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GameLook report/ In the past two years, as the total number of editions, boutique games, and purchase marketing have increasingly affected the domestic game market, “content is king” has become the consensus of the game industry and even players, and the mobile terminal revenue has exceeded 1 billion in the first half of the year. The U.S. dollar “Original God” has become a celebrity case where high-quality content has been rewarded.
In this context, the Chinese Android store still adopts the world’s highest 5:5 rake, which has triggered enthusiastic discussions among players and the media about the “Chinese-style share”. However, compared with the domestic Android store’s insistence on not adjusting the share ratio, The global market is another piece of scenery.
The two major application stores, Apple’s App Store and Google Play, dominate the overseas market. Since their inception, they have adopted a 30% platform commission. In November last year and March this year, the two giants Apple and Google have successively made Since this year, only 15% of developers with annual income of less than US$1 million will be levied, which has responded to overseas developers’ complaints about the excessively high platform levy.
When foreign game companies’ 3:7 ratio was too noisy, and even brought Apple and Google to court, China’s game industry has always been in the most severe development environment, even if it is tilted towards developers and adjusted the ratio. It is a globally consistent trend. Domestic Android stores are still immobile. Faced with the cruel reality, Chinese game companies no longer have expectations of channels and leave collectively.
What are the channels waiting for? Boutique games have broken through the channel “blocking”
Domestic channels are unwilling to give up the abnormal returns brought about by relying on monopoly status, and game manufacturers will naturally choose to vote with their feet.
In September 2020, “Yuan Shen” launched a global simultaneous public beta, and used practical actions to refuse to list traditional Android channels. In addition to the official website, only B stations that have mutual knowledge and encounters and TapTap, which pursues zero commission, are listed. At the same time, Lilith’s SLG product “Awakening of Nations” and “Yuan Shen” are in step, replacing the user acquisition role of traditional stores with purchases.
The mobile game “The Strongest Snail”, which was released earlier in the summer of last year, also focused on buying volume and gave up access to Android channels.
Significantly, the stores did not wait for the results of the crash after these games went online. On the contrary, the “consequences” of these games saying no to the channel seemed to be minimal, even further stimulating more game companies to bypass the store.
Among them, “The Strongest Snail” has been online for more than half a month, with a turnover of more than 100 million, and “The Awakening of Nations” has a turnover of more than 300 million. “Yuan Shen” is the most typical. According to Sensor Tower’s statistics, since its launch, “Yuan Shen” has attracted more than 1 billion U.S. dollars in mobile only within half a year, which is equivalent to about 6.6 billion yuan. It has become the most successful mobile game worldwide in the past year. And was selected as the global mobile game of the year by Apple and Google.
Taking into account that Mihayou CEO Cai Haoyu has revealed that the company’s revenue in 2020 will exceed 5 billion yuan, according to the current courageous momentum of “Original God”, Mihayou is expected to impact tens of billions of net profits this year. Even with the lowest price-earnings ratio of 20 times in game stocks, Mihayou, which does not rely on domestic channels, is already a potential leader in the game industry with a valuation of 200 billion.
But the funny thing is that last year, domestic Android strongly rejected Miha’s request to adjust the share ratio and excluded China’s best game companies and the world’s best mobile game products. This is a directional error in the development of platform companies’ values. Various signs indicate that the age of content is king is coming, and channel hegemony will inevitably decline.
Perhaps it was because this mistake was too big, and some channels have recovered and re-thrown the olive branch.
In October 2020, “The Strongest Snail”, which has been released for 4 months, suddenly announced the “full platform open beta”, and the channel shook hands with celadon. In February of this year, under the urging of big boss Lei Jun, “Yuan Shen” was put on the Xiaomi App Store and accepted a 3:7 ratio.
Although the channel made limited concessions to celebrity games afterwards, the posture was still too twitchy, and it was even more reluctant to adopt the new policy to benefit Chinese game makers and gradually evolve into those who have good games and which company has a brand to be eligible. Unspoken rules for negotiating with channels.
In the era of high-quality goods, capable manufacturers can naturally sit down and negotiate terms with channels, forcing the channels to “bow their heads”, such as NetEase’s “Fantasy Westward Journey” mobile game in the early years, some of Tencent’s boutique games, and global explosions such as “Yuan Shen”. paragraph.
But with global platforms like Apple and Google adopting self-service listings, open and transparent business terms, and sharing ratios that are consistent for everyone, Chinese channels have started a “historical reversal” and turned back to people-led ” “Black box negotiation model”, whether it is for a new game or renewing a contract, what price does the game company have to pay? At the same time, huge benefits provide a new breeding ground for job corruption.
While large companies can talk about the share ratio, small and medium-sized companies passively accept the artificial difference in the share ratio, which will evolve into a paradox pattern where the strong will always be strong and the weak will always be weak, creating new unfairness in the industry and detrimental to the sustainable development of the entire industry.
The Chinese Android store outside the world
Although it is difficult to replicate as a case, it is still a landmark event that “Yuan Shen” jumped out of channels and domestic channels are willing to adjust the ratio for “Yuan Shen”. Game companies and bigwigs that were silent have rarely expressed their support. Companies in the industry challenge the long-established share ratio.
