Mobile game channel cooperation model ushered in innovation, "joint operation + delivery" became the new standard

The game market has never stopped debating whether "product is king" or " traffic is king". Although there has never been a clear answer, if we observe carefully, we will find that the user aggregation effect of fist products such as " Honor of Kings " and " Onmyoji " is obvious, and the product has a stronger voice; for non-fist products, their dependence on traffic is very large, and the amount of revenue is largely determined by the amount of traffic. Looking at the product lines in the domestic game market, we can see that the vast majority are "traffic-driven" products. Therefore, it is more appropriate to describe the current domestic game market as "traffic is king".

The topic we are going to talk about today is the issue of “traffic gameplay” in the domestic game market. According to Mobile Game Matters , several channels represented by Hardcore Alliance have publicly proposed a " joint operation + placement" cooperation model. That is to say, in addition to traditional joint operations, advertising placement within the channel is also required to achieve more efficient cooperation. Although the "joint operation + distribution" cooperation model appeared more than a year ago, the "joint operation + distribution" model at that time was a model played secretly by some publishers and some channels, while the "joint operation + distribution" model now is an open and transparent model, and all publishers and CPs can participate.

Xiaomi, Hardcore Alliance, App Store and other first-tier channels have publicly announced their "joint operation + delivery" cooperation model, which can be regarded as the latest "standard" for this model!

1. Increasingly rigorous algorithms + superimposed benefits = "joint operation + delivery" model

To put it simply, "joint operation + placement" means that the publisher will place advertisements in channel resource positions based on the joint operation cooperation with the channel .

During the joint operation process, the revenue sharing between distributors and channels is still 5:5. In the past, channel resources mostly relied on operational recommendations. Therefore, some manufacturers would improve the performance of their products in the channels by brushing rankings and self-charging in order to obtain more resources from the channels. Some manufacturers would also obtain certain recommendation resources through business methods. But now this approach may no longer be applicable in the medium and long term, or it will have little effect. As the resource recommendation grading algorithms and anti-cheating measures of the channels become more mature and rigorous, more games are achieving better data performance through buying traffic to improve the level of resource acquisition.

Let’s look at a real example:

The monthly turnover of a certain game in a certain mobile phone manufacturer's game center is 2 million, and the manufacturer obtains the corresponding A-level resources of the channel; but the manufacturer wants to obtain S-level resource recommendations from the game center, so it puts advertisements on platforms outside the game center of the channel ( app stores , theme stores, browsers , and other manufacturers' APPs), invests 1 million in advertising budget every month and generates 1.5 million in turnover. At the same time, due to the bonus of advertising, the product's turnover in this channel reached the S-level product standard, so the recommended resources in the game center were upgraded to S-level, and the turnover increased by another 1.5 million. Through the "joint operation + delivery" model, a single-channel product with a monthly turnover of 2 million was upgraded to a monthly turnover of 5 million. The income taken by the channel is 500/2+100=3.5 million, and the income received by the manufacturer is 500/2-100=1.5 million. In other words, the manufacturer ultimately gets 30% of the total turnover. If the manufacturer does not place advertisements and still takes a 50% share, its revenue will only be 1 million. (Note: The above algorithm does not include channel fees)

Simply looking at the first month's figures, it seems that the product's investment recovery rate is only 75%, but from a longer-term perspective, the overall turnover scale has increased and the absolute value of product revenue has also increased.

Of course, the "joint operation + placement" cooperation model mostly occurs on Class A (or below) or long-life cycle products. For such products, the behavior of "buying volume" will greatly increase the data performance of the overall market, thereby obtaining more channel resources. The data performance of S-level products themselves is quite impressive, so they will be more favored by channels and will be given more resources. In addition, the products themselves also have certain functions of spontaneous dissemination and attracting traffic, so their voice will be stronger.

