As the entrance to 1 billion traffic, will mini-program games be the key?

Summarizing 2018, which is already halfway through, “wasting life” is the real necessity.

The successive performances of answering questions, raising frogs, and browsing Douyin all demonstrate a new perception: your users are much more idle than you think. The real situation is that some people can take out 4 mobile phones to answer questions on different apps all day, open the Yangwa app 100 times a day, and even force Douyin officials to formulate a time lock to prevent addiction.

No one emphasizes fragmented stories anymore. The big logic is to integrate scenarios to kill time, that is, to increase user usage time by extending scenarios. So Momo started live streaming, live streaming platforms also wanted to do social networking, Toutiao started long videos, iQiyi started short videos, food delivery companies started taxi-hailing, taxi-hailing companies started food delivery, and shared bicycles were also brought into the game.

As a result, playing mini-games on WeChat has become a serious matter.

This serious matter is producing a different chemical reaction under WeChat's 1 billion social traffic.

In this new trend, 36Kr will discuss the following three questions:

1. What new social gameplay will mini program games have?
2. In addition to advertising and virtual props payment, what other monetization paths will mini-program games have?
3. As a VC, what is the logic of investing in mini-program games?

Attack of the Game

Combining "games" with "social traffic" is not the first idea of ​​mini-program games.

2008 was the heyday of SNS, and also the era of the integration and collision of the "mini-game + social" model.

Among them, “Grab a Parking Space”, “Friends Trading” and “Happy Farm” of Kaixin.com are the most representative.

This type of game has the characteristics of "relationship transmission" and "friend interaction", and generates a large amount of social content between users through online messages, instant messaging within the site and e-mail.

Similarly, mini-program games have similar characteristics and have greater room for imagination.

With the extreme restraint of the WeChat team, the WeChat mini-program game, which only opened the functions of sharing among friends and ranking, gave birth to Jump Jump with tens of millions of daily active users and Pirates Coming with millions of daily active users.

Once the WeChat team opens up the interface and gradually releases the potential of mini-program games, the gameplay, model, profit margin, and ecology of mini-program games will usher in further growth.

So based on WeChat's social traffic, how can mini-program games also play social roles?

36Kr believes that the gameplay of mini-program games will change in the following three dimensions:

1. Expanding from light games to medium games: Due to the WeChat team's restrictions on the memory occupied by installation packages and Java loading (installation packages within 4MB, cache RAM must not exceed 50MB), the current small games are mainly casual. In the future, when WeChat gradually releases the memory of the package, medium games with more diverse gameplay and better experience will inevitably appear.
2. From individual confrontation to group confrontation: Each WeChat group can be regarded as a natural "guild" organization. WeChat mini-program games may organize confrontations between groups, offline communication activities, and provide group members with welfare props, etc.
3. Completing the social closed loop between strangers: After strangers establish connections and break the ice through mini-program games, this social relationship can be transformed from strangers to acquaintances directly within WeChat, eliminating the need for users to migrate their relationship chains from other mini-game platforms to WeChat. Similarly, we believe that the stranger dating mini-programs in the WeChat ecosystem are more imaginative than stranger dating apps in independent ecosystems.

Commercial opportunities of mini programs

In addition to advertising and virtual props payment, what new profit points will mini-program games have?

The biggest difference between mini-program games and traditional mobile games is that mini-program games can connect the WeChat account system, social relationship chain and WeChat payment system, thus forming a complete monetization closed loop.

36Kr believes that the integration with offline business scenarios and traffic distribution based on social relationship chains will be new profit points.

Integration of offline scenarios:

When you are waiting for a table in a restaurant, users can scan the code to enter the mini program game and get corresponding discounts, thus completing the offline traffic import online; similarly, by using the points in the mini program game, you can get discounts from designated merchants, thereby directing traffic to the merchants, thus completing the conversion of online traffic to offline traffic.

