Five bosses changed in six years: What is Shanda Games trying to do?

Shanda's changes basically occurred after 2008. In 2008, Tang Jun, Shanda's first heavyweight executive, resigned. Today, Zhang Xiangdong resigned. Within these six years, Shanda Games has lost five CEO or president-level figures, including Tang Jun, Li Yu, Tan Qunzhao, Ling Hai, and Zhang Xiangdong. The vice presidents who resigned during this period are not discussed here, because I am mainly discussing people who can lead business groups or game businesses independently.

Between 2000 and 2008, online gaming was a business model that relied on pay-by-the-hour payment as its main mode of business. Revenue growth was mainly driven by increasing users and reducing costs. During this period, the vast majority of online gaming companies were developing at a rapid pace. The difference between them lay in the speed of expansion, and the market saturation line was still far from satisfying the survival line of all companies.

The billing era was Shanda’s best time. During this period, various problems may have occurred, but they were all covered up by the rapid growth. Reform and change usually only occur when growth encounters huge difficulties and survival is at stake. Obviously, Shanda is still far from this.

At that time, Shanda was still an online game company, or it looked like an online game company, but in fact, Shanda was an excellent capital consortium, which had adjusted its future development direction to a group spanning the entertainment industry several years ago. The game business was only one of the sources of cash flow, not its foundation. With this idea in mind, at the right moment, the following things could easily happen.

First, when the time is right, Shanda will definitely expand its business lines to the entire entertainment field, and even transform Shanda into an Internet company. Second, when the performance of online games cannot meet its requirements, the group will immediately adjust it. The group's patience for games is very low, which leads to the board's patience for professional managers being very low.

Both of the above happened. This is the nature of the consortium organization and is reflected in all consortiums. This can be seen in Shanda's subsequent attempt to acquire Sina and Innovation Institute, as well as the frequent replacement of professional managers in recent years.

In 2008, Tencent released the two games "DNF" and "CF". Needless to say, it immediately pulled Shanda down from the first place. Although virtual value-added services became the main revenue source of games in 2005, the era of free games did not truly arrive until 2008. During this period, Shanda's inability to adapt quickly appeared, but at that time almost no one realized it.

In 2008, Tang Jun resigned

This was a survey conducted by Sina in 2008. At that time, most people were still optimistic about Shanda's model, but the board of directors might have already sensed the problems Shanda was currently facing. I personally speculate that the conflict between professional managers and the board of directors broke out due to the stagnation of rapid growth, but the consortium has always had poor patience.

At that time, Shanda did not have any online promotion resources compared to its competitors, NetEase, Tencent, and even Sohu. This was a fatal shortcoming. Unfortunately, Shanda today still has not made up for this fatal shortcoming. If the acquisition of Sina is successful, coupled with the subsequent emergence of Weibo, although Shanda today is definitely still inferior to Tencent, it is still very likely to firmly suppress NetEase.

In 2010, Li Yu resigned

In the first quarter of 2010, NetEase Games surpassed Shanda for the first time. The consequence of this change of ownership was the resignation of Li Yu, the then CEO of Shanda Games.

At the end of 2011, Shanda Games President Ling Hai resigned and announced his resignation in early 2012.

In Q3 of 2011, Shanda's revenue was still growing, but the speed was much slower than the market. On the other hand, its net profit began to decline sharply. It is speculated that the reason is that in the face of high KPIs, professional managers will increase marketing and operating expenses to expand the user base and increase revenue. The increase in marketing expenses also increases costs, which ultimately leads to a sharp decline in operating profits.

Ling Hai, as the president of Shanda Games, also serves as the chairman of Actoz. Actoz should be the developer of "Legend". This product is still the main source of Shanda's revenue today. On the other hand, due to the previous copyright disputes, Shanda, which is well versed in capital operations, must know how to avoid and control such things in the future. After Ling Hai became the chairman of Actoz, such copyright disputes have basically not occurred.

In Q4 of 2011, Ling Hai was transferred back to the group to be in charge of investment business and was no longer responsible for the game business. He left the company in 2012. Judging from the changes in his position during this period, he had been neglected by the board of directors.

Tan Qunzhao resigned in Q3 2012

In Q4 of 2012, Shanda's position changed once. Sohu Changyou's revenue surpassed Shanda for the first time, and Shanda fell from third to fourth.

Obviously, the board of directors once again lost confidence in professional managers. Although he was a veteran and seemed to be the most suitable person at the time, Tan Qunzhao still resigned.

In Q3 2014, Zhang Xiangdong was fired

The financial report has not come out yet, but from the current perspective, Shanda’s position should have changed or a turning point has occurred in the development trend of a certain business. We will have a detailed discussion in the fourth quarter.

Considering the executives who have left other business lines before, we can basically see Shanda’s judgment on its current business.

1. Shanda’s rescue measures are more focused on capital and legal rescue rather than specific reforms of business lines to achieve healthy growth. In other words, any turning point in the data will lead to the CEO being fired.

2. The judgments and decisions of the decision-making level are based on strict KPI assessments, rather than flexible assessments like other means to tap into their deep potential.

Refer to the two current heads

Qiu Wenyou: Current President of Shanda

He has a strong background in capital and finance and has the ability to manage the overall situation of the Internet, but he is not from the Internet industry.

Zhang Yingfeng: Current CEO of Shanda

Senior legal professionals, very good at policy understanding, but not from the Internet industry

From this point of view, Shanda Games' current transformation of the entire group is still using a set of capital + legal operations. Under this idea, it is not very important whether or not there is a game background or even an Internet background, because Shanda prefers to make adjustments in strategy rather than details.

However, given the current situation where game companies cannot survive without Internet resources, this approach is unlikely to work. Unless the industry model undergoes a major change, the tenure of these two will not last long.

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.