2. History always repeats itself. The mobile game market never stops changing.

1.2015: The era of "zero unique payment" products officially arrives

In the second half of 2013, a B-level card game could get 2-3 million yuan in unique commissions;
In the first half of 2014, the AR PG game concept was very popular, and the actual agency fee of an A-level product could reach 6-8 million;
In the second half of 2014, the " Matthew effect " in the game agency market was obvious. Many publishers were vying for the 15 million yuan agency fee for A+ or S-level games, but the agency fee for B+-level games was quickly reduced to 500,000-2 million yuan.
Since 2015, due to the overcapacity of game products, there has been an oversupply of Class B products, and as a result, the market trend has been "zero unique deposit and less advance payment".

This was a huge matter for CP at the time. Without exclusive funds, it meant that CP could not recover the R&D costs first. At the same time, it had to be bundled with the distributor of the product and share the profits based on monthly turnover. Moreover, the long repayment period greatly compressed the survival space of CP. Therefore, many CPs initially rejected this "new model", but more and more publishers began to negotiate based on this standard, and "zero unique payment" has become the general trend.

Although CPs are very unhappy about it, this type of agency model began to appear on a large scale in the second half of 2015, and now even the existence of exclusive agency fees has completely disappeared.

2.2016: Starting from 2:8 split, CP profit continued to decline

After the cancellation of the exclusive deposit, CP needs to share the risks and final results of the product with the publisher. But in early 2016, the agency cooperation model added a new rule of "low commission ratio" on the basis of zero commission and low advance payment. In the past, the profit sharing ratio between CP and distributor was 3:7, and that between distributor and channel was 5:5, which means that distributor could get 20%. However, due to intensified market competition and rising marketing and promotion costs, publishers' profits have dropped significantly. Therefore, in early 2016, many publishers began to propose an 8:2 profit-sharing model, and some even began to adopt a 15:85 profit-sharing ratio. After the turnover reaches a certain level, the CP's profit-sharing ratio will continue to decline.

However, faced with fierce market competition and a "gamble" mentality, many small and medium-sized CPs still acquiesce in the existence of this profit-sharing model.

3.2017: Joint transport + delivery, seemingly uneven distribution but an inevitable trend

In addition to the rising costs of buying traffic and the decline in traffic quality this year, publishers will also face a new round of pressure from channels, because "joint operation + delivery" will be put on the table for some work.

This model existed to some extent in the past. In order to gain a more stable relationship with the channels and increase the sales of their own products, some manufacturers would adopt this form of cooperation in secret. In the past, the channels would only use part of their resources to carry out this operation. But now, channels have begun to openly sell resource positions and hold channel promotion conferences one after another. The practice of joint operation + delivery has become more and more common and has even become a new standard.

To play with channels, in addition to the joint operation profit sharing, you also have to place advertisements. It is equivalent to entering the venue, paying once to buy a ticket, and paying again to play the game. It seems that the publisher's profits have been squeezed once again, but if the game is played well, the plate can be made, and the final income may not necessarily be less.

3. Go with the flow, even if it feels “unfair” every time

Judging from the development of the mobile game industry in the past, whether it is zero unique commission or the 28% profit sharing model, all these seemingly unfair and unreasonable treatments will eventually become a new standard or mainstream with the changes in the market and the increase in the number of manufacturers entering the market, and the interests of all parties will be able to find a balance with each other.

The same is true for today's "joint operation + delivery". It seems that the channels are forcing publishers to place products on the channels to achieve more profit income through "mandatory" policies, but perhaps it is not a bad thing for many manufacturers who go with the flow. According to Mobile Game Matters, many medium and large game publishers have acquiesced to this model. On the one hand, the "joint operation purchase volume" model can increase product turnover and increase revenue, and obtain higher-level recommendation resources by increasing turnover. On the other hand, it can also use this reform to make limited resources more inclined and flow to high-quality content, avoiding the "steady and long-term" good products from being "buried" in the early stage due to insufficient business support or allocated resources, thereby intensifying competition and accelerating positive reshuffle.

The transformation from non-mainstream to mainstream is just a process from quantitative change to qualitative change.