Traffic distribution:

According to relevant sources, the WeChat team is likely to open the "Mini Game Jump to Mini Program" function between June and July this year, that is, users can jump directly from "Jump to Jump" to the "Pinduoduo" mini program, shortening the user's access path and improving the conversion rate. Furthermore, mini program games with large traffic will be able to bring volume to tool and e-commerce mini programs.

In general, unlike the logic of the traditional game ecosystem that strongly relies on paying users, in the ecosystem of mini-program games, as long as you grasp the traffic and scenarios, you can firmly grasp the B-side resources for monetization. Games are no longer the end of traffic, but the starting point of traffic.

***, let me briefly introduce the latest progress of mini program games in advertising and props payment:

Advertising business:

In addition to imitating "Jump Jump" to do brand implantation in the early days, as a game CP, the easiest advertising method to operate is: directly setting up advertising space + combining viewing ads with game incentive mechanisms.

Currently, the threshold for mini-program games to open up advertising monetization is that the DAU reaches more than 500,000, and it must go through Tencent’s Guangdiantong platform. The revenue sharing ratio between game developers and Tencent is 5:5.

Props payment:

Games based on acquaintances are more likely to "detonate" confrontations between users, resulting in stronger stickiness and payment conversion rates. In terms of revenue sharing, WeChat takes 40% and the developer takes 60%, and the game is only open to corporate users.

Currently, props payment is only supported on the Android platform. If the iOS system is released in the future, not only will users be further locked in the WeChat ecosystem, but it will also be a big bonus for game developers. According to data, small games such as "Happy Landlord" and "National Smash" have achieved monthly revenues of tens of millions of yuan by relying solely on in-app payments on the Android side.

New investment trends

For game developers, WeChat, with 1 billion users, is undoubtedly the best ticket to successful entrepreneurs. For investors, mini-program games are an outlet that cannot be missed.

So what are the investment highlights of mini-program games in the eyes of investors? What kind of teams are most likely to be favored by investors?

Investment Highlights

1. Low customer acquisition cost: Mini games have always existed, but the tight traffic and high costs make their financial model no longer reasonable. However, mini program games can promote friendships and easily generate fission. Through certain operating methods and advertising delivery methods, low-cost customer acquisition can be achieved.
2. High user retention: At the 2018 WeChat Open Class Pro, Sun Chunguang, the product director of WeChat Games, shared the latest data of mini-games. The user retention rate of Jump Jump reached 65% on the second day, 60% on the third day, and 52% on the seventh day. A mini-game with the theme of Candy Crush that 36Kr recently learned about had a second-day retention rate of 56%, a third-day retention rate of 50%, and a seventh-day retention rate of 38%. Compared with the general retention rate of around 20% for H5 games, mini-program games have already demonstrated their terrifying power.
3. High gross profit margin: Compared with traditional games, mini-program games have low development costs, and once they become popular, their investment in production is relatively high.

What kind of team

Investing in a project means investing in a team. This principle also applies to mini-program games.

Since mini-program games are a decentralized portal, the business of building a platform and distributing traffic is not obvious. Therefore, the only target left for capital is game CP.

When it comes to game CPs, whether it is an early or late-stage project, the investment logic and evaluation criteria of investors are: whether the team has made a hit product and whether it has the ability to continuously produce hit products. The rest is the question of price.

The Golden Age of Game Developers

The value of the Internet lies in connection. The three dimensions that all products need to build are "connection - efficiency of connection - depth of connection", namely traffic - traffic dimension - traffic loyalty.

The integrity of the WeChat ecosystem has solved the connection problem for small games; and independent developers can finally collect accurate and clear user portraits in the background, and be on standby at any time to update the games for these precise users.

From the perspective of traffic acquisition, this is a lower threshold for gaming than any other era. Even though we know that the life cycle is limited, the attention that games grab has already surpassed all content forms. Just like the core of Pinduoduo's success lies not only in low prices, but also in the sharing of social relationships.

The same goes for mini-games. On the WeChat ecosystem, the golden age for game developers has arrived.

Note: Planet Daily senior editor Luo Binmeng also contributed to this article.