The winter of mobile games is only for speculators

The Chinese mobile game industry, which has been booming since 2013, has lost the joy of waking up from a dream and seems to have encountered a minor setback.

First, Qihoo 360, the leader in domestic Android distribution, disclosed in its second-quarter financial report that the revenue from value-added services related to its gaming business grew at a slower rate than the previous quarter, slowing to 17.2%. It should be noted that its revenue from this item grew by 58.2% in the first quarter. Then, another giant, Tencent, revealed that its revenue in the third and fourth quarters will remain at the same level as in the second quarter. This is the first time that the two major mobile gaming channel giants have experienced a slowdown or even stagnation in growth. At the product level, many people have the same perception - the last phenomenal product was "Dota Legend" launched half a year ago. The industry and players have not been excited about a new game for a long time.

Does this mean that winter has come? Xiao Haozi believes that it has not reached that point yet. Using the concept of the financial industry, "winter" refers to the market depression caused by the bursting of bubbles and shrinking consumption. However, the mobile game industry has not seen a corresponding bad situation.

Let's take a look at how this wave of mobile game craze, which began in 2013, was formed. An overlooked fact is that China's smartphone market has experienced rapid growth since 2011, reaching its peak in 2013. In that year, the Chinese market consumed 350 million smartphones, and according to Nielsen data, in 2013, the penetration rate of smartphones in China also reached 71% - while the United States was only 60%. Such a favorable environment is the most important background for the explosion of mobile games.

Tencent's timely entry in mid-2013 was the most important catalyst for this wave of enthusiasm. Before that, Kakao Talk, which Tencent invested in, dominated the Korean market with the model of "social network + mobile game". After sorting out and integrating internal R&D, channels, operations and other resources, Tencent launched a mobile game platform in August 2013. Through strong social relationships, Tencent acquired a large number of users in a short period of time. According to industry sources, starting from the first quarter of 2014, Tencent occupied half of the Chinese mobile game market. In this process, Tencent itself has become the best "mobile game" advertisement, stimulating a large number of CPs and giants to join. Among them, Alibaba has established Ali Games, which will shoulder the heavy responsibility of opening up new territory for Ali in mobile games with UC's Jiuyou. NetEase has produced works such as "Main Attack Mo Pan" and "Shadow Blade". It is rumored that NetEase has nearly 100 mobile games in its hands.

The combined force of a strong demographic dividend and the entry of gaming giants has detonated this wave of mobile gaming since 2013. This time point is what Lei Jun calls the "trend of opportunity". The rapid development of mobile gaming during this period can be described as wild growth. Based on the strong expansion of the market, a large number of investment institutions, CPs, and publishers have intervened in the market, trying to grab the best position in this time window. While these newcomers have brought great prosperity to mobile gaming, they have also fattened up the deformed market and created chaos that cannot be ignored.

Well-known Japanese IPs such as "One Piece" and "Naruto" have been illegally plagiarized in China, hundreds of similar works have appeared in popular genres such as COC, and the practices of swiping and buying charts have almost become a common practice for small and medium-sized CPs... This is a heyday for mobile game speculators, but it may not be the "golden age" for major game companies such as Tencent, NetEase, Changyou, and Perfect World - the former can ignore the life and death of the industry and can turn around and leave after making enough money, but the "mess" left behind will be cleaned up by the latter.

The so-called "winter" is the consequence of speculators' extensive expansion based on market dividends. As smartphone users approach saturation, the works produced by speculators who do not have the strength themselves can hardly "feed" users who are increasingly concerned about quality. "Game Grape" once published an article saying, "On the App Store bestseller list in China, there are fewer and fewer new faces in the top positions...Tencent products account for 12 of the top 20 games on the App Store bestseller list, and the rest are either new products from other major terminal game manufacturers or familiar faces. It was not until around the 30th place that I saw a slightly unfamiliar game." Obviously, the market is rewarding those large manufacturers who really make products, and the speculators who used to win by luck are becoming fewer and fewer.

In terms of revenue, the entire industry is indeed paying the price for its previous extensive expansion, but rather than viewing it as a "winter", it is better to view it as a turning point - a turning point for the entire industry to grow not by relying on the demographic dividend but by relying on product innovation, and a turning point for the entire industry to abandon extensive expansion and enter a healthier and more stable growth phase. In the final analysis, it is a "winter" for speculators, not a "winter" for the industry.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.