In February of this year, at the financial report conference, Netease CEO Ding Lei bluntly pointed out that “China’s Android channel is divided into the world’s most expensive.” Ding Lei believes that the domestic game market share ratio is unhealthy and unreasonable, and is not conducive to the ecological health of the industry. He further appealed: “The Android market can be in line with international standards in game sharing, and hopes that the entire industry can jointly develop a healthy ecosystem. “
After companies in the industry challenged the share ratio with actual actions, many non-gaming media and netizens have also realized the abnormality of China’s share ratio in domestic channels. But to the surprise of netizens, Chinese mobile phone stores adopt two completely different sets of policies at home and abroad. In short, “overseas preferential treatment, China is harsh”, which makes developers in China dumbfounded.
In March last year, Huawei’s app store AppGallery launched preferential policies in overseas markets. Developers will receive 85% of the share in the first and second years. And other Chinese mobile phone manufacturers overseas are also in line with the 3:7 ratio of App Store and Google Play. The reason for adopting an inconsistent share ratio between inside and outside is nothing more than foreign “travels”. The dominance of overseas Google Play and Apple App Store makes it necessary to adopt the same share ratio for catching up with Chinese app stores.
At the same time, for foreign developers who want to enter the Chinese market, why the Chinese market has to adopt such a division, overseas developers also do not understand it, and it is impossible to explain it only with “Chinese characteristics”.
Unfriendly sharing policies caused by platform monopoly, fragmented channels and models, and lower profit margins even made Supercell, one of the idols of the mobile game circle, retreat and directly gave up operating “Royal War” and “Wild Fight”. The idea of waiting for the Android version of the national service for many products is handed over to the domestic agent. The agent’s efforts have only made a lot of money, but the profit has disappeared.
What’s more serious is that in fact, 50% is not all that game manufacturers pay. Channels still need to collect an additional 5% of the channel fee. Game companies can only get 47.5%, and add invisible marketing investment. The Android market is so bad. The living environment of game companies is really hard to blame the game industry for the increasingly severe product shortage in recent years.
The change is just around the corner, but the market regulation mechanism has failed
In 2020, “The Original God” and “The Awakening of the Nations” are not the first “defection” channels, but they are the most typical in the opportunity of the boutique era. Their success has also inspired more and more products to choose to bypass channels.
For example, since the beginning of this year, NetEase’s “Game King: Duel Link”, “Four Leaf Clover Theater” from the Magic Moment Network, and Thunder’s “Happy Thoughts” have all chosen not to be listed on the shelves. The mobile game “Tianyu”, which NetEase chose to launch the channel, is also rumored to have negotiated the share ratio in advance.
Gigabit CEO Lu Hongyan believes that “the channel share ratio is a result of a multi-party game.” However, after a whole year of fierce game, although there are many cases of adopting the new share ratio, the industry as a whole has not loosened the original share ratio.
Although there are intersections between mobile phone manufacturers and game companies, mobile phone manufacturers should rely on their own hardware design, core technology, and user services to create value. Especially when the threshold of the game market is higher and the investment in game product R&D operations is doubled, it is extremely unreasonable for the game companies to bear all risks.
Stores certainly have their value. They are one of the ways for game products to reach users, but love for money is the way to get it. The current share ratio does not reflect the reasonable value of the current game market stores. The results of games such as “Awakening” are in sight, and advertising purchases and brand marketing have become mainstream, and the value of the store is obviously overestimated.
In GameLook’s view, the game industry has undergone fundamental changes in both China and the global market in the past three years. If the domestic channels have been ignoring this change, it can only prove that the market, the “invisible hand”, has failed to adjust.
Channels lack the motivation to change the share ratio. Does the industry have to pin its hopes on the true owner of the Android ecosystem: Is it possible for Google to return to the Chinese market and completely reshuffle the Chinese Android market? If this is the case, it will definitely be the sorrow of the Chinese science and technology community.
At the same time, in the long run, the current share damages not only the revenue of the manufacturers, but also the ecology of the game industry, and it is also contrary to the national policy of encouraging fine products and encouraging innovation.
At the 2020 China Game Industry Annual Conference, China’s propaganda leaders emphasized that as an important aspect of national cultural construction, the game industry “must enhance the awareness of innovation, improve originality, promote the emergence of new ideas, new styles, and new technologies, and build a strong, Original masterpieces with personality and glamour.”
At the same time, starting from 2020, the country has begun to pay attention to the monopoly problem in the Internet field, and anti-monopoly has also become the focus of attention in the science and technology circle, but the essence of this policy is also to encourage competition, protect innovation, and pay attention to the weaker parties in the platform ecology.
The emergence of popular products such as “Original God”, “Awakening of Nations”, and “The Strongest Snail” has brought a wake-up call to the entire game market. Content is king is no longer just a slogan, but a fact that cannot be ignored.
What we need to bear in mind is that game manufacturers make games for gamers, not for iOS, Android, and not for stores. Huang Yimeng, CEO of Xingdong who claimed to “remove all traditional channels”, also pointed out that “the essence of content is king is that users are king.”
Looking at the huge success of one game after another by jumping out of channels, this undoubtedly marks the arrival of a new mobile game distribution model. I hope that domestic stores will think twice and look forward to the day when channels and game companies can be frank with each other.
This Article is curated from Source and we only provide the English version of the Story.