Taking League of Legends as an example: How does Tencent Games operate?

Tencent Games is one of Tencent's four major online platforms and has currently won the title of the largest online game community in China. Tencent Games adopts a combination of internal independent research and development and diversified external cooperation, deeply rooted in multiple market segments of online games and gradually forming a professional layout. The world of online gaming has been turbulent over the years. Why have Tencent games remained popular throughout the history? How does it operate in the big picture to wash away the stigma of online games, and how does it operate in the small details to achieve victory in each niche gaming field?

Q1 2016 financial report: Tencent's total revenue was RMB 31.995 billion, and its value-added service revenue increased by 34% year-on-year to RMB 24.964 billion. Among them, online game revenue increased by 28% year-on-year to RMB 17.085 billion, accounting for more than half of Tencent’s total revenue.

Through the above data, Tencent's value-added services are the most core module in Tencent's entire revenue system, with the largest share and the highest annual growth rate. The revenue from online games among value-added services supported the blue sky of Tencent’s financial report.

1. The process of destigmatizing games

As a once "dark" industry, online games have been criticized and the industry is in a mess. However, in December 2010, Tencent Games officially launched its integrated brand at the TGC (Tencent Games Carnival) held at the Shanghai New International Exhibition Center, and has since entered the "brand era".

2. Positioning and division of labor of Tencent game planning team

1) User positioning

The ultimate value in the online gaming industry will return to the customers. The target of all economic activities in the industry is the game players. The players are where the interests lie and are the source of value for the entire industry chain . Therefore , creating customers means creating differences. Only by segmenting the market, locking in the user groups, and possessing differences can you have a market.

Based on its existing large QQ and WeChat user base, Tencent Games defines its target consumers as people aged 11-25, with students being the main users.

2) Tencent Interactive Entertainment Marketing Planning Team

Creative support: serving users and attracting their attention

At the operational level, this department is responsible for user-centered design, and its main purpose is to persuade and guide users to repeatedly experience the product and make effective and reasonable consumption .

Data analysis : Provide scientific support for the budget scale of product marketing resources

The department is based on three aspects of data:

1. Tencent Games’ internal data (market performance, user habits, operations)
2. Platform data (such as user jump data between various platforms and games)
3. Industry data (other companies and industry data)

The data obtained can provide the marketing department with a basis for pre-decision-making, in-process optimization, and post-evaluation , and provide assistance in click conversion and user download conversion .

User research : understanding user psychology and implementing it into business guidance

The department is more focused on details, such as:

It is suggested to "focus brand promotion in the direction of 'micro-country wars'": for players, wars between large countries are not as important as the formation of a small group or family, which are what impress players.

3. Tencent Game Operations

In terms of user participation, payment features, virtual economy, product changes and development space, etc., online game products are unique among many products. Under the premise of low trial cost , it emphasizes continuous experience service . Game products are spiritual and cultural products. They provide experience services to meet consumers' high-level psychological and cultural needs. They belong to the highest level of self-realization in Maslow's hierarchy of needs theory. The online game experience involves interaction between users. The market success or failure of online games does not depend on the product itself to a large extent:

The unique nature of online game products determines that they must be operated to give them a market soul.

1. During the project development and internal closed testing phase, operations work mainly involves assistance and strategy research.
2. During the small-scale internal operation phase, the operation work mainly assists in product improvement and preparation of operation resources.
3. During the public beta stage, product operations will lead the entire product launch, focusing on product promotion and new user retention.
4. In the commercial operation stage, the focus of product operation is to increase product online and product revenue.

Operation means maintenance, which keeps the product running smoothly; management means management, which actively tries to create and increase profits. The daily product operation work and operation nature and operation basis are as follows:

4. Classic case of project operation: League of Legends

Project management believes that a project is a combination of resources mobilized together within a certain period of time to achieve a specific goal, and is a series of related activities carried out to achieve specific results. These include:

1. Version development planning, release, and update projects

2. Online Activities

3. Promotion projects:

• Online promotion projects
• Marketing Projects
• Channel promotion project
• Ground promotion project
• Joint promotion projects

4. Business cooperation projects

5. Market research project

6. Other Projects

Due to the inherent attributes of online games, the number of online activities for version iterations during operations and promotions is more frequent. However, online and offline must be combined, and Internet cafes, celebrity endorsements, business cooperation (such as electronic products, etc.) are also indispensable. We can get a glimpse of the principle from the phenomenal example of League of Legends.

DOTA can be regarded as the predecessor of League of Legends, so when League of Legends was launched, it was generally not favored and was boycotted by a considerable number of DOTA players in China. In view of the low performance of the game in the domestic market in the early stage, in addition to ground promotion, channel promotion, and cooperation with Internet cafes , the game was promoted online through media exposure of WCG. In the early stage of promotion, the main focus was on attracting players by focusing on the similarities with another game DOTA.

However, in the mid-term promotion and consolidation, the two were immediately separated. One month before the public beta of League of Legends in September 2011, an online promotion advertisement titled "Why should League of Legends be the same as DOTA" was launched on video platforms such as Youku. By comparing the differences between League of Legends and DOTA, the advantages of League of Legends were magnified.

On this basis, the game was elevated to the cultural field, and the "撸文化" was born. The consumer group was attracted by cultural influence, and the optimization of the game itself attracted the audience by adding the newly added Chinese-style hero "Sun Wukong" , which triggered a peak in the growth of the number of game players. Add more competitions and live broadcasts to attract viewers.

In addition to consolidating old players in mid- and late-stage publicity, the company also promoted an excellent and clean gaming environment: In 2011, in response to the problem of plug-ins, the official website announced a "10,000 yuan reward for League of Legends plug-ins," which was later changed to a "50,000 QB reward for League of Legends plug-ins."

In the later promotion, the influence of the game in different fields was further expanded through business cooperation projects such as celebrity endorsements and brand cooperation:

The actor who plays Zeng Xiaoxian, Chen He, endorses

In 2013, Tencent signed a contract with China Merchants Bank to launch the League of Legends CMB Credit Card, setting a record for the highest number of applications in a single day in the history of CMB:

The unique characteristics of online games emphasize the importance of operational work. In specific game projects such as League of Legends, adapt to local conditions: On March 22, 2011, DOTA commentator Xiaodong said in an episode of League of Legends that LoL might as well be called LuALu. With the help of Diaosi culture, the name "LuALu" quickly spread among League of Legends players and has been used to this day, and has developed into Lu culture. By making full use of various channels and resources and combining multiple operation projects, we finally achieved remarkable achievements in the history of the gaming industry in mainland China.