved that the Japanese game publishing at station B is very strong, but the marginal effect of this ability has begun to diminish.
B is not without pain points in terms of channels. Take Mihayou’s “Yuanshen” as an example. Station B was the only channel server when it was first released. “Yuanshen” was the first game to realize data interoperability between mobile phones, consoles, and PCs. Station B was here. A channel server and official server data are not connected, so many people give up the B station channel server.
The game business at Station B has gradually become embarrassing. Chen Yuetian, a partner of Chenhai Capital, commented in the live broadcast: “Shanghai’s game companies are very strong, and self-developed game companies are difficult to play. It is necessary to increase traffic, or directly issue to self-research, but self-research is difficult to do.”
In recent years, an obvious change in the game industry is the constant conflict between the product side and the channel side.
Foreign countries, Epic Games and Apple fought in court to oppose “Apple tax”. There are more and more incidents of this kind in China. The 50-50 split adopted by the Android channel is the norm, and Tencent and Huawei are delisted when discussing the split. Game companies such as Mihayou and Lilith bypassed the traditional Android mobile app store distribution channels, and Xiaomi made a compromise with “Yuan Shen”.
“In the game industry today, is the product king or the channel king?” Wu Hao said, “Obviously the voice of products is getting bigger and bigger, and the entire industry is beginning to strengthen research and transportation.”
The rise of independent game companies and the scarcity of high-quality games have weakened the original strong voice of game publishers, including industry hegemon Tencent. Owning channels is no longer an absolute guarantee of success-“Yuan Shen” bypassed Tencent, the strongest domestic distribution system, and still achieved the second highest revenue in the world. Jin Yechen said in the live broadcast, “When the distribution capacity weakens, its control over the market is weakened to a certain extent.”
Either Tencent or Station B has been affected in this change. Zhuang Minghao mentioned in the live broadcast that the absolute advantage of B station in the two-dimensional field has gradually become less obvious. In the past year, station B has gradually failed to sign the top product as a distributor, “the most powerful Of products only use the publisher as the advertiser and channel partyUp. “
“Station B began to publish two-dimensional games very early, and basically became the largest publisher of two-dimensional games. However, with the entry of two-dimensional game manufacturers with strong products like Mihayou, the advantages of station B No longer significant, the most obvious advantage is only that they can get Japanese products that others can’t.” Miaoyu analyzed.
After Tencent felt the channel change, it opened the road of crazy investment, and it also drove the investment boom in the entire game industry. Jin Yechen summed up Tencent’s behavior as “I have so much money, why don’t I make friends with him”, “The next generation of “Yuan Shen” comes out. At any rate, Tencent is an investment company, and at the worst, I have to have something to do with this company. , I can’t accept that this company has nothing to do with me.”
Investing in game companies has also become an important means for station B to accelerate the layout of the game industry chain. In the past eleven years, the number of game companies invested by Station B has reached 24. “Station B has not only recently started to invest in game companies, but when the market changes, the action must be greater to hold the basics.” Wu Hao analyzed.
According to incomplete statistics, only from 2020 until now, B station has invested in Palmai Technology and Access! 11 game production companies, including Sand of Time, Cat Day, Guangyan Network, Shadow Moon, and Qianyue Network.
According to the “China Game Industry Report 2020”, the actual sales revenue of the Chinese game market is 278.687 billion yuan. “In the market, the revenue of station B is not high. Investing in companies, signing top products, and station B I have been adhering to my strategy, but the challenge is still great.” Zhuang Minghao said, “B stood in the game field and was forced to be involved in a more advanced state of war.”
It is necessary to do self-study, which is the suggestion of all practitioners for the game of Station B. “The main product is gradually entering the end of life. In the future, except for overseas, the domestic business retention rate of the agency issuance is actually very low. However, there is a high probability that manufacturers who can survive now will not hand over the issuance to anyone, so they transfer to self-research. It is necessary.” Jin Yechen concluded.
“At the beginning, investors were worried about the high proportion of games at station B. The life cycle of a game was too short. However, the ceiling of domestic games has been raised again and again. At the same time, due to the restrictions on the game version number, the players With the pursuit of game quality, the life cycle of a product is constantly lengthening.” Wu Hao took the products “Glory of the King” and “Peace Elite” five or six years ago as examples. “As long as the product is powerful enough, you can stay on the list for five years. Six years.”
Wu Hao said that Tencent’s annual financial report will emphasize the status of products such as “Glory of the King” and “Peace Elite”. “Tencent is actually emphasizing that it is a game company at any time. With the rapid development of the industry, Station B has become a game again. Why can’t the company?” He believes that what Station B has to do now is to make a “self” high-quality product.
In fact, in the second year of “FGO” solo solo, station B was alreadyBeing prepared for danger in times of peace, started the road of self-developed independent games. Zhang Feng, the vice president of game business at Station B, also said publicly: “From the perspective of revenue security and IP controllability, self-research must be done, but we will control a ratio very well and will not cooperate with partners. There is a conflict.”
Since then, Station B has successively launched some self-developed game products. In 2017, the self-developed card-type mobile game “Dream of the Gods” was launched; in 2018, independent games such as “Yinling”, “Yorrijuku” and “Unheard-Mystery Chasing Voice” landed on the Steam platform; New game product launch conferences will be held consecutively in 2019 and 2020. But without exception, the contribution of these games to the financial report is minimal.
For any content platform, self-research itself is a huge challenge. It requires a lot of financial and manpower, and it also has a low success rate. An intuitive example is Bytedance for 3 years. The layout, a team of 2,000 people, and a huge investment, still did not produce explosives.
Tan Yanfeng, former vice president of Shanda Games, said in an interview: “The barriers to competition in the game industry have become very high. Small and medium-sized teams will find it difficult to bear. Without strong capital support, it will be difficult to keep up with the fierce industry. Rhythm of competition.”
For station B, it is not easy to independently develop explosive games. Especially in the dichotomous market of Tencent and Netease, with the rising upstarts of games, the games at Station B are obviously facing greater challenges.
However, as Chen Yuetian said in the live broadcast, Station B is not an offensive company. Its basic idea is to defend first, “be invincible first and then win”.
Reference material:
“How will station B make money in the future?” “, Flipping the book randomly
“Flying Station B: A Rising Investment Giant”, all-weather technology
“Who “murdered” the station B game? “, Science and Technology New Knowledge
“Station B, a hidden game company”, BT Finance
“B Station Heartbeat, Tencent Tension”, Juchao Business Review
“B station investment heart, content channels must be grasped with both hands, can both hands be “hard”? “, Zhai Cauliflower Column